Explosive Options is an alert service and chat room began by Bob Lang over ten years in the past.
Bob Lang is a directional choices dealer.
The providers consist of 4 subscription plans:
- Directional Trading Plan
- Spread Trading Plan
- Trading Chat Room Plan
- Total Access Plan
A comparability of the plans might be discovered at ExplosiveOptions.net,
This plan is an alert service the place the buys and sells come through electronic mail. But you’ll be able to optionally choose right into a members-only Twitter feed.
As an instance, here’s a typical commerce from his Directional Options Portfolio:
If a inventory was buying and selling at $260, he would possibly purchase the $270 name with wherever from 45 days to three months until expiration.
The longer days until expiration will mitigate the impact of the option’s time decay,
The payoff diagram for one contract would seem like this with an uneven reward-to-risk profile.
Of course, it’s as much as you to determine what number of contracts to commerce primarily based in your portfolio measurement and your consolation degree.
In principle, this commerce has a vast reward.
However, the chance is proscribed.
The most loss within the commerce would be the quantity you paid for the choice.
As a great danger supervisor, Bob wouldn’t let an possibility go to max loss.
He would exit the commerce as quickly because the chart reveals that the worth is not going within the anticipated course.
We know as a result of proper after logging into my Explosive Options Dashboard and clicking on my “Directional Trading Welcome Kit,” I see the next:
Options Trading Rule #1: Practice Good Risk Management
Also, you’ll be able to inform by watching his Daily Bites video on YouTube, revealed on Mondays and Thursdays. He retains reminding merchants to be danger managers and to at all times preserve danger in thoughts, particularly when the VIX is very low and the market is weak to pullbacks.
He typically likes to purchase put safety when the worth of places continues to be affordable.
This makes buying and selling lengthy calls extra snug.
Daily Bites is the place Bob supplies commentary on the markets and on tickers to observe for.
This is a separate alert service for merchants extra snug buying and selling spreads reasonably than lengthy choices.
While Bob prefers lengthy choices, in addition to many Chat room members, there’s nothing fallacious with buying and selling directionally utilizing spreads, particularly for newer merchants.
They can present higher danger safety but additionally have a cap on the reward.
The kind of unfold trades that Explosive Options wish to commerce are at-the-money credit spreads,
This means they’re extra directional trades reasonably than theta assortment trades (as can be in a bull put unfold).
Here is an instance of a typical directional credit score unfold taken from his unfold buying and selling portfolio.
If a inventory had been buying and selling at $96, he would purchase the $95 name and promote the $100 name with expiration a couple of month or 45 days out in time.
Because spreads don’t decay in worth as quick as with lengthy choices, we needn’t have their expiration that far out in time.
An expiration graph would present that one contract would have a restricted lack of $220 and a max achieve of $280.
That’s roughly a one-to-one risk-to-reward ratio.
This explicit plan provides you entry to a Slack channel referred to as the “Trading Chat Room.”
I poked my head inside to look and was pleasantly stunned at how pleasant and cordial the group was. People had been saying “welcome” to me and different related feedback.
As members log into the chat room throughout pre-market each day, they are saying “good morning” – each morning. It is like they’re coming to work and greeting their co-workers.
Sometimes, when a member closed out a commerce that Bob identified, they might publish “Thanks, Bob.”
How did Bob get these individuals so well-trained?
This contrasts sharply with random chaos in different teams on the web.
Other members of the chat room are additionally posting their trades and concepts.
However, if you wish to see solely Bob’s chat room commerce posts, these are filtered to a different channel on Slack.
Members use quite a lot of technical analyzes and indicators.
Bob likes to make use of Chaikin Money Flow, Traders Dynamic Index, PSAR, MACDand others.
Yes, he does.
But you have to bear in mind the Chat Room just isn’t an alert service.
For the alert providers, you have to join both the 2 plans talked about above or the all-inclusive one.
The chat-room-only plan doesn’t embody the alerts.
The chat room is only a group of extremely technical merchants posting their concepts and what they’re buying and selling.
They could publish their entries, however they won’t publish their exits.
As a dealer, it’s important to determine if it’s a commerce you need to get into primarily based in your favourite indicators.
You determine your targets and exits.
Here is one among Bob’s posts within the chat room.
This occurs to be an earnings play, which he does sometimes.
Bob purchased some Salesforce (CRM) October $210 name choices at $12, as he posted on August twenty ninth, 2023, in his chat room.
Then, I offered those self same calls two days later for $21.
Well, these name choices actually exploded in worth by 70%.
Now you realize why they name it “Explosive Options.”
Looking on the day by day charts, we see that the choices had been held over an earnings announcement that precipitated an enormous value hole:
Some of chances are you’ll be serious about how an extended possibility might be held throughout earnings.
“Wouldn’t that?”volatility crush”depress its values after the earnings?
The secret is within the expiry.
These month-to-month October calls are greater than 50 days until expiration and therefore are much less affected by volatility crush.
Even although it did expertise a few of that impact, the achieve from the big value transfer greater than offset that loss.
With a beginning graph like this:
Two days later, it regarded like this:
The chat room primarily trades these directional long gamma and lengthy vega trades.
It is true that lengthy choices decay in worth with time attributable to damaging theta.
But this can be a small impact in case you are holding the trades for a brief length in comparison with the complete expiry days.
The benefit of being within the chat room is that a number of pairs of eyes from many technically skilled merchants are higher than one pair of eyes.
As an instance, one member noticed uncommon choices exercise in ImmunoGen (IMGN), which precipitated chatter within the chat room even earlier than any information was introduced.
And when information got here out on November thirtieth, 2023, that Abbie (ABBV) was going to purchase IMGN, this occurred to the IMGN inventory.
Anybody in lengthy calls would have seen some “explosive choices.”
Another member within the Chat Room noticed a textbook morning star sample on a month-to-month chart:
Do you realize what occurs you probably have a morning star on the month-to-month?
You usually tend to find yourself with this on the day by day chart the next month:
Finally, Bob has an all-inclusive Total Access Plan, a subscription plan that features Directional Trading, Spread Trading, and Chat Room plans.
Do you realize why animals type herds? Because extra eyes are higher than one – for defense and searching.
Find your herd and commerce safely.
We hope you loved this Explosive Options Review.
If you’ve gotten any questions, please ship an electronic mail or depart a remark under.
Disclaimer: The data above is for academic functions solely and shouldn’t be handled as funding recommendation, The technique introduced wouldn’t be appropriate for traders who usually are not aware of change traded choices. Any readers on this technique ought to do their very own analysis and search recommendation from a licensed monetary advisor.
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