How To Trade Index Options for a Living
Tim: Hello everybody and welcome back. Thanks very much for joining me for another show. Today, we're going to be speaking with J.W. I wanted to get him on the phone and talk to him about how he finds good trades, what kinds of things he looks at the markets to find good opportunities, and just generally overall, how he looks to make money trading. So first of all, J.W., thanks for joining me on the phone today.
JW: It's great to be here and I'm looking forward to it.
Tim: All right so first of all, I always ask, the first question is what kind of trader are you in terms of a day trader or a swing trader and then what markets do you trade?
JW: You know, I would probably say most of the time swing trading. Occasionally, I will do some short-term trades, but for the most part swing and even occasionally some longer term types of trades. As far as markets, mostly obviously, I focus on options and I mostly trade US equity indices and US ETF. And I do occasionally use some individual stocks, but primarily just focus on the US and obviously with the ETFs, they can vary as far as other countries, you know, country ETFs etc. But for the most part, I stick primarily to the S&P 500 and traditional ETFs.
Tim: Okay. So, you focus on options on those indexes and options on those ETFs or will you trade the ETFs outright as well?
JW: Typically my focus is on options but I do trade futures. I also trade individual ETFs in my own accounts as well.
Tim: Now, options, you know, we do a lot of option traders, we've interviewed a lot of option traders and some of their strategies are really simple, others get really deep into credit spreads and debit spreads and all the butterflies and things like that. Kind of talk about your overall strategy for trading options, how do you do...
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