Trade The Journey

Trade The Journey

Profit or Loss

My First Profit, I think!

This last week I begin to pressure on myself to make my first trade. Paper trading is great but it does not compare to the real thing. I’m currently using Robinhood to make small trades. Robinhood has a block on their app preventing novice investors from trading complex option spreads.

I’m not sure whether they open complex trading options to those with high balances or significant trading experience. Finally this last week, I was approved.

I’m now able to trade options spreads which allows you to take advantage of directional and non-directional trades. As I learn more about options, I’m beginning to trade away from price movements. I try to trade toward directional movements whatever they might be. Even no direction is a drection.

For the entire week, I debated on whether or not to open a position in AMC. You’ll be amazed at how many companies that you and I use everyday trade are on the stock market. I like AMC theatres and enjoy their popcorn with the natural butter.

As Peter Lynch once said, its better trade in what you already know. I’m familiar with the AMC customer experience.

I noticed the stock is a low volatility stock. So I decided to sell a in the money call option and buy a slightly out of the money call option. By doing this, I received a credit of $45. The most I could have lost in the trade is the price between the strikes minus the premium I recieved.

The trade was entered on Wednesday to be closed on Friday. I had a foggy idea of what was happening. To keep this story short, the stock didn’t move much before I closed the position. I was able to keep some of the premium and made a $10 profit.

Next time I’ll give the option more time to enter into profitability.

After the excitement, I’m now looking back at the trade trying to figure out exactly what happened.

Stay tuned for an update…

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