Start the conversation
Over the past few days, I've gotten several great questions from you about what I see happening in the markets next.
You've also been asking about the best ways to manage your trades for maximum profits and minimal risk.
And I want to make sure you get the answers you need right now.
So let's get started…
Summer Mailbag: Your Questions, Tom's Answers
1. What do you see happening in the markets this month? Which sectors and strategies could offer the best profit opportunities?
Based on my proprietary tools, the next two weeks are showing a lot more bullish opportunities than bearish ones. This means that the most popular stocks in the market right now are showing a tendency to climb higher during the first three weeks of the month. I'll be giving you my outlook for the rest of the summer – and the best ways to profit – later this week, so stay tuned.
2. I'm newer to options, and my trades often don't get filled the same day. How long should I wait before canceling my order and starting over?
It depends. If you're trading weekly options, I don't encourage keeping your order open for more than a day. If you're trading 30-day options, then I'd cancel the order if it doesn't get filled within a week. And if you're trading longer-term options, like long-term anticipation securities (LEAPS), you can really keep your order open for up to month – particularly if you're just waiting to get a better price.
3. How do you calculate limit prices (entry and exit) for spread trades?
I take the worst possible fill price and the middle price between the bid/ask prices and work my way through them. I'll walk you through exactly what I mean in my video above.
4. What happens when an option contract is going to expire worthless? Do you need to act on it in any way – or can you just let it go?
You can do both, but I generally try not to let an option run until expiration. For example, in my premium service, Money Calendar, I choose options with expirations that run past the trade's end date. That way, there's still a lot of time value left when it's time to exit. That said, there are cases where letting the option expire worthless is better than to exit early and pay commissions, such as when the fees you'd pay to exit the trade cost more than what you paid to get in.
The exit strategy I recommend to my Money Calendar readers has been working extremely well so far this year. In fact, we've closed out six triple-digit winners in the past month alone for a total 745.51% windfall.
Now, I'm releasing two new trades right before opening bell Monday morning, and I expect these to return at least 233%.
5. After Amazon's recent buyout of Whole Foods, do you think Wal-Mart will be able to keep up? And for how long?
About the Author
Tom Gentile is one of the world's foremost authorities on stock, futures and options trading.
With more than 25 years' experience trading stocks, futures, and options, Tom's style of trading systems and strategies are designed to help individual investors propel themselves past 99 percent of the trading crowd.