Luck is a part of trading. But I'm not talking about dumb, blind luck. I'm talking about the kind of luck we create for ourselves by having a process, stepping up to the plate time and again, and giving positions the space they need for magic to happen.
In recent months, I've had some trades that one could consider lucky. But were they?
Back on September 11, I bought October $14 calls in $WBD. I liked the setup. The stock was breaking through resistance above $12.50 per share. That was me following my process.
Did I know that literally 30 minutes after I entered, news would hit the tape that Warner Bros Discovery was in talks to be purchased by a competitor? Hell no. But I was positioned to win. Was this blind luck, or did I create my own luck?
Last Wednesday, I bought March 62.50 calls in Valaris $VAL as the stock was breaking out above $61.50 per share—a fresh 52-week high. That's a pattern I repeatedly buy.
Did I know that five days later the company would be acquired by Transocean at a big premium to current prices? Hell no. Was this blind luck too?
Or how about yesterday, when I entered a bullish call spread in Lattice Semiconductors $LSCC ahead of earnings after tweeting this?
With the stock trading near $89 at fresh all-time highs, it looked like a good candidate for a hundred-dolla-roll.
Did I think it would get there that afternoon after hours when they announced earnings? Hell no. Was this blind luck?
I think you know the answers to these questions.
I'm no genius. And sure, sometimes my wins involve luck. I fully acknowledge luck and welcome it. But the trick is to create conditions for luck to happen. This is where process and persistence pay off.
Sean McLaughlin | Chief Options Strategist, All Star Charts
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