Earlier in the week, JC & I were chatting online about some possible trade opportunities, and we had the following riff on Microsoft $MSFT:

Fast forward to today and $MSFT volatility has come in a smidgen.

The fact is, $MSFT has been in a $10 range since early June. I’d share a chart with you, but you’d be bored as the range has tightened even more in recent weeks into basically an $8 dollar range. To me, especially in this tape, $MSFT is beginning to look like a coiled spring that can pop in either direction. It just needs a catalyst. That catalyst might be coming on October 23rd when it announces its next earnings report. Or it could be...

A funny thing about Gold is, people who have any kind of opinion on it are either EXTREMELY bullish, or EXTREMELY bearish. There tends not to be any middle ground. No surprise it is such a politicized instrument.

Well, I don't care about any of that. What I do care about is volatility priced into options in this space continues to be pretty juicy at the moment while prices of many Gold underlyings appear to be stuck in a sideways holding pattern. (You won't hear any talking head loudly yell on CNBC: "I THINK GOLD GOES SIDEWAYS!" LOL).

And the boys at ASC agree with me, having published a neutral opinion on it in their recently published ASC 4th Quarter Playbook. So let's get into the play that makes most sense from here.

Quick little post offering a teachable moment in a currently open position on my books.

Risk management is Rule #1.

Last month, I put a trade on that didn't work out. Believe me, it happens (shocking, I know! /EndObviousSarcasm). There was a level that invalidated my thesis and it was breached. I don't fight with price action. When price is speaking, I listen. So the trade was exited and I moved on, accepting my manageable loss.

Fast forward just one week from my exit and the chart has repaired itself and has established a newer, clearer level to lean my risk management against. My overall bullish thesis on this stock hasn't changed, and now with new levels to observe, I'm going back in for a new try with a similar spread, but at new strikes and a new expiration.

Geez... the calendar turned into October and traders are acting like Halloween is already here! The up-and-down trading action so far in the first three days of October can be downright frightening if you're chasing every whipsaw in this schizo tape.

Considering my portfolio is leaning a bit long at the moment, it feels prudent to put some downside exposure on.

The biotech space has been a laggard all year. If broader markets still have additional spook in them, it is likely biotechs will lead the way. So I'm positioning myself accordingly.

This is the video recording of the October 2019 Conference Call for Members of All Star Options

Ok, today's title is a cheeky play on the ticker symbol I'm trading today. I couldn't help myself.

Today I'm getting into a low conviction trade, but shifting the probabilities in my favor so that even if I'm wrong, I still have a good chance of reaching my profit objective. Pretty sweet, right? This is one of the many reasons I like trading options.

It's that time again where we start heading into the next monthly expiration cycle and I review any options positions that remain open which might require some adjustments, monitoring, or closing before we get too close to expiration.

The October expiration cycle has been good to us. At the time of this writing, I've already closed two positions that hit my stop loss levels ($NKE, $DE), and two others that hit my profit objective ($GLD bull call spread, $PHM bull calendar spread). And as usual, the bulk of profits for this cycle came from just a couple trades.

These are the remaining open October positions that need some monitoring:

During the course of my day-to-day engagement with the markets and market participants, including subscribers to All Star Options, I'm often asked my thoughts about how I would manage some position that somebody is in. Usually goes something like this:

Sean, I've been in this inverted double reverse downward dog position and now I'm losing money. What should I do?

Ok, so I made up the name of the position, but you get my point. People do weird things and they are looking for help.

One commonality I get from people engaging with options is that they bought long-dated calls (sometimes Leaps) in stocks they are bullish on in lieu of buying stock. And they got lucky -- real lucky. So lucky in fact that they are sitting on enormous open profits on calls that are now WAY in the money.

But this has them in a bind.

They want to continue to participate on the upside if the stock has more room to run, but they are scared to death of losing any part of their open paper profits. It's getting to a point where they are paralyzed with indecision. I've been there. I know...

Sometimes, the charts set up where one could make a case for a consolidation being on the cusp of breaking out. One such beleaguered company appears to be doing just that. If there's any follow through, there is blue skies ahead and I've got a play lining up on the runway to take advantage of the tailwind.

I love it when steady dividend payers breakout to all-time highs. What's better than a stock breaking into blue skies and paying you a dividend to hold on? In the recent All Star Charts monthly conference call, JC uncovered an opportunity in an insurance company stock that has us thinking about profits. Sure, we options traders don't get to collect any dividends, but it is nice knowing that yield-starved savers will keep a bid under stocks like these as long as interest rates remain comically low.

All else being equal, when deciding between two or three viable trades, I'll often choose the one that offers me the best opportunity to neutralize my "greeks risk." Meaning, if my overall portfolio is leaning a little long delta, I might favor the new trade that is short delta. If I'm long a bunch of premium and therefore have a high negative theta score for my entire portfolio, I'd likely choose to add the trade that offers me the most positive delta. My thinking being: if I can neutralize as many greeks as possible, then I put myself in position to let the individual edges and risk-reward ratios play out in my favor without getting negatively affected by any sudden changes in the overall market.

This also applies to timeframe.

A quick scan of my open positions today revealed that I have a relatively high number of open positions with October, December, and January expirations. But just a couple with November expirations. So taking an idea from All Star Charts' September Conference Call, I've found an opportunity that we can play in November.