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Suggested Exit Price.
We do not issue signals to
indicate when a purchased option should be sold. Instead, at the time
a signal is issued, we state a "Suggested Exit Price". When an option
trades at or above that price, we sell it.
Depending on the current market
situation, we may change a "Suggested Exit Price" after a trade has
been opened. For example, if the market goes against our trade, we may
lower the exit price in order to reduce losses. By the same token,
when the market continues to move in our favor, we may raise a
"Suggested Exit Price" in order to increase profits.
We notify all our members about
such changes by e-mail and post the new "Suggested Exit Price" on the
current signal page.
Question:
To close a trade, should a
trader
always follow your “Suggested Exit Price”?
Not necessarily: If a trader follows
our signals, he/she can always choose an exit price that better suits
trader's risk tolerance and trading strategy. If a trader has other trading
indicators that show the market could continue to move in his/her
favor, a trader may decide to choose a higher exit price and thereby
increase the probability of achieving larger profits.
Important:
We generally don't recommend
setting stop-losses or using limit orders based on our "Suggested
Exit Price". The market has a habit of hitting stop-loss orders
simply because they exist. If enough stop-loss orders are clustered
at a specific price, the market will not hesitate to take them out.
Exit Price.
The exit price is defined as the
actual price of an option at the moment a trade is closed.
The exit price is usually equal to the "Suggested Exit
Price". It could, however, be substantially higher when a trade is
closed when the market opens significantly above the "Suggested Exit
Price".
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