Alternative Options Symbol Trading.

What are Alternative Options?

Alternative options are simply QQQ or SPY options that may be traded in place of, or in addition to, the "regular" QQQ or SPY option for which we have issued a trading signal. The use of alternative options allows to tailor the trading to better suit the personal risk profile. A trader can choose among a selection of several alternative options; these range from conservative (lower risk) options to options with a higher degree of risk.

How to trade Alternative Options?

Trading alternative options is easy. Rather than placing a trade based on the "regular" option for which we have issued a trading signal, an investor can simply purchase one of the alternative options listed in its place.

We will always initiate a position in accordance with our "Suggested Entry Price". Once this price is hit, we will establish a position in the main option. This would be the signal to open a trade for an alternative options as well. A position is simply initiated in one of the alternative options at market once the "Suggested Entry Price" for our main option has been hit.

Similarly, note that we always close our option positions in accordance with the "Suggested Exit Price". Once this price is hit, we close out our position in the main option. This would be the signal to close previously opened position for an alternative options as well. The position is simply closed in one of the alternative options at market once the "Suggested Exit Price" for our main option has been hit.

One of the main advantages of trading alternative options is that a trader can choose the particular option that best suits his/her risk tolerance. Higher risk options are generally have premium higher than the more conservative (lower risk) options. Lower risk options smaller premium; consequently, their profit potential is lower.

We prefer the trading of alternative options for several reasons:

• Traders can choose the particular options that best suit their risk tolerance. Higher risk options have bigger premium, and the expected profit is greater Conservative (lower risk) options have smaller premium. Consequently, the the profit potential is reduced.
• It is not a good idea to allocate a big amount of your trading capital to one particular option (i.e., to a specific strike and expiry date), because this could affect the market and create desire of the market to play against these investments.
• An option traders may balance their portfolios by spreading their investing dollars between risky and more conservative options. For instance a trade allocation could be:

45% to our main option symbol,
35% to conservative option symbols,
20% to higher risk symbols.