Time is Money

Written and contributed by Cynthia Sarver, Successful Options Trader of the Month

I’m amazed by day traders.  That ability to sit in front of their monitors for hours on end, watching every blip and tick of the market is something that I just don’t understand.  (Do they blink?  When do they eat?  Do they even go to the bathroom?)

Of course, that attentiveness and amount of time they spend staring is how they meet THEIR goals, both financial and otherwise.  And “otherwise” is what I want to write about today.

I ended up trading mostly because it was interesting, I was good at it and it’s always nice to have a hobby that makes money.  Still, I do consider myself more “retired” than “working.”  I’d like to keep it that way, too.

My last blog was about meeting financial goals, but what about personal goals that might impact your trading plans?

For instance, I let time constraints dictate my trading style.  I have a lot of other hobbies I enjoy that consume a significant amount of my time (and, of course, the critical Afternoon Nap Time which MUST be honored!).  More importantly, these hobbies often involve regularly scheduled events (mostly during trading hours) so I can’t spend that time watching my trade or I’ll completely miss my class/meeting/luncheon/whatever.   And I like my classes/meetings/luncheons/whatevers!

This meant I needed a trade that wouldn’t require sitting in front of my monitors for hours at a time every day.  (And, too, binge watching candlestick charts just doesn’t do it for me.)

Selecting a trade that requires me to spend no more than a single, regularly-scheduled hour during the trading day (other than the Triple E’s – Entry, Exit and Expiration week) means that I can still meet my financial goals AND keep up with my other interests that have less time flexibility.  The other hours that I spend watching webinars, back testing (and, of course, writing this blog!) can be done anytime during the day or evening, which gives me that necessary freedom in my schedule.

I suspect that many of you have time constraints, as well.  Perhaps you still have a “real” job and can’t spend all your time watching the market.  (Well, you COULD but when your boss finds out what you’re doing you’ll probably find yourself becoming a full-time trader a little faster than intended.)  Perhaps this is something you just do to supplement your other retirement income and you don’t need to spend much time trading since your financial goals are modest. Or maybe you just don’t want to do it 8 hours a day.

Whatever the reason, the amount of time you choose to spend actively trading is something that needs to be taken into account when deciding which trade is right for you.  If you enjoy watching the trade constantly (or if you’re one of those people who can’t just ignore it when the market is moving), perhaps a higher gamma trade will make you happier.  If like me, you only want to check it once a day (and yes, sometimes it’s hard when the market is going against you but that’s my plan so I stick to it), a smoother T+0 will make you happier.

It may also help you decide how far out you want to place your trades.  If you can’t necessarily get to your trade at any given instant, you probably don’t want to be near expiration, so 56-75 DTE (or even LEAPS) may fit you just fine.  Enjoy watching the market?  Perhaps 9-day trades might be perfect.  Heck, even shorter trades may be a great alternative for you.  If you have the bladder for it, try day trading!

Whatever you choose, though, has to be right for you.  Think about your personality, your preferences, and your schedule.  Then add these to your financial goals and you’re well on your way to selecting your perfect trade!

Written and contributed by Cynthia Sarver, Successful Options Trader of the Month