Uncovered Options Trading System

Options Autotrading
143 signals were traded since 2016-20
only 6 red

Suggested Stop


In situations where the market does not move in our favor, we can prevent substantial losses by the use of stop losses. A stop loss could be issued in a situation when our signal is in the profit and our system indicate a possibility of move against the currently profitable position. Furthermore, in some situations we may consider that it is safer to set stop-loss in order to protect profit. We will close out a position and take a loss when a trade was initiated in accordance with our signal but the value of the short option increased rather than decreased, reaching our "Suggested Stop-Loss Level".

We do not always provide "Suggested Stop-Loss Levels" at the same time we issue a signal. We may instead:

Note: An alternative way to protect the system from a big loss or to secure already profitable signal is by simply moving the "Suggested Exit" price to the level when the signal will be closed. In some cases, we may use both ways - our system may generate stop-loss and we may move the "Suggested Exit" price - by reducing the traded price range to the minimum when either Stop-Loss or the "Suggested Exit" is hit and the position is closed.

Stop-Loss FAQs

In some cases we may not state a "Suggested Stop-Loss" price when a new signal is generated by the following reasons:

  1. When our signals are based on strong term indicators and we do not want our stop-loss to be hit as a result of a correction;
  2. In trading naked options, the time factor is on our side and out trading system indicate side-way trading and we prefer remain in position;
  3. We prefer waiting for options expiration with expectation of them to expire worthless when we may pocket 100% of premium.

Yes, a new stop loss could be set after a signal was generated and after an option position was initiated. The market is in constant change and what was bullish yesterday could become bearish today and opposite. If our trading system indicates changes in the market sentiment and we consider that it is better to close an options position in order to cut losses or protect profit we may set a new stop-loss (if it was not set when a signal was generated) or change an existing one.

Mostly, a stop-loss is issued to protect a gain or to limit a loss. In both cases we do it when our trading system indicates possibility of changes n the market sentiment and we consider that it is better to go in cash position.

At the same time, there could be a situation when when we expect just a short correction and we see the possibility to close the current position with profit and re-enter it again in a short period of time at better entry price with expectation for an additional profit.

In case when our "Suggested stop-loss" price is hit, we will close out our short options position at the stop-loss price. As a rule, we wait for a confirmation email from the online brokers who autotrade our signals and then send an email alert out that our short options position was closed at our stop-loss level.

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DISCLAIMER: THIS INFORMATION IS INTENDED FOR EDUCATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE ANY FINANCIAL ADVICE. RISK IS INVOLVED IN ALL STYLES OF MONEY MANAGEMENT. Uncovered options trading involves greater risk than stock trading. You absolutely must make your own decisions before acting on any information obtained from this Website.

The return results represented on the web site are based on the premium received for the selling options short and do not reflect margin. It is recommended to contact your broker about margin requirements on uncovered options trading before using any information on this web site. Use our "Trade Calculator" to recalculate our past performance in relation to the margin requirements, brokerage commissions and other trading related expenses. Past performance is not indicative of future results.

Risk Statement:

Naked options trading is very risky - many people lose money trading them. It is recommended contacting your broker or investment professional to find out about trading risk and margin requirements before getting involved into trading uncovered options.

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