Damons Prefered Trading Strategies

I am often asked what I trade. "Are options better, or are stocks?" You can answer that question for your self. If you want to know how a pro does it, I will break it down and give you a sense of what makes the Smart Bomb tick...



I normally have between 5 and 10 active trades in a single account at any given time. The break down looks a little something like this.

• 5 long stock positions
• 3 synthetic long stock positions – 6 to12 months away from expiration
• 2 short term option plays. Usually single leg (directional) straddle, strangle, ratio spread or spread that I have legged in to.

I have found that this fits my style the best. The belief that one strategy is superior to another is simply not true. I used to think that I had to trade nothing but options to crank out superior returns. I tend to shift my thinking a little from time to time, but what you see here is a reflection of my style. I personally have associates that produce stellar returns using options only. I also have seen others replicate those returns by simply buying and selling stock.

This may come as a shock to some, but I have never seen one shred of evidence that would substantiate a claim that “option traders make more money than stock traders”

The best traders find a good mix that matches their own “Inner Holy Grail” and go with that. My holy grail is to trade stocks primarily- with options as a supplement.

BAM! There you have it.

The recent trade on ABM and the topic of 2 previous posts was a plain and simple long stock position (I bought shares) and I will buy more when it pops again. Here in the big time we call that a "scale in." That's a different subject all together.