Pro Tips: Trading on the Road
Originally posted November 8, 2019
Anyone who has followed me here or on other social media sites knows that I am a part-time trader with a day job. On the upside, my day job allows me to work from home much of the time so monitoring trades is certainly easier than being at an office. On the downside, I travel quite a bit. I’m generally on a plane somewhere about twice a month. Sometimes simple day trips, other times across the ocean. So I’ve had to adapt my trading style to allow me to keep trading while I’m on the road. Of course, you can limit how much you put on if you know you’re going to be away from things but I don’t always get a ton of notice on my trips and even if I don’t put anything new on, I may have existing trades that I’d rather not exit early. So this post is about the things I’ve learned over the past few years to trade on the road. I think it will help not only road warriors, but also people who have a life and don’t want to sit in front of a screen all day. Trading is great, but so is life so we traders should be able to handle life while the market is open.
Tip 1: Trade Longer Durations
Really short term trades (which I would define as expiring in 14 days or less) can be a lot of fun. I mean, who doesn’t like to make money quickly, right? But here’s the catch: as options get closer to expiration, delta and gamma can get really significant which means you need to be ready to respond to price movements very quickly if your underlying moves against your position. In my videos I’ve said many times how I like to avoid “Gamma Week” (i.e. the week of expiration) because the price movement risk generally isn’t worth the theta reward. Now compound this with travelling and being away from the screen and you can get into trouble quickly and your trade can blow up before you get a chance to do anything which can lead to bad losses. That’s why I tend to position my trades no less than about 21 days out and regularly go 45-60 days out for many of them. This helps keep my delta and gamma under control (in exchange for less theta at the start of the trade) and gives me more time to react. Does this protect me against all big, fast moves? No. There are no guarantees in this business, I get paid to take risk after all. But if I can’t do something for an hour or two, I have a much better chance to take action when my price risk is lower.
Tip 2: Set Alerts
When I’m, away from my main trading station, I may not be in a position to check the market as much as I would normally. I’m probably away for a reason whether it’s driving, flying, a client meeting, and constantly checking the market isn’t always possible or even the right thing to do. So before I head out (sometimes even the night before), I take some time to examine my positions and find the price levels where I would want to take action. Of course, I will always have a closing order at my broker to take off my position if it hits my target, but I want to be alerted if my underlying hits a point where I would consider an adjustment. Any decent trading platform has a feature where it can send you an alert if certain market conditions are met. At a minimum, I can be alerted if an underlying hits or breaks certain price levels. Some platforms allow clients be alerted if certain options in their positions break certain greek level (e.g. the delta of option X goes higher than 8). So I decide those levels up-front and set alerts on my phone to buzz me we’re getting close to a point where I’d like to adjust. I can’t always act on it immediately, but it’s nice to know if it’s even an issue so I can figure out when to pay more attention to my positions and take some action. Which leads to….
Tip 3: Pre-stage Adjustments
When I’m away from my home office, it’s not always possible to fire up my laptop and make an adjustment. But building spreads on a phone app isn’t the easiest thing to do even with good platforms if, for no other reason, the screen real estate is limited. So along with my alert that a position may need attention, I will pre-stage an adjustment in my platform to make it easier to execute it on my phone. Since I always have a plan for each trade before I put it on, I know what I want to do if my underlying reaches a certain level. The simplest case is to close the position. In that case, since I already have an order at my broker to close, it’s simply a matter of changing my limit order (ALWAYS use limit orders), to a price that can be executed. However, in the case where I want to adjust, I will pre-stage my adjustment at my broker but set an unrealistic price so that it will never be executed. For example, let’s say my adjustment is to buy a spread, and let’s say that spread currently has a mid-price of $9. I will put in an order to buy the spread at $3. There is very little chance that spread price will ever be filled which is exactly what I want. So, as in the first case, I can simply change my limit order to a realistic price that can be filled at that time. That way it is possible to get my desired adjustment on even with the simplified interface of a phone app. And this is something that could be done during a “bathroom break” or some other similar moments that happen throughout the day.
Tip 4: Leveraging the Cloud
There are times when I can’t be near my trading station but it’s not circumstances make it tough to trade on the road. Ever tried to trade with flaky airplane internet? It’s not pretty. Another airplane problem is that you can’t use your laptop during takeoff and landing…but you can use a tablet. But, if you’ve watched my videos in addition to my trading platform I use a modeling software as well and the one I use only runs on Windows: not an ideal platform for my iPad. My solution for this is to leverage the cloud, namely, Amazon Web Services (aws.amazon.com). There are others out there and if you prefer them, that’s fine but the concept is the same. I have found that I can run a Windows machine in Amazon capable of sustaining my trading platform and modeling software for about $.032 an hour (yes, that’s 3.2 US cents an hour). Doing this gives me a couple of advantages.
First, I can run access this Windows machine from just about any platform by using MicroSoft’s Remote Desktop Protocol (RDP). Clients are available for just about everything out there including tablets, as well as non-Windows computers. This gives me a full Windows experience with all of the software tools I have at home (other than screen size) at a really affordable price since I only pay for the time I actually use it and I shut it down when I’m done for the day and I pay nothing while it’s shut down. So a big AWS bill for me for a month would be $6-7. It’s usually less.
But second and, perhaps, more importantly it helps with the low bandwidth/flaky internet problem because all of the connections to my broker are going over Amazon’s network which is pretty stable and fast. And the only traffic coming over the airplane internet is the stream of the screen and the keyboard/mouse inputs from my device which has very low demands in comparison. So by doing this, I’ve been able to not only adjust but to initiate new trades over the Atlantic on airplane internet on my iPad. This is very convenient and the price is quite reasonable. This may not be for everyone, but I think it may help some folks out there with similar issues. If you’re interested in how to set this up, I’ve included a link to a video below which I will also upload to my BitChute channel.
Anyway, I hope some of these tips help traders out there who, for whatever reason, can’t sit in front of a screen all day. If you have any questions/comments about this, please don’t hesitate to reach out. Or if you have other cool ideas, feel free to share them.
This content is free to use and copy with attribution under a creative commons license.