Swinging Trades With Steven Place by Jayanthi Gopalakrishnan
Consistency Is Key
Steven Place is a professional trader specializing in swing trading equity
options. He focuses on structuring trades to exploit quantitative models and
technical analysis while minimizing risk through portfolio hedging. He has
been profitable in both bullish and bearish environments.
Stocks & Commodities Editor Jayanthi Gopalakrishnan spoke with Steven
Place on January 23, 2013.
Steven, tell us how you got interested
in trading options.
I run a website called “InvestingWithOptions.
we look to make people better option
traders. Back in 2006, when I was still
in college, I got interested in the stock
market. After using more traditional
investing techniques with only stocks,
I started to read up on derivatives —
futures and options and forex.
My background is in electrical engineering,
specifically wireless signals
and cellular phones and things like that.
The math and statistics used in signal
analysis carries over very well when
you’re learning the math behind options.
You don’t need to have an applied math
degree to understand options, but it helps.
It gave me an affinity toward options and
I understood it very well. That’s when
I picked up option trading to use in my
What do you do now?
I trade full-time and I also run InvestingWithOptions.
com. We have a
chatroom for idea generation and have
developed a good community of option
I take it you’re in tune with option
Yes. A lot of people who join Investing
With Options are new to option trading.
So I understand what people need when
it comes to understanding options and
learning to trade them confidently.
What are some of the common
mistakes you see among people who
want to start trading options?
One of the main problems I see
with newer option traders is that they
view options as just a leveraged stock
play, where they can get access to 100
shares of stock for 10% of the cost.
But with options, other things affect
the pricing of an option. It’s not just
stock price movement. When you
trade options, you need to not only
care whether the stock is going up or
down, you also need to care how fast
it is going to move, and how long it
is going to take to get to your price
target because options have a time
There are other things — those things
known as the greeks — that affect the
risk of the option and affect the profit and
loss of the option. A lot of people will
come to me and say, “I bought a call and
the stock went higher, but I didn’t make
as much money as I thought.” That’s because
they were not including those extra
components in the option pricing.