Finding outsized options gains can be challenging in volatile markets like this one… And when we find them — even after hours — we want to take profits.
So how do you collect after-hours options gains?
Sometimes, a stock makes wild moves in the after-hours session, only for shares to trade lower at the open.
When this happens to a stock in your portfolio, it’s possible to place an extended-hours order to lock in those gains.
We like to trade options here at New Money Crew, and the options market is only open during regular trading hours…
But that doesn’t mean options traders have to just watch from the sidelines after hours, wishing and hoping those options gains will be there when the market opens.
With some basic options knowledge, a little outside-the-box thinking and a margin account, it’s possible to capture some after-hours alpha.
So let’s dive into how to collect after-hours options gains, and add a powerful profit weapon to your trading arsenal…
How to Collect After-Hours Options Gains By Shorting Stock Against Long Calls
In order to lock in and collect those after-hours options gains, we’re going to short some stock against our long call options.
It might sound intimidating, but all we’re doing here is using some basic trading knowledge to take advantage of the situation.
After all, what is an option? An option is a contract that gives buyers the right — but not the obligation — to buy or sell 100 shares of a stock at an agreed-upon price (the strike price) and date (the option expiration).
And the price of the underlying stock is a key factor in how much we pay for each contract — called the premium.
Because of those two facts, when a call option breaks out after hours, traders can take action to secure gains by shorting 100 shares of the stock per options contract you hold.
Check out the short video below and I’ll walk you through exactly how to collect after-hours gains against long options with a trade on Marqeta Inc. (Nasdaq: MQ).
And don’t forget, you can follow me @LanceIppolito on Twitter, Instagram and our YouTube channel for more trading insights and tips. And as always, you can find me right here talking stocks and options trading — and printing money — on WealthPress.com!
P.S. Very few people know this, but almost 90% of trades in today’s market are controlled by algorithmic systems…
So people who don’t take advantage of them are missing out!
But don’t worry, WealthPress Senior Strategist Roger Scott designed the algo with an edge over the market… And he’s ready to show everyone exactly how to apply this same edge to their own trading..
With this special algorithm, Roger’s been able to whip the S&P 500 by 371% since 2020!