BABA Flush Point | Live Options Day Trading

Day trading options live on BABA for the flush point play. This video uses a one lot (one put option contract) to illustrate the power of a good strategy and eliminating guess work.

On this options day trade we were looking to take advantage of the flush point pattern happening on the 5 minute stock chart on BABA (AliBaba Inc.). We had a known entry point, target, and stop loss all in place before even entering the trade.

A key take away from this live options day trade is that you need to know when to stop out and stick to that stop loss plan. On AliBaba, although we didn’t get taken out (very close to triggering the mental stop) we knew where we had to exit to maintain a solid risk to reward strategy. If our profit target was not hit then we would have used a trailing stop to make sure that this options day trade did not turn into a loser.

When trading options picking the right strike and expiration for the contract is key. On this trade we are using next weeks options, and using the strike just at the money, but not an in the money put option. If you want to learn more about strike and expiration selection feel free to join the discord server linked above and discuss in the trading community.

We used options instead of day trading the stock outright on BABA because our profit potential is much greater and capital allocation is much less. Imagine needing $26,150 to have the same exposure that we had using only $320.