Karpel’s Corner: Rolling a trade vs. closing

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

How many of you have ever been in a trade where you knew that you were right, but the market was not confirming that conviction?

Well, you can always roll the trade by taking the current position and rolling it to the next month.

When you roll for the sake of getting more time to be right, just make sure that you are doing this because you have the conviction that the market is going to go in your direction soon. I have seen too many traders roll bad positions out of spite and not logic, which cost them dearly.

Sometimes it is prudent to take the loss or cut out of a loser and deploy the freed-up capital into a higher probability trade. With July expiration coming up in the next 9 days, take some time to determine if you should roll your expiring positions or just close them and redeploy.

Take a look at our proprietary list of Bullish and Bearish picks, which can be found on the top of any of the Tradespoon Picks pages.

See you next time at Karpel’s Corner!