| Donny Yen's latest movies about Wing Chun | | | | but simultaneously attacking while blocking. This is the |
| grandmaster, Ip Man, started a Wing Chun rage across | | | | same as simultaneously "attacking" using a call or put |
| Asia. As a martial arts fan and a full time options | | | | option and then "blocking" by writing an out of the |
| trader with plenty of time for such pursuits during | | | | money call or put option in order to reduce risk. In fact, |
| daytime in Asia (since the US market opens in the | | | | most options trading strategies require simultaneously |
| evening in Asia), I went to Beijing China in order to | | | | buying and writing options, effectively attacking and |
| study this ancient Chinese martial art under Master | | | | blocking at the same time. What made options trading |
| Wong. The training was systematic and demanding | | | | (in fact, futures trading as well) so strategic is the fact |
| and I am very surprised how much there is to learn | | | | that unlike stocks where you could only either buy or |
| about options trading from Wing Chun. | | | | short (only attack) and not block (hedge using stocks) |
| Wing Chun is not only a physical art but a philosophical | | | | at the same time, you could simultaneously buy and |
| one which we all saw from how the late Bruce Lee | | | | short options of various strike prices and expiration |
| portrayed it. I found that many aspects of Wing Chun's | | | | dates in order to create options trading strategies of |
| physical and philosophy applies neatly to options | | | | various payoff profiles and characteristics. |
| trading. Here are some of them. | | | | 3. Strong, Stable Stance |
| 1. Protecting and attacking from your centerline | | | | In Wing Chun, like in most martial arts, the first thing you |
| Wing Chun's system of fighting involves attacking from | | | | learn and master before moving on to the actual |
| and defending your centerline since that is where most | | | | techniques is a strong and stable stance. This strong |
| of your vital organs as well as center of gravity reside. | | | | stance is the foundation upon which all of Wing Chun's |
| Once an attacker takes hold of your centerline, you will | | | | attacks and defenses are based upon. Similarly, |
| lose the initiative and will find it hard to turn the tide. This | | | | successful options trading need to be built upon a |
| is exactly the same as the all important concept of | | | | strong foundation of knowledge on how options work. |
| protecting and trading from your risk capital in options | | | | Without a comprehensive and strong foundation in the |
| trading. You must have heard it a thousand times how | | | | theories and concepts, one can never hope to attain |
| you must only use money you can afford to lose in | | | | success. Options trading isn't simple like stock trading |
| options trading. Options trading is all about defending | | | | where you simply determine which one and when to |
| the centerline of your trading account, which is your | | | | buy and then sell it for a profit. Options trading can get |
| trading capital. Once losses take control of your capital | | | | very complex. In fact, most beginners won't even |
| and you lose the ability to defend your capital and you | | | | know which one of the four options orders to use in |
| start breaking your trade management policies, you will | | | | order to buy an option in the first place. As such, a |
| find it very hard to turn the tide around. In options | | | | strong foundation in knowledge is critical to the |
| trading, your trade management and risk control | | | | success of options trading just like a strong stable |
| policies is like maintaining the Wing Chun defensive | | | | stance is important in Wing Chun. |
| stance, once your stance and structure is broken, it will | | | | Well, as you can see, you can learn about options |
| be extremely difficult for you to turn the tide on your | | | | from just about anything you are interested in and |
| attacker. Similarly, once your risk control measures are | | | | being strong in my interests such as martial arts also |
| broken and things start going wrong, you will find it | | | | helped me become a better options trader. I hope that |
| very hard to turn the account into a profitable one. | | | | I will gain more insights as my understanding of Wing |
| 2. Simultaneous defense and attack | | | | Chun increases. |
| Wing Chun do not believe in singular attack or defense | | | | |