How a Pro Prepares for the Trading Day

03/27/2014 9:20 am EST

Focus: OPTIONS

Kerry Given, PhD

Founder and Managing Director, Parkwood Capital LLC

Option expert and fund manger Kerry Given discusses how he prepares for the trading day and what markets he reviews prior to the start of US trading.

SPEAKER:  I'm here with Kerry Given talking about the process of a successful technician or an analyst or a trader.  What's your daily process, Kerry? 

KERRY:  Well, the first thing I do when I get up is check the futures, and I want to see how the trading has gone in Asia the night before, and also at that point in the morning, they've opened the markets in Europe, so I check and see where that is, and that gives me an idea of what is going to happen when the market opens here.  Most of my trading is delta-neutral, non-directional trading, and so thereafter throughout the day I'm simply watching to see where the market goes, and if it trips one of my triggers, to adjust my positions. 

SPEAKER:  How early—I know this sounds like it's a really basic question—but it's fascinating.  How early do you get up before the market opens, and are you watching it all throughout the day? 

KERRY:  Yes, I'm watching it all day long, and I get up about 6 a.m. in Chicago, Central Time, so about two and a half hours before the market opens, and what I'm doing after I basically monitor my non-directional trades and see if I need to adjust something.  The other thing I look for is just simply opportunities for small directional trades.  It might be an earnings announcement or something that I think would present an opportunity. 

SPEAKER:  You mentioned you're watching it throughout the day.  Are you trading from home?  Do you watch this from home?  Do you go to the office?  What do you do? 

KERRY:  I have two different offices.  One's at home, but we also run a hedge fund, and so that's my formal office that I go to, and so I'm in one of those places all the time. 

SPEAKER:  Do you try to avoid the 'office' office as much as possible? 

KERRY:  I do, actually.  Mostly when I go there, it's when I have clients coming in. 

SPEAKER:  That's fascinating information about the process of a very successful options trader.  Thank you, Kerry. 

KERRY:  Thank you. 

SPEAKER:  You're watching the Money Show video network. 

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