How To Make Money While Sleeping (And Not Be Glued To The Markets)

Ever found yourself tossing and turning at night, wondering if you need to set an alarm to catch the late-night performance of the US stock market? Well, if you're in Singapore or Malaysia, the US stock markets open around 9.30 pm (or 10.30 pm during daylight savings), and the burning question arises: is it necessary to sacrifice sleep to monitor and secure profits before the market makes its mysterious moves?

The answer, my friends, is a resounding "no." Let me share with you not just a strategy but a philosophy, backed by a real-life case study involving the renowned TSLA (Tesla) and the magic of GTC (Good-Till-Cancelled) orders.

Case Study: The Enigmatic $312 Profit from TSLA

Imagine waking up to find an extra $312 in your trading account without lifting a finger. That's precisely what happened to me with TSLA, and let me unfold this magical tale for you.

First things first, I was blissfully unaware that my TSLA bear call spreads had closed until I casually logged into my brokerage account the next day on my desktop. 

<Oh, and here's a nugget of wisdom – I deliberately don't have the mobile app on my phone. Why? Because I refused to be glued to the market, making impulsive decisions that I might regret later.>

Now, the million-dollar question: How did this $312 profit materialize without me even realizing it?

The hero of our story is none other than the GTC order.

GTC Orders: The Unsung Heroes of Trading

GTC orders, short for Good-Till-Cancelled, are like the loyal guardians of your trades. They stay vigilant until the mission is accomplished or canceled. 

Picture this – when I sold a Bear Call Spread on TSLA on January 30, 2023, for $0.77 per contract, I swiftly set a GTC order to buy back the TSLA contracts at $0.38. After that, I nonchalantly logged out of my computer and let the magic unfold.

Why did I choose this automated path?

Well, the stock market is a realm of unpredictability, akin to a rollercoaster ride. I want the flexibility to close my positions when the stock moves in my favor without losing sleep.

The GTC Order Unveiled: Charting TSLA's Journey

The next day, like a silent guardian, my broker sold my position on January 31, 2023, the moment TSLA's stock price moved favorably.

Glancing at the TSLA 5-minute chart from January 30th to January 31st, you can witness the share price gracefully recovering after the sale. This automated action not only saved me from missing out on profits but also showcased the power of strategic planning and the role GTC orders play in an investor's toolkit.

Navigating the Maze of Option Spreads

Now, let's delve into the intricate world of option spreads. If you've ever tried manually closing your option spread trades, you might relate to the challenge. It can feel like attempting to solve a Rubik's Cube blindfolded.

Here's the secret sauce: option spreads are a dynamic duo – two trades bundled into one (your sell strike and buy strike). Take, for instance, a BCS Spread, where you buy an option at Strike Price A and sell an option at Strike Price B.

Closing the trade involves your broker finding the perfect moment to close both legs simultaneously, adding a layer of complexity. That's why I only embark on option spreads with tight bid-ask spreads (of less than $1), typically opting for stocks with more than 3 million in average trading volume.

But here's the kicker: I don't just stop there. I enlist the help of GTC orders to make the process smoother. The broker automagically closes the trade, sparing me the need to hawk-eye the market constantly.

GTC Orders: Profit Yes, Loss No

Now, let's address a pivotal question: do I use GTC orders to cut losses?

Buckle up because the answer is a firm "no." When it comes to cutting losses, I prefer a hands-on approach.

One of my cut-loss rules involves observing the closing price of the market. It's about checking whether it has closed above the resistance for a bearish trade or below the support for a bullish trade. This requires my attention after the stock market bids farewell for the day, allowing me to make informed decisions based on data, not emotions.

Summary

In a nutshell, here are the key takeaways that paint the vibrant canvas of successful trading:

1. You don't have to be a nocturnal trader. GTC orders are your magical wand for securing profits without losing sleep.
   
   
2. Option spreads might be a puzzle, but opting for those with tight bid-ask spreads (less than $1) and ample trading volume (over 3 million) simplifies the game.
   
   
3. GTC orders are your companions in automation, streamlining processes and preventing FOMO-induced profit misses.
   
   
4. When it comes to cutting losses, be hands-on. GTC orders might be magical, but they're not the right tool for this specific job.