MarketHeist’s Jeffrey Lin interviews Pablo Navarro, Options Strategist for Hamzei Analytics’ HFT Stocks & Options. The first couple of months of trading stocks and options can be hard. This is especially true if you were like Pablo Navarro, starting out in college without a lot of money. How did Pablo become a full time options trader as well as an options strategist for Hamzei Analytics? Pablo has been gracious enough to share the steps he took to succeed as a full time options trader. Learn from someone who's been there instead of starting from square one all by yourself.
Jeffrey: I'm here today with Pablo Navarro. He's a full-time trader and an options strategist with HamzeiAnalytics, HFT Stocks and Options. It's a live trade-alert service for options. He's been working with Fari Hamzei and a former designated primary market maker known as The Admiral. Pablo sends out option trades from entry to exit with a full trade plan and risk award analysis as a professional trader should. These options trades range from simple, directional plays to a full, complex multi-leg spread strategies. You're actually pretty young. Would you mind telling us how old you are?
Pablo: Yes, I'm 24-years-old.
Jeffrey: So, how long have you been trading?
Pablo: I've been trading for three and a half years right now. Well, my first stocks trading was back in Colombia where I'm born. I started trading, but it was a long-term plan; just bought some stocks and let it run. That was about when I was 18. And when I came to study here in Dallas, at TCU, I started trading more often. More swing trades. I got a couple of trades going on and then I got some bad trades. That's when I got interested in not only winning, but how to keep your profits on once you get some losses, because everybody got losses. And the important thing is to manage how big you win and how big you lose. So I started studying the markets pretty intensely during my college life. And then, I became engaged with options. And then I tried to gain a lot of confidence in options, tried to do some trades that were limited risk but unlimited rewards and then tried to hit a big percentage of winners. I also tried to analyze how to repair some stocks that were going wrong, maybe tried to lower your cost basis at some times.
Jeffrey: How do you make the jump from stocks trading to options trading which a lot of people don't?
Pablo: At the beginning, most of the people tried to start with a little capital, because they don't know as much as the market. They want to risk as little as possible, so that's how I started and I thought that with options, I was able to trade bigger with some of them, get bigger gains, also limit my exposure and have the same risk because I was risking essentially the same capital that I was risking on the stocks. So that's how I did it.
Jeffrey: Well, you were saying limited risk and potentially unlimited reward, right? That sounds pretty good.
Pablo: Yes, exactly.
Jeffrey: So, what did you do after that? How did you become a profitable trader from just trial and error?
Pablo: Yeah, the beginning was a lot of trial and error, as you said. I also took OptionsANIMAL trading course. I took some seminars with them, went and completed the course. It took me around six months to complete the whole course. And after that, I just started to study a lot of technical analysis, and now I'm basically a lot more technical than fundamental driven, because my trades are very shorter term. Basically, studying a lot of how options work.
What were the mistakes that most people did? That was over leveraging and then you could not resist any downfall in your market. That was important in finishing the course. Then I started talking to Fari. We met a couple of times and then we started trading together in options and that helped also. I saw a lot of his market timing webinars, his events. How he used to time the market.
I have different, separate parts of my portfolio. Some are pretty long-term, which is like 70% of the total capital. It's going to be longer term driven. And the 30% left, it's going to be either day trading that's around 10%, and the other 20%, it's going to be more swing trades on the market.
So with the long-term, what I used to do is look at fundamentals, look at technicals, combine them, because there are going to be long-term plays. And then I go with buying some leaps, some are calls. I tried to go out of the money on some and on the other percent, I go deep in the money. I try to have a 50 Delta or even a 70 Delta on some of the positions. Almost like mimicking a stock, but, at least, two to three times the leverage and then I sell some front calls against it. And that's going to be a position that lasts around two years, at least.
Jeffrey: OK. We'll continue with Pablo with our questions in the next segment, so be sure to check out our other videos for that. Thanks, Pablo.
Pablo: Thank you, Jeff.
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ABOUT PABLO NAVARRO
Majored in Economics and Communications with a minor in business from Texas Christian University. Pablo graduated from OptionsAnimal and completed all levels that the CBOE Options Institute offers. Pablo actively manages his own accounts trading options, futures, and stocks for over 3 years. He is always pushing beyond the limits to achieve his goals. He is convinced that its all about going that extra mile and always having a plan for each scenario.