When to Close a Winning Trade and Reset a Cleaner One

On Five Minute Futures, Chris Vecchio walks through a full round trip in the Russell 2000 futures: he closes out a winning defined risk bearish structure and immediately resets with a cleaner one. The lesson is in the management. Once the market moved his way, the greeks and the edge changed, so rather than let a winner ride down the decay curve and risk giving it back, he takes it off and re-expresses the view. He then lays out a simpler bearish trade, a defined risk long put spread, to play a possible double top in the Russell, with the thesis that small caps have been lagging on the way up and tend to lead on the way down while oil and rates stay elevated. He also flags that he is not outright bearish, he still holds long index positions into year end. Views are the speakers' own. Education, not a recommendation. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 00:00 Closing the old bearish trade 00:47 Why the structure worked 01:41 Taking the winner off the table 02:10 Why not let it ride 02:51 The new double top setup 03:08 A cleaner long put spread 04:00 Why small caps lead lower 04:44 Letting volatility do the work #tastylive #russell2000 #rty #futures #putspread #smallcaps #definedrisk #chrisvecchio #cmegroup #optionstrading tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.