Traders can be solitary people, focused laser-like on their research and buy-sell decisions. But not the Trentons. For the last seven years from their home in northern New York overlooking the Saint Lawrence River, Cathy and Stephen Trenton have had a rare trading relationship: She decides what to buy and he decides when to sell.
“I get in and he gets us out,” says Cathy, a former school lunch director, during a break at the New York Traders Expo in February. “Cathy takes the time analyzing charts and research,” adds Stephen, a former fire chief, “and she gets us in. That’s where my job begins.”
Trading style fits their personality
The division of labor seems to work well for the Trentons. Cathy is the methodical analyst, filtering through the research and charts. “I like to take my time analyzing things,” she says. Among her favorite tools: moving averages, stochastics, MACD, and Williams %R.
Once Cathy makes a trade, the former fire chief takes over. “I decide when to pull the plug,” explains Stephen. It’s a strategy that has worked for them over the years. Cathy got the trading bug from her dad, who used to trade for himself as well. He piqued their interest, but they are self-taught investors who devour all the information they can—online and at conferences like the Traders Expo—to put themselves in the best position to make profitable trades.
They’ve learned new strategies and have developed different tactics over the years. Now, they exclusively trade options. “We’ve been trading options for about seven years,” Stephen says. “We like how options allow us to control more stock than we would be able to trading the shares themselves.”
Making use of new tools
Even though trading is one of their passions, until recently the Trentons felt tied to their computers. As Stephen puts it, “It bothers me to have unexpired options (i.e., an open trade), particularly when we’re traveling.” The availability of the One-Triggers-a-One-Cancels-the-Other (OTOCO) order has them very excited.
“Now we can invest with much more confidence,” says Cathy. The order enables them to more effectively implement their strategy by putting in their initial order as well as two conditional orders—one above and one below the current price.
They also like the flexibility the Fidelity Mobile® app gives them. For example, at a time when the couple held Netflix (NFLX) unexpired options, Stephen was watching CNBC on a plane as an earnings announcement was made. “After I got off the plane, I traded our Netflix options from the front seat of our car to the tune of a nice profit,” he recalls.
More memorable trades
Another trade the Trentons recount is a relatively recent one involving Google (GOOG) calls. “We had one call at first, and the position was in the red,” Cathy recounts. “But my charts said Google was still looking good. So I decided to buy more a month out from expiration, and thought that if it goes bad, we’ll get out.”
Cathy purchased the additional call options when the search engine company was trading around $935. To be sure, Stephen was a little nervous at first. “My hands were shaking, but she had a feeling.” After an earnings announcement, the stock went over $1,000, resulting in another great trade for the couple.
Advice from the power couple
What advice would the Trentons give to other traders? “You need to have a strategy, and stick to it,” says Stephen. Among their personal rules: Never buy a stock under $25 and with less than 750,000 shares traded daily. “Liquidity is important to us. You always want to be able to get out of a trade when you want to.”
“Get educated,” Cathy adds. “Go to conferences. Fidelity has a lot of free training at branches and online.”
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