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SteadyOptions - Mar 03 2014 02:27 PM
Self Managed, Auto-Trading...
SteadyOptions - Jan 03 2014 03:14 PM
Self Managed, Auto-Trading...
pezzodefero - Jan 03 2014 10:07 AM
Market thoughts and Anchor...
fradav - Dec 01 2013 09:42 AM
Market thoughts and Anchor...
cwelsh - Nov 29 2013 11:21 AM
Market thoughts and Anchor...
tjlocke99 - Nov 24 2013 10:11 PM
The Right Way to Trade Options by Mike Swanson
When it comes to options trading in order to make money you need a strategy that treats options as trading vehicles in their own right and not as mere leverage tools. But a lot of people that get into options trading do not do this.
I know because I wrote a top selling investment book titled Strategic Stock Trading and run the financial blogging site wallstreetwindow.com so I get emails from hundreds of new traders a month.
SteadyOptions continues to deliver outstanding gains. Our alerts produced a 69.2% ROI in the first quarter of 2014. That's over 40% return on the overall portfolio, based on 10% per trade allocation. We closed 45 trades, 32 winners and 13 losers. Check out the Performance page to see the full results. Please note that those results are based on real fills, not hypothetical performance, and exclude commissions, so your actual results will be lower. Commissions reduce the monthly returns by approximately 2-3% per month, depending on the broker. Please refer to Performance Dissected topic for more details.
I'm pleased to introduce an article from a well known Seeking Alpha contributor Regarded Solutions.
Regarded Solutions offers a subscription based e-mail service for investors who seek an education on portfolio management as well as watching 3 unique portfolios develop. The cost of a subscription for 2014 is only $75.00 for the whole year. These exclusive emails will not be found published on any website, they will be delivered directly to your email inbox, just for you.
Email at: email@example.com to subscribe today.
I'm asked many times which product is better to trade: Index options or ETF options? Is IWM better than RUT? Is SPX better than SPY? There is no simple answer to that question. If one product was superior to other, the other would not be trading anymore. There are pros and cons to each product, and this article describes different aspects of trading Index options vs. ETF options.
SteadyOptions is pleased to introduce a new addition to our products - the Long-Short Strategy. This strategy is offered as a managed product only in the form of a managed account or auto-trade. The LS strategy can be auto-traded through Lorintine Capital as part of a Steady Condors subscription for $10,000-120,000 accounts. For accounts larger than $120,000, it can be implemented in a managed account.
The strategy is a combination of multiple non-correlated models designed to take advantage of the intermediate to longer term supply and demand realities of the markets through actively risk managed exposure to traditional, leveraged, and inverse mutual funds and ETF’s.
A calendar spread is a strategy involving buying longer term options and selling equal number of shorter term options of the same underlying stock or index with the same strike price. Calendar spreads can be done with calls or with puts, which are virtually equivalent if using same strikes and expirations. They can use ATM (At The Money) strikes which make the trade neutral. If using OTM (Out Of The Money) or ITM (In The Money) strikes, the trade becomes directionally biased.
The maximum gain is realized if the stock is near the strike at expiration of the short option. If this happens, the short options will expire worthless but the long option will still have value. How much value? Depends on IV (Implied Volatility) at that moment.
A while ago I got an email from one of my Seeking Alpha readers. He told me that he is a big fan of my articles and asked how he can learn more. He wanted to make it his new career. He asked me if I can recommend any books or internet sites to learn/practice the options strategies. Then he said that he is new to trading options, he set aside a small amount of money in hopes of doubling it at least yearly.
Don't you find it amazing? The guy admits he is new to options, but wants to double the account "at least yearly".
For those not familiar with the straddle strategy, it is a neutral strategy in options trading that involves the simultaneously buying of a put and a call on the same underlying, strike and expiration. The trade has a limited risk (which is the debit paid for the trade) and unlimited profit potential. If you buy different strikes, the trade is called a strangle.
Diversification is a commonly used word in the financial and investment industry. Most would agree it's important. In this article I'd like to share why I feel it is more than important, but really the only way to have a successful long term investment experience. Dalbar Inc. has shown study after study that investors consistently underperform the broad markets by significant margins. "For the twenty years ending 12/31/2012 the S&P 500 Index averaged 8.21% a year. A pretty attractive historical return. The average equity fund investor earned a market return of only 4.25%."
I'd suspect that a similar study of the average newsletter investor chasing past performance would be even more extreme.
Here is the inconvenient truth about successful trading. It’s work.
Trading is more than just numbers — it is a three dimensional fight that rages primarily inside the traders themselves. Missing any crucial element can ruin a trader quickly. The trader must first develop a robust trading system that fits their own personality and risk tolerance. Then they must trade it with discipline and faith consistently through ups and downs. But that’s not all. Risk exposure must also be managed carefully through position sizing and limiting open positions. The risk management has to be able to carry the trader through the losing streaks and enable survival for the chance to even make it to the winning side.
We are pleased to introduce a new subscription package - Level 1 subscription.
This subscription will provide access to all members forums except for the actual trades and trade discussions dedicated to the specific strategies (SteadyOptions, Anchor Trades or Steady Condors). The limited time introductory price is $49/Quarter or $149/Year, for the first 50 members.
Contributed by George Yates
The contemporary financial market is distinguished by a number of variable factors, not least its unique and constantly evolving range of product and derivatives. From carbon units to the contract-based options market, modern-day traders have the opportunity to create an optimised portfolio that suits their knowledge base, experience and individual skill-sets.
The options market is particularly appealing in 2014, primarily because it offers a certain degree of flexibility to those who operate within it. In essence, it enables the option writer to sell a particular security or asset to a designated holder, under the terms of a contract that is valid for a specified period of time.
Selling naked put options is often (mistakenly) considered to be a 'very risky‘ proposition. Professional stockbrokers who spread that message are doing their customers a major disservice, because they are steering those customers away from a prudent, profitable investment method.
The only dangerous part of options trading is the risk-insensitive trader who buys and sells options with little or no understanding of just what can go wrong. The options, by themselves, are not dangerous tools.
The stock market is going through rough times. The major indexes are down 5-7% in the last couple weeks. At the same time, SteadyOptions model portfolio is up more than 30%. We are not trying to predict where the market is going.
Our latest earnings trades performed very well, including:
As many of our readers know, we have been playing earnings very successfully in the last 2 years using variety of strategies. We had some nice winners, but the trade I'm going to describe in this article is fairly unique. The reason is that it actually comes from one of our members.
On January 27, one of our long term members posted the following post:
One of our members posted a link to an excellent post from Mark Wolfinger. Mark responded to a question from one of his readers:
"For the past 2 years, I've been selling naked options (mainly puts, a few calls) to generate monthly income. My position returns just over 1% per month on average on the total account value".
After a year like 2013, many traders forgot the meaning of risk. They think they can just buy call options and/or sell puts and make outrageous digits returns every year. I suggest that everyone reads Mark's post, it's an excellent read with a lot of wisdom.
2013 was a strong year for Steady Condors even while our preferred underlying, RUT (Russell 2000), managed to hit all-time highs on almost a daily basis to the tune of nearly 40% for the year. As most of you know Steady Condors is a market neutral, income generating, manage by the Greeks strategy. Our trades are primarily risk managed variations of iron condors. If you haven’t already, please see our introduction to the strategy here. Non directional income trading wasn’t designed for relentless trends like 2013 provided and many of our competing services set record drawdowns. Our worst drawdown in 2013 was less than 3% (unrealized, realized was less than 1%), and our year end performance was 29.4%. We report performance net of commissions, on the whole account, and non-compounded. If you would have begun with a $40,000 account you would have ended with $51,760. Please be sure to read the final comments of the Steady Condors introduction to understand our transparency in reporting performance compared to other services.
Happy New Year everyone! Wishing you and your families a lot of health, prosperity and happiness in 2014.
2013 marks our second year as a public service. Overall, we had an excellent year. We closed 186 trades in 2013 which produced 91.7% ROI, based on fixed $1,000 allocation per trade (non-compounded) and 6 trades open. The winning ratio was pretty consistent around 60%. We had only two losing months in 2013. Check out the Performance page to see the full results. Please note that those results are based on real fills, not hypothetical performance.
We get a lot of questions regarding different options of using our services. We currently offer three alternatives:
- Self-managed accounts (SteadyOptions, Anchor Trades and Steady Condors).
- Auto-trading (coming soon, Steady Condors only).
- Managed accounts (Anchor Trades and Steady Condors).
I came across a great post from Ken Grant, a founder of Risk Resources LLC and the author of the book Trading Risk: Enhanced Profitability through Risk Control.
As the year comes to an end, many traders/investors like to take a hard look at what transpired in the 12 months past and set a course for the 12 month ahead of them. While many dream of catching the next TSLA or SCTY to do most of the heavy lifting in their portfolio, the truth is, to achieve consistent positive returns over a long period of time, your management of your Risk will likely play a larger roll than your stock picking.