Ultimate Options Trading Strategies

I am on the hunt for a short volatility position for three main reasons. First, the market’s wild swings have, for the time being at least, diminished. Second, option activity has dried up as my options barometer continues to be stuck in the 4 – 6 range as traders are not making big bets in either direction.

By Jacob Mintz, 8 hours ago

For many US investors, the "base case" for equity investing is US large cap stocks, most commonly benchmarked as the S&P 500. You could absolutely do far worse than owning these 500 great US companies, and the weight of the evidence suggests that most actively managed mutual funds that benchmark themselves against the S&P 500 index have in fact done worse.

By Jesse, Monday at 09:43 PM

The use of moving average (MA) for predicting future price behavior must be undertaken cautiously. MA is a lagging indicator, so the question must be: Can a lagging indicator provide guidance for the future? Yes. The use of two MA lines and how they interact is a reliable form of reversal indicator.

By Michael C. Thomsett, Friday at 07:05 PM

Our members know that pre earnings straddles and calendars have been our bread and butter strategies in the recent years. We enter those trades when the prices are cheap compared to previous cycles. However, in the last few months of 2018, Implied Volatility exploded, making most of those trades too expensive.

By Kim, January 9

Shorting volatility in 2017 was easy money. In fact, it was easy money every year since 2010 when iPath S&P 500 VIX Short Term Futures TM ETN (NYSEARCA:VXX) has been created. Just go short VXX, buy puts or put debit spreads, and you would make money every year since 2010.

By Kim, January 8

This week Steady Options implemented the newest iteration of the Anchor trades – the Leveraged Anchor. This will now officially be tracked. We will also continue to track the Traditional Anchor as well. It is our belief that the Leveraged Anchor will perform better, on a risk adjusted basis than Anchor has, particularly on the upside of the trade.

By cwelsh, January 5

Making money in the stock market in 2017 was easy. Pick almost any stock or index. Buy calls. Sell put credit spreads. Almost any bullish or slightly bullish strategy would work. Everyone was a genius trader. Then came 2018. US stocks posted its worst year in a decade. Volatility exploded. 

By Kim, January 4

2018 marks our seventh year as a public service. It was an excellent and exciting year. We closed 124 winners out of 161 trades. Our model portfolio produced 129.5% compounded gain on the whole account based on 10% allocation per trade. The winning ratio was 77.0%. We had only one losing month in 2018. 

By Kim, December 30, 2018

Much of the discussion in finance is about "active" vs. "passive". Active management typically uses security selection and/or market timing to make portfolio management decisions. Passive management typically does not, instead, focusing on market risk premiums as the source of expected return. So which is better?

By Jesse, December 28, 2018

The covered call. That popular, strategy described by many as risk-free or at least so low-risk that you can’t go wrong. Or can you? A few dangers of the covered call should be described or, more accurately, a realistic point of view about this “sure thing” trade. A few points worth remembering:

By Michael C. Thomsett, December 28, 2018