- 07/15/15 GOOG calendar41.9%
- 07/14/15 SPX butterfly-13.4%
- 07/13/15 VIX calendar31.4%
- 07/06/15 SPY/TLT combo-8.2%
- 06/29/15 VIX calendar65.5%
- 06/25/15 SPX butterfly16.8%
- 06/23/15 MU straddle -3.2%
- 06/23/15 NKE straddle -1.8%
- 06/17/15 VIX calendar 1.5%
- 06/17/15 ORCL straddle 8.6%
- 06/16/15 FDX straddle -8.8%
- 06/15/15 NFLX calendar 21.4%
- 06/08/15 LULU calendar -2.1%
- 06/05/15 SPX butterfly 25.0%
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While most major indexes continue to straggle, SteadyOptions continues to deliver strong gains. SteadyOptions flagship service produced 121.5% ROI in First Half 2015, based on fixed $1,000 allocation per trade (non-compounded) and 6 trades open. This translated to 72.9% return on the whole account, based on 10% allocation per trade. The winning ratio was a remarkable 82%. Check out the Performance page to see the full results. Please note that those results are based on real fills, not hypothetical performance.
We are getting a lot of questions about our auto-trading program. Specifically, people want to know how it works, why we auto-trade some strategies and don't auto-trade others etc.
Auto-trading is basically money management, but vast majority of newsletters are not licensed to manage money. Would you give your hard earned money to amateurs? I assume most people would give a negative answer to that question - yet, by participating in Auto-trading program, this is exactly what they do. Is it stupidity or ignorance? You decide.
Since I started an options trading newsletter over 3 years ago, I met a lot of interesting people. I also learned a lot about human psychology.
I would like you to take a look at this article. It provides some good perspective about Wall Street and human emotions.
Today we closed our VIX calendar trade for $0.80 credit, after opening it just two weeks ago for $0.25 debit. What percentage gain did we make?
This is not a tricky question. Well, maybe a little bit. Any high school student would tell you that 0.80/0.25=220% gain. Correct?
Not so fast.
Trading options without an understanding of the Greeks is like flying a plane without the ability to read instruments. Unfortunately, many traders do not know how to read the Greeks when trading. This puts them at risk of a fatal error, much like a pilot would experience flying in bad weather without the benefit of a panel of instruments at his or her disposal.
In this article, I will try to describe how to use the options Greeks to your advantage.
First, a quick reminder for those less familiar with the Greeks.
Fama/French (2008): Momentum is "the center stage anomaly of recent years…an anomaly that is above suspicion…the premier market anomaly."
This article will share a simple example of the power of momentum, and more specifically, the power of combining relative strength momentum with absolute momentum. Absolute momentum is often referred to as trend following or time-series momentum. We highly recommend those who want to go further in depth to pick up Gary Antonacci’s book, DualMomentum Investing: An Innovative Strategy for Higher Returns with Lower Risk.
Whether you are new to trading or just looking for more consistency in your trading activities, this eBook will show you several ways that you can leverage a small account to your benefit. These techniques have helped me in the past, and today I want to give you a complimentary copy of this new must-read eBook, How to Trade a Small Account.
This week we closed our June trades with gains of 10.1% on margin, and 7.9% return on 20k unit. This makes the year to date non-compounded return 31.6% on a whole account (including commissions). If we reported returns like most other services do (Compounded ROI before commissions), we would report 48.9% gain.
As you noticed, we closed our June trades three weeks before expiration, to reduce the negative gamma risk. We recommend reading the Why You Should Not Ignore Negative Gamma article to understand the gamma risk. This is another thing we do differently from many other services. We open our trades early and close them early. We would typically open the trades 6-8 weeks before expiration and close them 2-3 weeks before expiration.
Options are similar to other financial security tools just like bonds, stocks, mutual funds, which can be purchased and sold at one’s convenience. Since these are less expensive than others, options have spread their roots across the market. These are ideal for short-term, as well as, long-term and are hence more profitable for users. Since individual investors have wider education resources, and multiple strategies can be implemented with options trading, these can be trusted for long-term use.
Some of the elements of successful trading include controlling risk, technical analysis, buy and sell indicators, and patterns. However, investors must bear certain steps in mind while spotting out potential trade including keeping a watch over the moving average, understanding overall patterns, and comprehending market trends.
All these short-term trading ideas and tricks are required to ensure success.
In one of my previous articles I described how we are going to play the current earnings season. I shared our plans to trade some of our favorite names (NFLX, GOOG, FFIV, CMG, FB, AMZN, MSFT, LNKD, TSLA and more). I expected this period to be good for SteadyOptions members.
I was wrong.
This earnings season was not good. It was outstanding! We closed CMG and AMZN trades for 20% gain, GOOG for 37% gain, TSLA for 34% gain, MSFT for 13% gain, among others. We also booked 22% gain in VIX calendar, 13% in RUT calendar and 17% in SPY/TLT combo. We closed 15 trades in April, 13 winners and only 2 losers, for an overall ROI of 30.0%! Our ROI in 2015 is an amazing 85.5%, in just 4 months.
In one of my previous articles, I described a hedge fund manager called Karen the "SuperTrader". She was featured few times by tastytrade as "one of the most successful and fascinating traders". Tom Sosnoff admitted that he "admires" her.
What Sosnoff fails to mention time after time is the amount of risk Karen is taking, compared to her returns. This is a critical issue that many traders don't fully understand.
To understand the real risk this lady is taking, I would like you to take a look at Victor Niederhoffer. This guy had one of the best track records in the hedge fund industry, compounding 30% gains for 20 years. Yet, he blew up spectacularly in 1997 and 2007. Not once but twice.
Digging through some old forum posts, I came across the following question from one of our members:
"My bear call spread is ITM now (RUT 855/865). I adjusted it by rolling it to the next strike (closed 855/865, opened 875/890). But I was wondering if this could be approached differently. This seems too good to be true, so I'm wondering if I'm missing something.
I could have done nothing for now, and if on October 18 (when my spread expires) RUT is still above $865, I could just roll to the SAME strike prices for the NEXT MONTH, for even more credit. And keep doing it forever, until RUT is below my short leg and it can be closed for profit or expires worthless. This seems too good to be true, but here's my logic:
NFLX announced earnings today after the close. Couple hours before the market close, I got a following trade alert from one of options sites I follow:
Trade: SELL -1 IRON CONDOR NFLX 100 APR 15 520/522.5/427.5/425 CALL/PUT @.91 LMT [TO OPEN/TO OPEN/TO OPEN/TO OPEN]
Trade Explanation: For the Volatility Advisory in NFLX, we are selling the Apr 427.5 puts and 520 calls and buy the Apr 425 puts and 522.5 calls for a net credit of $0.91 to open.
Underlying Price: $474.22
Our long term members know that we like to use few non-directional strategies to play earnings. There are few things we like about those strategies:
- They are predictable.
- They are repeatable.
- They are flexible.
- They can be used on the same stocks cycle after cycle.
Well, the Next Cycle is already here.
What would you say if someone told you that they consistently produce an average annual return of 3,000-4,000%? You would probably think it's too good to be true, right? That's what I thought when I reviewed a list of best performing investment newsletters reported by Pro-Trading-Profits, an independent advisory monitoring site. So I decided to check out one of the services reporting those remarkable returns.
Yesterday Mark Hulbert, whom I highly respect, published an article in MarketWatch called Investing guru predicts 12% rise in stocks over six months. Before I tell you why I think you should not trust any market forecasts from "investment gurus", I must say that I don't like the word guru in general. One of my favorite quotes is "Our world needs less gurus and more teachers. Gurus are about helping themselves become successful - teachers are about helping others become successful." - Joseph C. Kunz Jr.
While most major indexes continue to straggle, SteadyOptions continues to deliver strong gains. SteadyOptions flagship service produced 47.4% ROI in Q1 2015, based on fixed $1,000 allocation per trade (non-compounded) and 6 trades open. This translated to 28.4% return on the whole account, based on 10% allocation per trade. The winning ratio was a remarkable 82%. Check out the Performance page to see the full results. Please note that those results are based on real fills, not hypothetical performance.
By Mark D Wolfinger
Let’s begin with a basic fact: There are many methods for adjusting a position so that risk is reduced. Some are inexpensive, others cost more than most traders are willing to spend. Some are effective most of the time, but the protection offered is minimal. Others are so effective (alas, that happens rarely) that the gains an be spectacular. [Think of owning an extra put or two before the market opens down 20% one fine day]