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SteadyOptions 2017 - Year In Review

2017 marks our sixth year as a public service. It was an excellent and exciting year. We closed 113 winners out of 138 trades. Our model portfolio produced 169.1% compounded gain on the whole account based on 10% allocation. The winning ratio was 81.9%. 2017 was our first year ever without a single monthly decline. 

Calculating ROI in Options Trading

Our readers know that our returns have been tracked by Pro-Trading-Profits, an independent third party website that tracks performance of hundreds investment newsletters. They provided an excellent explanation how to analyze and compare performance of different trading systems. 

Put Permanent Portfolio

Harry Browne popularized the concept of the "Permanent Portfolio" decades ago by recommending an asset allocation of 25% stocks, 25% bonds, 25% gold, and 25% cash. In the 90's, the concept of "risk parity" also became popular with writings by Cliff Asness of AQR Capital.

Does HFT Harm Individual Investors?

What is the overall impact of High Frequency Trading (HFT)? Some traders believe that the use of algorithms in super-fast and powerful computers allows large hedge funds and other institutions to beat the market, implying that because these big traders can out-perform individuals, profits are unfairly gained. But is it true?

Defining the Anchor Strategy

Lorintine Capital and Steady Options have been trading the Anchor strategy for a number of years. During this time Anchor has evolved as we have learned more, in no short part due to the Steady Option’s members continuing questioning of the strategy, insights they provide, and a large group of individuals seeking to improve the strategy’s efficiency. 

The Life Of An Options Contract

You may be asking yourself why am I reading this basic article about options trading? Well, if you’re anything like me, I didn’t learn options trading via the fundamentals.  Rather, I found a few strategies that made sense to me and started trading, without much regard to the underlying workings and details.

Volatility Trends in the DJIA

Options traders focus, often too much, on implied volatility to estimate the next change in option valuation. Is this always a wise policy? Options are derived from volatility in the underlying security (thus the term derivatives), a good question is: Why not focus on volatility trends in the underlying (historical volatility) to judge likely future valuation trends in options?

Trend Following: An 88 Year look at S&P 500

Many investors have become interested in trend following strategies in recent years due to the scars of living through two major bear markets since 2000. In my firm, we also believe in trend following as a sustainable method for managing the downside risk of investing in risky assets like equity index funds and ETF's. 

Leverage With A Poor Man’s Covered Call

Diversification can be an issue for traders with smaller account sizes. It can be incredible difficult to trade covered calls and create a diversified portfolio. For example, an investor with a $25,000 account would use up over half his capital doing one covered call on AAPL stock.

 

Are you a Hedger Or a Speculator?

Many options traders seem to have a problem defining themselves. Repeatedly, we see traders describe themselves as conservative, using options primarily to hedge market risk. But … are they staying true to this definition.

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