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SteadyOptions 2016 - Year In Review

2016 marks our firth year as a public service. We had a good year overall. We closed 127 trades in 2016. The model portfolio produced 40.1% compounded gain on the whole account based on 10% allocation. The winning ratio was pretty consistent around 66%. We had three losing months in 2016.

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. 

Reverse Iron Condor Strategy

The Reverse Iron Condor (RIC) is a limited risk, limited profit trading strategy that is designed to earn a profit when the underlying stock price makes a sharp move in either direction. The RIC Spread is where you buy an Iron Condor Spread from someone who is betting on the underlying stock staying stagnant.

Pre-earnings Momentum Trade in Netflix

Netflix has earnings due out Monday, October 16th, after the market closes. Seven calendar days before then would be 10-9-2017. Coming off of a nice win in THO, now it's time to look at the company's remarkable history of momentum into earnings events and how it compares to FAANG more broadly. 

Microsoft Pre-earnings Momentum Trade

Microsoft has earnings due out on October 26th, 2017, after the market close, according to Wall Street Horizon. 7-days before then would be October 19th, 2017. Microsoft is the forgotten mega tech -- the third largest company in the world behind Apple and Alphabet, but it doesn't fall into any fun Acronyms, like FANG, or FAANG. 

Option Trade After Earnings in AutoZone

AutoZone Inc (NYSE:AZO) has earnings due out tomorrow, 9-19-2017 before the market opens and we can look at a slightly advanced option trade that starts two calendar days after AZO earnings (9-21-2017) and lasts for the 19 calendar days to follow, that has been a winner for the last 3 years. 

Why Winning Ratio Means Nothing

A lot of options traders consider 90% probability strategies a Holy Grail of trading. After all, if you can win 90% of the time, you should be able to grow your account very quickly, right? Well, not only this is not true, but in fact, winning ratio alone tells you NOTHING about your chances to be profitable. 

Post Earnings Option Trade in Facebook

For Facebook Inc, irrespective of whether the earnings move was up or down, if we waited one-day, and then sold an one-week at out of the money iron condor (using weekly options), the results were quite strong. This trade opens two calendar after earnings to try to let the stock find equilibrium after the earnings announcement. 

The Incredible Option Trade in VXX

The iPath S&P 500 VIX Short Term Futures TM ETN (NYSEARCA:VXX) is referred to as "the VXX.". The obligation of the VXX is to match the performance of the S&P 500 VIX Short-Term Futures Index Total Return and that is a strategy index which maintains positions in the front two-month Volatility Index (VIX) futures contracts. 

The Art of Trading Decisions

One of my basic tenets in teaching people how to trade options is that rules and guidelines should not be written in stone and that there are valid reasons for accepting or rejecting some of them. When I offer a rationale or explanation or suggest course of action, it is because I have found that this specific suggestion has worked best for me.

Early Exercise: Call Options

How would a trader like you decide to do early exercise? Say you bought calls when they were trading in the 1.0 -> 2.5 range, now underlying has risen so that calls trade bid-ask at 4.0 / 4.8 and there is strong possibility of it going higher. Also assume in another case that they trade in the 6.0 to 7.0 range.

3 Reasons to Own PG for the Next 50 Years

Large-cap, blue-chip companies are not exactly the hottest commodities on the current market. But one of them has been rewarding income investors for decades and will likely continue to do so. I’m talking about Procter & Gamble Co (NYSE:PG), a multinational consumer goods company headquartered in Cincinnati, Ohio.

The Power of Selling Options on Futures

It’s no secret that selling far out of the money options, as opposed to buying them, is a trading strategy with a high probability of success. Low-delta options have a proclivity to expire worthless. The dramatic downward moves required to make low-delta options profitable don’t happen all of the time.