SteadyOptions Trading Blog

What makes a forex trader profitable? Looking at a wide array of real data, four patterns are found. Timing is critical. The best time to trade is not necessarily what you thought it would be, and it certainly depends on the trading style.

Simplification: We can all better understand options trading by removing the complexity so often seen in articles. One of the best ways to understand the profit potential and risk levels of any options strategy is through diagrams and a demonstration of the formula.

“Don’t tell me what you think, tell me what you own.” I’ve written articles and posts on this website about a wide variety of ideas and strategies, so in this article I’ll share my thought process of how I’ve put it all together for my own personal situation. My ability, willingness, and need to take risk is likely different than yours, possibly a lot different, so this should not be considered investment advice or recommendations.

One of the most common questions asked about the Anchor and Leveraged Anchor strategies relates to “what’s the most I can lose on the trade.”  Fortunately, that’s a fairly easy number to calculate for any one given time on a known portfolio.  A yearlong dynamic calculation is a bit more difficult. 

This is the last in a series of articles about how dividends affect option value and volatility. In picking stocks for options trading, what are your criteria? Analysis of dividends, debt and net return – all fundamental tests – help identify strong value companies (and lower-volatility options) versus weak, high-risk stocks.

As a financial advisor, investment advisor, hedge fund manager, model developer, and newsletter signal provider for over a decade now, I've had the opportunity to see quite a bit of human nature in action.

Our Steady Momentum PutWrite strategy attempts to outperform the CBOE PUT index, which writes cash secured puts on the S&P 500. An investable version of this strategy can be purchased with the ETF PUTW. The historical data for PUT extends back more than 30 years, highlighting how writing puts can be an attractive strategy.

The theory of dividends and underlying stock prices is simple: The underlying price is expected to decline on ex-dividend date, by the amount of the dividend. As a result, option prices should decline as well. Under this theory, calls for higher dividend stocks should be valued lower and puts should be valued higher.

Many traders or future traders shop for a broker to work with and find endless reviews on the web, and not all are genuine. Here are 5 ways to separate the good from the bad. There are lots of sites that specialize in forex broker reviews and lots of talk about brokers in various forums.

Dividends are almost universally viewed as positive aspects of stock selection and options trading. The higher the dividend yield, the more positive. But does this ignore some dangers in dividend trends? In fact, there are three ways in which dividends can mislead traders and create positive impressions when in fact, the news is negative.

Steady Options has received numerous inquires into how dividends impact options, option prices, and the owners or option contracts. The impact of dividends should be understood by any option contract trader.  Fortunately, the rules for option contracts and dividends are clear and straightforward. 

There are jokes within the financial industry that "nobody has ever seen a bad backtest" and that "the worst 10 years of your backtest are the next 10 years". There certainly are bad backtests, but nobody ever markets them. They just get thrown in the trash. Even academics can fall prey to this.