One of our members posted a link to an excellentpostfrom Mark Wolfinger. Mark responded to a question from one of his readers: "For the past 2 years, I've been selling naked options (mainly puts, a few calls) to generate monthly income. My position returns just over 1% per month on average on the total account value".
I came across the following question on Quora: "If an event happened that would sizably move a stock price (ex. poor earnings) from its original point, wouldn’t buying both a put/call option on that price be a guaranteed win? No matter which way the stock price moves, I would make a large return (even if I lost money on the other option)."
Few days ago I came across an excellent article by Dan from Theta Trend. The article is called Awareness and Taking Losses and discusses some of the aspects of trading psychology, especially how traders react to their losses. I respect Dan very much and I found out that we share a lot in terms of trading philosophy.
When adopting an iron condor trading strategy, there are several decisions to make: Choose the underlying stock or index, Choose an expiration month, Choose strike prices, Decide how much cash you want to collect when opening the position (this will be your maximum profit for the trade). Read the stock option advice below to start learning the basics of trading iron condors.
Thirty years ago, legendary trading coach Dr. Van K. Tharp sat down with two top traders Ed Seykota and Tom Bassoand and discussed the importance of psychology in trading. They decided that the factors of trading could be broken down to three parts:
In our continuous effort to expand our strategies, few weeks ago I presented a new exciting strategy to SteadyOptions members. The strategy is buying a Reverse Iron Condor (RIC) before earnings on stock with history of big post-earnings moves. RIC benefits from a big post-earnings move, but requires less movement than a straddle or strangle.
2015 marks our fourth year as a public service. We had a fantastic year. We closed 129 trades in 2015 which 117.3% non-compounded gain on the whole account based on 10% allocation or 200.6% compounded gain. The winning ratio was pretty consistent around 75%. We had only one losing month in 2015.
Many people say that our performance is too good to be true. If you had a nickel for every time you heard some investing “guru” cherry-pick advice, you wouldn’t need to invest because you would have a fortune. SteadyOptions provides great options education, but is also striving to be one of the industry leaders in honesty and transparency.
This week we closed our December trades with gains of 6.7% on margin, and 5.1% return on 20k unit. This makes the 2105 year non-compounded return 46.7% on a whole account (including commissions). If we reported returns like most other services do (Compounded ROI before commissions), we would report 80.8% gain.
The option's delta is the rate of change of the price of the option with respect to its underlying price. The delta of an option ranges in value from 0 to 1 for calls (0 to -1 for puts) and reflects the increase or decrease in the price of the option in response to a 1 point movement of the underlying asset price. Far Out-of-The-Money options have delta values close to 0 while Deep-In-The-Money options have deltas that are close to 1.
Investopedia defines vega as: The measurement of an option's sensitivity to changes in the volatility of the underlying asset. Vega represents the amount that an option contract's price changes in reaction to a 1% change in the volatility of the underlying asset. Volatility measures the amount and speed at which price moves up and down, and is often based on changes in recent, historical prices in a trading instrument.
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