SteadyOptions Trading Blog

A while ago I got an email from one of my Seeking Alpha readers. He told me that he is a big fan of my articles and asked how he can learn more. Then he said that he is new to trading options, he set aside a small amount of money in hopes of doubling it at least yearly. Did you get it? The guy admits to be new to options, but expects to double his account at least yearly?

April was an excellent month for SteadyOptions. We closed 16 trades in April, 13 winners and 3 losers. Total gain in April was $2,032 based on $1,000 allocation per trade. Assuming maximum of 6 trades open (the average number is lower), that's 33.9% non-compounded gain. Most Fund Managers don't make those returns in a full year.

Despite a healthy beat and dividend hike, shares of Apple (AAPL) are slightly down in after hours trading. They have lost now almost half of their value in the last 6 months. During 2012, I warned several times that Apple has gone up too far too fast. When the stock was going up almost every day for no visible reason, I asked a simple question: what do we know today that we didn't know a month ago?

When a fellow Seeking Alpha contributor Kevin O'Brian promised back in September to write an article "on Kim Klaiman's/Steady Options trading approach and why it doesn't work as advertised.", I was pretty excited. I have over 10 years of experience in the stock market. However, unlike Kevin who claims to "know basically all there is to know about options", I'm still learning. I will be learning as long as I breathe.

The following article was kindly provided to us by Adam Grunwerg at BinaryOptions.com. His site provides information about binary options trading, lessons and trader picks.

I just finished reading Option Strategies for Earnings Announcements book by Ping Zhou and John Shon. It introduces several ways to exploit option trading opportunities around earnings news. Chapter 8 is especially relevant to what we are doing at SteadyOptions.

It never stops to amaze me. I'm talking about the creativity of some options "guru" when it comes to presenting their track record. "Maximum profit potential", "Cumulative return", "90% winning ratio", "Annualized return" are just few of the tricks used in the industry to entice you into joining their website. This article describes some of the tricks used to make performance numbers much better than they are.

Happy New Year everyone! Wishing you and your families a lot of health and happiness in 2013. It's hard to believe that it has been a full year since SteadyOptions (SO) started as a public service. Overall, we had an excellent year. We did 271 trades which produced a $9,149 gain, based on fixed $1,000 allocation per trade (non-compounded). Assuming maximum of 6 trades open (the average number is much lower), that translates to 152.5% ROI.

To understand how the expiration date of an option influences the price, one first needs to understand how the price of an option is calculated in the first place. While the standard formula to calculate options prices, the Black-Scholes model, is very complex and requires advanced knowledge of statistics, for most traders it is sufficient to understand the basics involved.

November was a good month for SteadyOptions. We closed 35 options trades in November, 20 winners and 15 losers. Total gain in November was $1,000 based on $1,000 allocation per trade. Assuming maximum of 6 trades open (the average number is much lower), that’s 16.7% non-compounded gain.

NYSE Euronext U.S. Options Exchanges announced on November 12, 2012 that they are expanding the listing and trading of their Short Term Option Series program from a single week to five consecutive weeks.

There is a lot of confusion and misconception about debit and credit spreads. One of the most common misconceptions:

"One of the many drawbacks of a credit spread is that it will tie up so much capital."

Another misconseption:

“Selling credit spreads is like picking up pennies in front of a steam roller.”