SteadyOptions Trading Blog

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.”

Options trading is becoming more and more popular every year. The options become more liquid and more traders use them for hedging, speculation, income etc. Weekly options, first introduced by CBOE in October 2005, are one-week options as opposed to traditional options that have a life of months or years before expiration.

Google (GOOG) reported earnings on Thursday, July 19, 2012, after the market close. My favorite way to play Google earnings is by placing a reverse iron condor few days before earnings and selling it before the announcement when IV (Implied Volatility) spikes. This cycle the strategy played out especially well for Google.

As we all know, risk and reward are directly related in trading. You must take more risk to get a larger return on the trade. There is a third parameter, which is related to a potential return: probability of success. A higher probability of success translates to lower potential return and vice versa.

There are many ways to play earnings. Some people prefer to play them directionally, buying calls or puts. I think that earnings are unpredictable; hence I prefer to play them non-directionally. I decided to check how some of the popular high flying stocks performed this earnings cycle.

As a non-directional trader, I'm trying not to be dependent on the market direction. My goal is to make money in any market. To achieve that goal, I need to constantly balance my portfolio in terms of direction and volatility.

When playing the pre-earnings trades, it is very important not to overpay in order to increase our odds. Determining what is a good price is not easy. Lets try to see what are the factors impacting our decision.

Apple (AAPL) closed April 16 at $580.13, down 10% from its all-time high of $644. It is now down for five consecutive days, something that hasn't happened since last October. What is behind the selloff and what does it mean for the stock?

Apple (AAPL) reports earnings on Tuesday, April 24, 2012, after the market close. There are many ways to play earnings. Some people would bet on the direction of the stock movement after the announcement and then buy or short the stock. Others will buy call or put options.

Last week, I presented 5 ways to play Google's (GOOG) earnings non-directionally. The stock moved 4.06% after the announcement, much less than expected. I would like to do some analysis how those trades turned out and what we can learn from them.