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  4. Could you please notify me when you will reopen the steady options subscriptions many thanks hugo
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  6. The Unbelievable Pattern in Alphabet Stock Ahead of Earnings Date Published: 2017-06-23 Written by Ophir Gottlieb Lede There is an unbelievable pattern in Alphabet Inc (NASDAQ:GOOGL) stock ahead of earnings that has meant a wonderful return in the option market. Preface One of the least recognized yet most important phenomena surrounding this market run by the mega technology stocks is the amount of optimism that sets in the two weeks before an earnings announcement. That is, totally irrespective of whether the stocks have a history of beating earnings, in the two-weeks before of earnings, several of them tend to rally abruptly into the event. There has been a way to profit from this pattern without taking any actual earnings risk -- and it is simply staggering in Alphabet Inc (NASDAQ:GOOGL). This is how people profit from the option market -- it's attention to detail rather than hope. The Trade Before Earnings Let's look at a simple idea -- buying a monthly call option in Alphabet Inc two-weeks before earnings and selling the call before the earnings announcement. Here's the set-up in great clarity; again, note that the trade closes before earnings, so this trade does not make a bet on the result of the earnings result. Now, unlike many of our other set-ups, this is in fact a straight down the middle bullish bet -- this absolutely takes on directional stock risk, so let's be conscious of that before we see the results, because they are mind bending. Here are the results over the last two-years in Alphabet Inc: Go to the back-test link I know it seems absurd, but the trade has won 7 of the last 8 earnings pre-earnings cycles, for a 895% return. We can look at the last year as well: Go to the back-test link We're now looking at 377% returns on 4 winning trades and 0 losing trades. It's worth noting again that we are only talking about two-weeks of trading for each earnings release, so this 377% in just 8-weeks of total trading. For completeness, we include the results over the two most recent earnings events (6-months). Go to the back-test link That's 209% on 4-weeks of trading without once taking the risk of an actual earnings release. THE STOCK CHART We can look at Alphabet Inc's stock chart to see what's happening -- that is, to see the optimism (The blue "E" icons represent earnings). Note that the yellow arrows show the stock rise ahead of earnings, and we even box the times that the post earnings move was poor: What is so fascinating about this chart is that the stock does not necessarily follow through after earnings. We have boxed the times when GOOGL stock actually tanked after earnings -- but it has not upset the pattern of optimism for the next pre-earnings move. If you're wondering if this works for other mega tech names, the answer is yes. We will cover those for subscribers only in the coming days and combining them, that is, taking a position in more than one, alleviates the risk of a "coin flip" miss. That's the approach we want to take. Even further, all of the results we looked at were using a 50% stop loss -- that means if the calls that were purchased ever saw losses, we just closed the potion out and moved on. WHAT HAPPENED This is how people profit from the option market -- it's preparation, not luck. It's attention to detail rather than hope. To see how to do this for any stock and for any strategy, including covered calls, with just the click of a few buttons, we welcome you to watch this quick demonstration video: Tap Here to See the Tools at Work Thanks for reading. Risk Disclosure You should read the Characteristics and Risks of Standardized Options. Past performance is not an indication of future results. Trading futures and options involves the risk of loss. Please consider carefully whether futures or options are appropriate to your financial situation. Only risk capital should be used when trading futures or options. Investors could lose more than their initial investment. Past results are not necessarily indicative of future results. The risk of loss in trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition. The author has no position in Alphabet Inc (NASDAQ:GOOGL) as of this writing. Go to the back-test link
  7. Hi Kim when do you think any member openings will come for the steady options service, thanks larry

    1. Kim


      Not sure yet, probably next month.

  8. For ONE software to get live data from IB does anyone know if it works with just this bundle: U.S. Securities Snapshot & Futures Value Bundle for Non-Professionals. I just subscribed and tried and it seems not to work. Not sure if it's because IB takes a while to update my subscription or if this bundle's snapshot data does not work for ONE. Update: I had to subscribe to: US Equity and Options Add-On Streaming Bundle ($4.50) to get ONE working.
  9. yes, my account is under corporation , that explains the high fees
  10. Wow, that really is a pain. I guess the difference in data fees is somewhere in the ballpark of $400-$500. I don't know if this is an absolute SEC rule, or if other brokers would let it go. And, even it that were the case, it is going to be pretty difficult to find a more cost effective (commissions) broker than IB.
  11. True, as long as none of the accounts are limited partnerships or corporations, as I now see Kim has also mentioned. In my case I am managing an account owned by an LP and that pushes me into the higher fees, even though it is small and all family.
  12. I'm sure you are correct. None of my accounts are anything other than "Individual" accounts, so I guess that is why it worked out all these years. There was actually a moment, several years ago, when I opened an account (actually, it was just another account in my name for me to do different type of trading). When I opened it, unknowingly to me, the application somehow defaulted to have the customer (ME) pay some commission structure. Then I saw that I was suddenly being charged like $500/month for data fees, and found out that this was the reason. So, I said "no commissions from any of my accounts" and they changed it back to the fees that we are all familiar with.
  13. This is true, but as others mentioned, your account has to be a personal account. if it is under any kind of limited partnership or corporation, they automatically consider it "professional".
  14. I have been with IB since they first opened. I have an "Advisor/Client" arrangement with them, which also allows me to manage up to 15 accounts. There is a nuance here that can allow you to still be called "Non-Professional" (and not pay PRO fees) It is ONLY when you accept any form of payment, commission etc. from your client accounts that they are required to charge the Professional Fees. In my case, I manage a few friends/family accounts, but I do it because I am such a wonderful guy! So, I have always slipped under the "professional" fee requirements. As long as you call yourself "Non-Professional" in your basic profile, and do not accept any form of payment (through IB) from your clients, you can pay Non -PRO fees.
  15. @seotrader- Those are the "professional" fees. Even if you don't fit as a professional in the questionnaire you will be asked to pay these fees if you trade as a limited partnership. I manage a little money for a family limited partnership (LP) and IB says that's enough to trigger the higher fees. Since I have the LP account tied to my personal account for log in purposes it means my data subscriptions for my personal trading are also charged at the higher rates. I'm considering changes.
  16. It is because you are looking at the "Professional" package prices. There are regulations that require "Professional" traders to pay a different set of prices. You probably checked off "Professional" somewhere in your profile and that is why this list comes up. You have to go back into your profile and change your status to "Non-Professional"
  17. Not sure, you should ask them.
  18. Kim, any idea why I get these prices:
  19. @cuegis @Ophir Gottlieb excellent. Thank you!
  20. This is what I currently have: You might not need all of them. Just try and see what is missing, it will tell you if you try to get a quote for something you are not subscribed to.
  21. You can also create the exact same trade using puts and calls (Iron Butterfly). You are selling the ATM straddle, and buying whatever delta (ex. 20, 30 etc) strangle you want You don't need to make it from a "Custom Trade". You can easily create it from the basic program by choosing Iron Condor (wrong definition), and sell 50 delta calls and puts, and buy 20, or 30 delta puts and calls. The program had a bug that was not calculating this trade correctly. But, I wrote to Support, and the they found the problem and fixed it.
  22. @Ophir GottliebThe "Risked" value is way too high for your RHT example. Take a look at your 1-year backtest, it has the amount risked as $2905 for selling 5 put vertical credit spreads. Now, when you look into the trade details, the maximum width of the four credit spreads is 5. So, 500x5=2500 (which is less than the 2905 value displayed by the tool) - but you also have to subtract the credit received 73x5=365 which gives you a Risk value of 2500-365=2135. This is the first trade iteration in the 1-year backtest, the other three trades have risk values that are even lower.
  23. Timing Red Hat Options Around Earnings Date Published: 2017-06-21 Written by Ophir Gottlieb LEDE Red Hat Inc (NYSE:RHT) just beat earnings and the stock is ripping to new all-time highs, but the real opportunity with options wasn't earnings -- it's right after earnings. The Trade After Earnings Selling a put spread every month in a stock that is rising, in hindsight, obviously looks like a great idea. But, there is a lot of risk in that trade, namely, the risk of an abrupt stock drop and a market sell-off that takes all stocks with it. So, we want to reduce the risk while not affecting the returns. One of our go to trade set-ups starts by asking the question if trading every month is worth it -- is it profitable -- is it worth the risk? There's an action plan that measures this exactly, and the results are powerful not just for Red Hat Inc, but for Apple Inc (NASDAQ:AAPL), Facebook Inc (NASDAQ:FB) and Alphabet Inc (NASDAQ:GOOGL) as well. Let's test the idea of selling a put spread only in the month after earnings. Here's what we mean: Our idea here is that after earnings are reported, and after the stock does all of its gymnastics, up or down, that two-days following the earnings move and for the next month, the stock is then in a quiet period. If it gapped down -- that gap is over. If it beat earnings, the downside move is already likely muted. Here is the set-up: More explicitly, the rules are: Rules * Open short put spread 2-days after earnings. * Close short put spread 29-days later. * Use the option that is closest to but greater than 40-days away from expiration. And here are the results of implementing this much finer strategy: Tap Here to See the Actual Back-test We see a 29.4% winner that only traded the month following earnings and took no risk at all other times. The trade has won 7 of the last 8 times, or a 87.5% win-rate. Here is how the strategy has done over the last year: Back-test Link It turns out the return is really coming from a streak of wins in the last year. We see a 47.5% return, winning each of the last four earning cycles. That 47.5% return is based on just 4-months of trading, so it's more than 160% in annualized returns. Here's what we see over the last six-months: Back-test Link Now we see a 28.9% return over the last two earnings cycles, winning both times. As an aside, this logic of finding the month of lowest risk to sell put spreads also worked remarkably well and remarkably similarly across the board in Apple Inc, Facebook Inc and Alphabet Inc. Back-test Link WHAT HAPPENED This is it. This is just one of the ways people profit from the option market -- optimize returns and reduce risk. To see how to do this for any stock and for any strategy, including covered calls, with just the click of a few buttons, we welcome you to watch this quick demonstration video: Tap Here to See the Tools at Work Thanks for reading. Risk Disclosure You should read the Characteristics and Risks of Standardized Options. Past performance is not an indication of future results. Trading futures and options involves the risk of loss. Please consider carefully whether futures or options are appropriate to your financial situation. Only risk capital should be used when trading futures or options. Investors could lose more than their initial investment. Past results are not necessarily indicative of future results. The risk of loss in trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition. The author has no position in Red Hat Inc as of this writing. Back-test Link
  24. You definitely don't have to check on computer. If you follow appropriate forums/topics, you will get email notifications, that can be forwarded to your phone. There are also Twitter notifications.
  25. I did not see if there was a way to get trade alerts to cell phone so you don't have to keep checking on computer (don't have a smart phone)
  26. thank you for making this plain
  27. Sure. Here is an ATM butterfly: This is AMZN over the last 3-years
  28. Assignments occur in two basic varieties. First, on expiration Friday (or Thursday or Wednsday depending on the instrument your trading, but most commonly on Friday). If you have a position that is .01 in the money, or more, you WILL be assigned. For instance, if you have a 100 Call on stock XYZ that expires today, and XYZ closes (AFTER HOURS) at 100.01, you will find that you own, sometime Saturday, 100 shares of XYZ that you paid $100/share for. Now this option might have only cost you $100 or so. But all of a sudden, due to the inherent multiplier in options, you are now out of pocket $10,000.00. What if you're account only had $5,000.00 in it? Well, you are going to get both (a) a Regulation T Notice and (b) margin call from your broker. First thing Monday morning, your broker will automatically liquidate the position. What if there is adverse news over the weekend and the opening price is only $80? Well you just lost $2,000.0 -- in a $5,000.00 account. In other words, that $100 option just cost you 40% of your entire account. This happens. What if you had "hedged" the position though, and had a vertical call spread? For instance, you might have bought the $100/$105 spread on XYZ. Well if XYZ closes anywhere above $105 you are ok because BOTH positions will be auto-exercised. This SOMETIMES results in a margin call as well -- but don't worry. Option clear throughout the day on Saturday and your account will frequently show one position and the other not exercised yet. By Sunday morning it will be fixed. By way of example, I had a very large position (for me) (20 contracts) in the LNKD 92.5/95 vertical call before earnings. Well earnings did what they were supposed to and LNKD jumped to 104. Well Saturday morning, all of a sudden, I was SHORT 2000 shares of LNKD and had received roughly $190K in cash into my account. This sends off all kinds of margin alerts. I got an email, a call, and another call. Ignore them, they're idiots. The 92.5 side simply hadn't cleared yet. Three hours later the other option cleared, buying the shorts back at 92.5. Then Sunday morning, your account statement will reflect that all trades happened at the same time. HOWEVER, what if, on that 100/105 spread, XYZ closes at 103 on Friday? Well, guess what, you'll be assigned on the 100 position, the 105 will expire worthless, and now your back in margin call. MORAL OF THE STORY: DON'T EVER LET YOURSELF BE ASSIGNED ON A SPREAD THAT'S NOT FAR IN THE MONEY ON BOTH LEGS. What if, on Friday, the price of XYZ was at $106 at close? You better have closed the spread, because of after hours trading. The price of XYZ can move after hours -- but you can't get out of the options. So if the market closes at 106, and you say good, both legs will clear and I won't pay commissions (or pay less commissions) and get a huge tax break, you could be wrong, as in after hours the market might go back to $104.98. Then you're screwed, only the 100 option gets exercised and you go into margin call. I'm convinced when your near a strike the market makers manipulate the after hours markets to have this happen. Of course if you have enough cash in your account, you won't get margin called -- you're risk profile will just be largely out of whack. And this isn't to say you can't have a big benefit from this. My single most profitable trade EVER occurred on a spread that was $.50 above the line, I didn't close it, and then in after hours the price dropped. So I got assigned long on the lower strike. Well, that weekend there was big news involving the company and the price jumped 15% the next morning. In that case, here's what happens -- I own the 100 (long) /105 (short) vertical. After hours, the price is $104.92. Well that spread was worth $4.85 at close on 20 contracts, or $9,700. Well, Saturday I'm now the proud owner of 2,000 shares bought at $100.00 each, for a net cost of $200,000 -- oops. Margin call, broker call, broker email, ect. Well they inform me the trade will immediately close at open on Monday. Well the price jumped, and the position was closed, at $240,000.00. My original investment of $8,500.00, that I didn't want to close at $9,700.00, netted me $40,000.00, or roughly a 470% return. BUT, what if the price had gone down 20%? Well I would be owing my broker money and have completely blown out my account. If you have ANY questions on this, please let me know. Now SITUATION TWO -- and you will, sooner or later, encounter this. Let's say we have that same 100(long)/105 (short) spread on XYZ. Only we own the September spread and today (Friday) XYZ closes at 103. No bigger. UNLESS someone exercises their 100 spread. American style options can be exercised at anytime. Why would this happen with time value? Who knows, most likely someone needed to unwind a position, hedge something, take profits, any number of things realy. Well if you had a 10 contract position, on Saturday your account is now down $100,000.00 in cash and you won 1,000 shares of XYZ. You will again go into margin call. However, while this is a headache and you will have to deal with your broker, you don't need to panic because the position is still hedged. You can certainly still lose money -- but only up to the 105 line. What happens? Well your broker will force you to exit the position Monday morning at the open. If you BEG and wheedle, the broker might let you close the position yourself, so you can close at the mid point instead of just a market order. They should let you do this because the position is still hedged, but you are technically in a Reg T violation, so they won't let you hold it for long. Monday you'll have to sell your shares and buy back the short calls. This should be, at worst, a break even situation because of the time value left in the short calls. However, markets fluctuate and you might have to sell your stock at something like 104 and by the time you exit the short calls its up to 105 (or you get a bad fill price) so you give back some. When this happens, take your lumps and move on. I have this happen about once a quarter and my worse loss was 4%. There's nothing you can do to protect against this. You are hedged, and you won't blow your account out, but it does suck. I hope that clears some things. If not, please let us know. By Christopher B. Welsh Christopher B. Welsh is a SteadyOptions contributor. He is a licensed investment advisor in the State of Texas and is the president of a small investment firm, Lorintine Capital, LP which is a general partner of two separate private funds. He offers investment advice to his clients, both in the law practice and outside of it. Chris is an active litigator and assists his clients with all aspects of their business, from start-up through closing. Chris is managing the Anchor Trades portfolio.
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