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  1. Today
  2. Back-test link.
  3. Not sure, but I cannot duplicate your figures on ULTA when I plug in the numbers. Any ideas? Thank you.
  4. Yep, that sounds right.
  5. Yesterday
  6. PREFACEUlta Inc (NASDAQ:ULTA) earnings are due out tomorrow after the close. In the last 3-years, this time has meant an opportunity.Read: Ulta Earnings: An Opportunity (VIDEO) Here is the Back-test link.
  7. It's in private beta. We're still a week(ish) away, but I thought everyone would like to see the progress.
  8. Correct. Still in private beta.
  9. You will have the ability to do whatever you like. I was just showing one variant of nearly infinite. I think everyone will be more than pleased, and in fact, excited. We'll do our best.
  10. Same question from me. I logged out, then logged back in. I thought that would open the new program, but it didn't. So, I'm assuming you are referring to a beta version that is not yet available?
  11. @Ophir Gottlieb Is this out for all users or just beta testers? I'm not seeing the Custom Strategy option when I log in.
  12. @Ophir GottliebFor the SO pre-earnings calendars we are always short the options expiring at the end of earnings week, so wouldn't we specify Rollover=7 on the short leg (and Rollover=30 on the long leg since we use the nearest monthly series as the long leg)???
  13. @Kim We're up in beta with custom strategies. Here is the pre-earnings calendar straddle. First, create the strategy and save it: Then define your earnings timing: And test multiple symbols at once: Here is HD, BWLD and FB For all Steady Options members, you can sign up on promotion here: https://cmlviz.com/register/cml-trademachine-49-mo-promotion-so/
  14. Last week
  15. How to Profit from Visa, Appl, Goldman Sachs Options Right After Earnings Date Published: 2017-05-23 Written and recorded by Ophir Gottlieb This article can be seen as a video, below. As a Steady Options member, you have promotional pricing for the Back-tester here: https://cmlviz.com/register/cml-trademachine-49-mo-promotion-so/
  16. We have seen how this general strategy, with the same post earnings restraints, has done very well with many stocks. In your testing , was there something that really stood out from the rest, that was specific to Visa? I don't have answer to this but, there are many times where the immediate post earnings reaction, is a large initial move down. Then, as you point out, after 1-2 days when things settle down, selling a put spread will provide you with the best of both worlds. (i.e. you avoid have a position for the down move , plus you also avoid the IV collapse). But, what about in the identical, but opposite, post earnings reaction, where the stock's initial move is a large up move for the first day or 2. Could we isolate those cases to see if doing the reverse (selling call spreads) would have similar results?
  17. How to Profit from Visa Inc Options Right After Earnings Date Published: 2017-05-23 Written by Ophir Gottlieb LEDE While Visa Inc (NYSE:V) just broke another all-time high in stock price, one option trade after earnings has been a consistent winner, has a much shorter holding period, and has vastly outperformed the stock. It takes no earnings risk, little stock direction risk, and over the last year has never lost while returning over 100% annualized returns. The Trade After Earnings While most of the focus is on the actual earnings move for a stock, that's the distraction when it comes to the option market. For Visa Inc, irrespective of whether the earnings move was up or down, if we waited two-days after the stock move from earnings, and then sold an at the money put spread, the results were very strong. We can examine this, objectively, with a custom option back-test. Here is our earnings set-up: Rules * Open short put spread 2 day after earnings * Close short put spread 29 days later * Use the option that is closest to but greater than 30-days away from expiration Here are the results over the last year -- while also comparing this strategy to the less refined idea of just selling the put spread every month, while also avoiding earnings. Back-test Link Focusing in just the month after earnings, we see a 79.1% return over a total of 12 earnings releases. But, doing this strategy all year returned just 57.7%. For each approach, no earnings risk was taken -- this is not a coin flip over earnings. But there's more here. For clarity, this is how the two strategies differ: By only trading the month after earnings, we are looking at a strategy that only had open positions for 12 full months (one-month per earnings period, 4 earnings releases per year). The other approach did in fact take full 3-years to realize and that means it tied up the margin for much longer. The Logic The logic behind this trade follows a narrative that even after a bad earnings release, if we wait two days after, we find the stock at a point of equilibrium. If it gapped down -- that gap is over. If it beat earnings, the downside move is already likely muted. Here's how this strategy has done over the last year, again compared side-by-side to the short put strategy that traded all months: Back-test Link The "single-month" approach returned 35.6% over the last four earnings cycles, but since this is a total of a four-month holding period, that 35.6% is actually over 105% annualized. The approach that held during all months returned just 10.3%, and that is the annual return -- it took a full year to realize. During the last year, the stock is up 21.8%. WHAT HAPPENED There are patterns to stock behaviors before and after earnings and those patterns reveal opportunities in the option market, without taking the actual risk of earnings. You can find them, stock by stock, Apple, Google, Netflix and of course Visa Inc are just a handful of examples. There has been edge here with this strategy. To see how to do this for any stock and for any strategy 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 Visa Inc as of this writing. Back-test Link
  18. Oy! Guess I missed that one!
  19. I think he/she was talking about CML and SO.
  20. I don't mean to be pushy but....how would you like to share those 2 great sources? Unless they are proprietary.
  21. Ok, I just bought a membership in CML and am doing the trial with SO. Looks like I've found 2 great sources for back tested options trading ideas. Thanks to all.
  22. The following infographic expose 5 common myths about options trading.
  23. Mark, You are back! Just today I picked up your Rookies books and re-read the chapters on diagonals (for about the 20th time). When you wrote the second edition you added a chapter for calendars and also some additional material on diagonals. With regard to volatility (IV) and also VIX would you say that a trade consideration should be low put volatility for entry and bank on the high theta for the short side?
  24. Here it is -- a portfolio of FAANG stocks using pre-earnings trading. A 3:30 video that is staggering and includes some robustness testing. Reminder that you can sign up for Trade Machine as a Steady Options member here: https://cmlviz.com/register/cml-trademachine-49-mo-promotion-so/
  25. Here it is -- a portfolio of FAANG stocks using pre-earnings trading. A 3:30 video that is staggering and includes some robustness testing. Reminder that you can sign up for Trade Machine as a Steady Options member here: https://cmlviz.com/register/cml-trademachine-49-mo-promotion-so/ https://youtu.be/RghygABxyKY
  26. I was taught that one of the assumptions used in this strategy is that for the most part, the market has all ready priced the option correctly for the upcoming news so by allowing for some price movement within your strangle, this is more of a volatility play than a price play. Mark's response: 1) To me they are the same, with the straddle being a subset of the strangle In other words, a straddle is merely a strangle when the strikes and expiration dates are the same. I prefer the strangle because it allows the trader to choose call and put strike prices independently, rather than being 'forced' to choose the same strike. I prefer to sell OTM calls and puts – and that's not possible with a straddle. As far as unlimited risk is concerned, that's a decision for each trader. I prefer the smaller reward and increased safety of selling credit spreads (an iron condor position), but that is not relevant to today's post. 2) A clarification. In is not 'volatility' that incurs a large decrease after the news is released. Instead it is the implied volatility of the options. I'm fairly certain that is what you meant to say. 3) Your earnings plays are far riskier than you currently believe them to be. These are not horrible trades, but neither are they as simple as you make them out to be. 4) I must disagree with whomever it was who told you that "the market has priced the option correctly for the upcoming news." The market has made an estimate of how much the stock price is likely to move. Note that this move may be either higher or lower ad that this difference is ignored when the size of the move is estimated. There is no formal prediction of move size. There is nothing that says the stock will move 6.35 points. What happens is the implied volatility rises as longs as more and more buyers send orders to purchase options. And it makes no difference if they are calls or puts. At some point option prices stabilize (or the market closes for the day) and a 'final' implied volatility can be measured. From the IV, the 'anticipated move' for the underlying is determined. AsI said, it's not as is everyone agreed on how much the stock will move. I hope you understand that when the news is released, there is very little chance that the predicted move is the correct move. Many times the move is far less than expected. That's the reason why selling options prior to earnings can be very profitable. The IV collapses because another substantial price change is NOT expected and there is no reason to pay a high IV to buy either calls or puts. However, if you chose to sell an option that was not very far out of the money (OTM), and if the stock moves far enough, then the IV decrease doesn't do a whole lot of good. Sure you gain as IV plunges, but you can easily incur a substantial loss when the short option has moved significantly into the money. Also remember that part of the time thet stock price gaps by far more than expected. In that scenario, a higher quantity of formerly OTM options are now ITM. Thus, large losses are not only possible, but they are more frequent that you realize. Apparently your trades have worked out well (so far). Think about this: If those option buyers did not profit often enough to encourage them to pay 'high' prices for the options they buy, they would have stopped buying them long ago. The truth is that these option buyers collect often enough to keep them coming back for more. 5) That means you must be selective in which options you sell into earnings news. This is especially true when you elect to sell naked options. You cannot options on every stock, hoping that any random play will work. This is a high risk/high reward game. It's okay to participate, but please be aware of what you are doing and the risk involved.
  27. I have been advised by our tech support that at this point, the best solution is changing your forum account email address. Many ISP providers have very aggressive spam filter settings, and our emails still bounce. I would highly recommend using gmail or yahoo for your forum account. They are so much better and more flexible. Thank you for your understanding.
  28. Are you still on board with the Trade Machine?  I signed up but not sure when I would use it outside the trade alerts I get already with SO.  It's not expensive, but maybe I don't need it....

    1. Kim

      Kim

      Yes. And it will be even more valuable when they add calendars.

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