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We’ve all been there… researching options strategies and unable to find the answers we’re looking for. SteadyOptions has your solution.

Kim

Frequently Asked Questions

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SteadyOptions FAQs

 

What is SteadyOptions?

SteadyOptions is a Premium Options Education service. We offer a combination of a high quality education and actionable trade ideas. My goal is to share my experience and to help you to become a better trader. The trading alerts are based on my real trades that I'm sharing with subscribers in real time. SteadyOptions is not a trade recommendation service and I am not a financial adviser. I see my first mission to educate you about options. Ask questions. Concentrate on your education, not on a short term performance. Please read  Welcome to SteadyOptions post for more details.

How do you recommend to start using the SteadyOptions?
If you are new to options or to those strategies, my first recommendation would be: start with paper trading. Then start with small positions and increase the allocation gradually as you gain more confidence.


How much can I expect to make with your service?
It is important to set realistic expectations, but it's ultimately up to you. I never make any promises or guarantees. You can visit the Performance page to get an idea about our results. 

What is your trading style?
I trade a variety of non-directional strategies. I'm a big fan of the "slow and steady" approach. I aim for many singles instead of few homeruns. My first goal is capital preservation instead of doubling your account. Think about the risk first. If you take care of the risk, the profits will come.

 

How do I get the trade alerts?
I will post a topic in the SteadyOptions Trades forum (members only) when I enter or exit a trade. If you want to get notifications about the trades, you should follow this forum (by clicking "Follow this forum" button on the right upper corner of the forum page). If you follow this forum, you will receive an email when a new topic (trade) is posted. If you want to follow that trade, you will have to follow that specific topic in order to get notifications about the new posts in that topic. To get notifications from any forum, you need to follow that forum and then each topic individually. Read more in here. All open trades are listed under 
SO Open Trades. I also send the alerts on Twitter, at protected account SteadyOptions. In addition, there is also an option to "follow" a member to get his content.

 

When the trade alerts are sent?

All trade alerts are sent during market hours. You don't need to be glued to the computer all day, but you should be able to place trades during the market hours. 

 

Do I have to wait for your trade alert?
No. In the Earnings Trades Discussions forum (members only), I will start a topic to discuss every trade. I provide my entry and exit guidelines and profit targets. I strongly recommend that you follow that forum to see the rationale behind the trades and also to get some heads up before I actually make the trade. I encourage members to set their own profit targets and follow them.

 

Which strategies do you use?
We use a mix of non-directional strategies (members only topic): earnings plays, Iron Condors, Calendar spreads etc. The focus will be on pre-earnings plays. The strategy is based on my Seeking Alpha articles Exploiting Earnings Associated Rising Volatility and How To Rent Your Options For Free. I encourage you to read those articles before trading any earnings related trades. This strategy is based on aiming for consistent and steady gains with holding period of 2-5 days. We will always close those trades before the earnings announcement to avoid the IV collapse.

How many trades do you typically have and how long do you hold them?
I usually have 2-4 earnings plays with holding period of 2-7 days. In addition, I might have 2-3 theta positive trades like Iron Condor, butterfly and/or calendar spread, with holding period of 3-4 weeks. From time to time, we also trade other instruments, like GLD, VIX, VXX, SPY etc. to take advantage of special situations.

 

How do you calculate your performance?
I use a model portfolio of $10,000 and allocate $1,000 (10%) per trade. Since I have maximum of six trades at any given time (usually less), this method reflects the growth of the entire account even though I don't have more than 60% of the account on risk.
 Please remember that posted returns exclude commissions.

 

How does the model portfolio return compare to the ROI?
The ROI (Return On Investment) is much higher than the portfolio return since I have a high cash balance all the time. You can be more aggressive and allocate 15% per trade to enhance the performance. However, I prefer to be conservative and present conservative numbers.

 

What is the minimum account size to trade those strategies?

I recommend at least $5,000 account to start with, $10,000 is better. I do NOT recommend trading accounts larger than $100,000 due to potential liquidity issues.

 

Are commissions important?

Commissions are important for any strategy, and they are especially critical when trading multi-leg options strategies. If you are paying more than 1.0-1.5% commissions (as percentage of the trade value), it is time to change broker. See more details here.

 

I missed the trade alert and the price is now higher - should I pay it or wait?
I recommend to be patient and let the price "come to you". Most of the time, you should be able to get a similar fill as I do. In fact, in many cases, by being patient members could achieve better fills. As a general guideline, if the stock is still near the price where I entered and the trade price runs and then comes back, I still consider it a valid trade.

How much should I allocate to any given trade?
It is up to you and based on your risk tolerance. I discussed the importance of position sizing here 
(members only topic). Since most of the trades have a low risk (typical loss is in the 10-15% range), it is possible to allocate 10% per trade and still risk only small percentage of the account.

Why you don't offer auto-trading for SteadyOptions service?
SteadyOptions is an educational resource. I want my members to be in a full control of their trading. 
In addition, SEC considers newsletters that engage in auto-trading to be investment advisers, and I am not licensed to be an investment adviser. So most newsletter that engage in auto-trading are breaking the law and are exposed to lawsuits like this one. You can read more details here.

 

I lost money during my trial period with your service. Why should I continue?
The purpose of the trial period is for you to see if you like the service in general, the community and our style of trading. We are here for the long run, and hope that you are too. 

 

When you issue a trade alert, wouldn't all our orders affect the prices?
It is important to use limit orders and not to chase. However, since spreads are already hedged or partially hedged, they are always easier for the market makers to handle, and they prefer those trades to single orders - there is less urgency for them to 'get flat'. The market makers must trade to make money, and no reasonable order should be difficult to fill. However, I also limit the membership to ensure the best fills for our members.

 

I work full time, will I be able to benefit from the service?
We have a lot of members who work full time. You don't need to be glued to the computer all day long, but you do need to have access to the trading platform during market hours. Usually it is okay to place the trade within few hours after the trade alert. We discussed here 
(members only topic) some tips that can benefit the working members. I also issue a Daily update (members only topic) every morning with the action plan for the upcoming day, I highly recommend that you follow the topic to get an update every morning.

 

Please refer to General FAQs for questions relevant to all services.

 

Why not Start Your Free Trial?

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Anchor Trades FAQs

 

What is Anchor Trades?

We would suggest starting with this Introductory post describing the strategy. Then read some of the discussions on the Discussion forum.

 

Why was Anchor Trades spun off from Steady Options?

After much discussion, Kim and I elected to spin Anchor Trades off of Steady Options because the two strategies are so completely fundamentally different in how they are executed and the purpose behind them. Steady Options largely advocates income producing option strategies around earnings events and other non-directional strategies. 

 

Whereas Anchor Trades primary purpose is the preservation of capital through long term hedging, without sacrificing principal. It is a year to year portfolio management style. You will not be making four to ten trades a week, you will not generate steady income, and you will not trade dozens upon dozens of instruments.  However, you will have a strategy under your belt that is designed to preserve your capital in all markets -- bull, bear, and neutral.  As discussed more in the Anchor Trade Strategy Post, I personally believe, and back testing has proven, if you don't lose money in years when the markets go down, and make money in all other markets, over any extended period of time, your performance should obliterate market returns.

 

Because these two strategies vary so much, and target very different purposes and investment strategies, Anchor Trades was separated.

 

How do I use Anchor Trades?

The exact same way you would use Steady Options or the majority of other educational and/or newsletter services.  I would highly suggest reading the introductory threads, asking any questions you may have, and then following the trades for a period of a few months until you are comfortable enough with them prior to doing so in your own account. You may also paper trade them for any length of time you desire.

 

How much can I make using the Anchor Trading strategy?

Over time (a period of several years), you can expect returns well above the market average.  In bull markets, if the strategy performs as anticipated, you should lag slightly behind the S&P 500.  In neutral markets, you likewise should be neutral, or slightly outperform the S&P 500.  However, in bear markets, you should significantly outperform the S&P 500. 

 

For example, in the 2008 bear market, the S&P 500 lost over 38%.  However, had you been using the Anchor strategy, you would have returned over 29% -- outperforming the market by almost 60%.

 

How do you calculate your performance?

I compare performance against the S&P 500 monthly, annually, and over the life of the strategy.  Each month a post will be made comparing the returns of the Anchor Strategy as compared to the S&P 500, as well as an open discussion on the results. Please note that posted results include commissions.

 

What is the minimum account size for this strategy?

With the recent advent of mini-options on SPY, any account with over $5,000 can implement this strategy.  HOWEVER, be sure to calculate commissions when implementing.  If you implement the strategy with the mini-options, there is a very real chance your commissions may eat up any gains you have, if not more.  Ensure that your broker has a favorable commission structure for the trading of min-options.

 

The trade alerts will be posted with regular SPY options.  To implement the strategy, exactly as presented in the weekly trades, the minimum size account recommended is $48,000.  Again though, this may be implemented with mini-options in smaller accounts.

 

Can I use this strategy in an IRA?

It depends on your IRA custodian.  Most IRA custodians will not allow short selling of stock or options, regardless if they are covered and/or hedged.  However, there is no express rule against it so some do.  If you want to implement this in an IRA, be sure your custodian permits the selling of puts against long term puts (calendar spreads).

 

What if I want you to handle these trades for me?

If you are an accredited investor or qualified client, I would suggests investing in the Anchor Fund, a hedge fund I manage.  There are certain advantages to having invested in a large fund that implements this strategy over trading in a private, smaller, account.  For one, selling far out of the money covered calls can be utilized to extract one to two extra percentage points of gain per year.  You can also own a greater diversification of equities, further isolating individual security risk.

 

If you are a qualified client or accredited investor, and would like to discuss an investment in the Anchor Fund, please feel free to contact me at your convenience. 

 

I work full time, can I benefit from this service?

YES!  This strategy is specifically oriented around low management and time commitment.  As there is a long term hedge in place, if the market absolutely tanks one week -- well that's a good thing.  There is only one required trade per week (rolling of the short puts). 

 

There will be other adjustments made (rolling the longs to lock in gains, adjusting the weekly shorts to extra more premium, etc.), but none of these trades are mandatory, they just help to increase performance.

 

How do commissions impact this trading strategy?

As in any trade, the cost of commissions has to be considered.  However, the total cost of commissions for running the Anchor strategy for a year should run well less than one percent (1%) of the portfolio value.  Most members use either TDAmeritrade's Think or Swim platform ("TOS") or Interactive Brokers (IB), but by all means choose the broker you feel best suits your trading style and needs -- there are dozens out there. 

 

There is a specific post on commissions that details how to account for the cost of commissions annually in preparing the strategy for your personal use.

 

How can I contact you?

The best way to contact me directly is a PM through this website. You may also post in the relevant forum or email me directly at cbwelsh79@gmail.com.

 

Can I share this information with my family and friends?

Please note that all of this information is copyrighted and may not be shared, as stated in your membership agreement. 

 

That said, if you have a family member or friend that is interested in the Anchor Fund, or the strategy through this site, feel free to invite them to join.  If they are more interested in the Anchor Fund itself, just direct me to them, and I will get them all the materials they need.

 

Why not Start Your Free Trial?

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Steady Condors FAQs

 

What is Steady Condors?

Steady Condors is a combination of relatively low maintenance and market neutral options income strategies with a strong emphasis on risk management. Steady Condors has very low correlation to the S&P 500 and can therefore add diversification to most portfolios. You can read a full description of the strategy here.

 

What is the difference between Steady Condors and Steady Options?

The primary difference between the two is that Steady Condors only trades positive theta Iron Condor type setups to attain monthly income. Steady Condors won’t have double digit winning months (although it is possible) like Steady Options frequently has. You can also see distinctions between the two (as well as Anchor Trades) on our Subscription page.

 

How should I use Steady Condors?

This is up to you, although the high majority of members will use Steady Condors for education, trade alerts and ideas, and access to our LC Diversified forum.

 

How much money do I need for Steady Condors?

$20,000 is enough to follow the entire strategy while $10,000 would be sufficient to participate in one of the monthly trades.

 

Can I use an IRA for Steady Condors?

Yes, IRA’s are fine as long as your broker allows option spread trading in an IRA. Since we trade cash settled indexes like RUT and SPX you may receive favorable income tax treatment in non IRA accounts under section 1256 of the IRS tax code. Please consult your tax advisor for more information.

 

How much can I expect to make with your service?

Our objective is to make a living, not a killing. We like the story of the tortoise and the hare. Income trading is NOT an ATM machine, regardless of what other option based services are marketing to you. It’s hard and it takes discipline, experience, and a well thought out written plan on how to manage risk.  We believe markets aren't perfectly efficient, but they are a lot harder to beat over the long term than most people realize.  Our long term goal is to make an average of 15-25% annually on the whole account after trading costs (commissions and slippage). Options inherently provide leverage and substantial risk of loss when not used properly, and iron condors are no exception.  Many people mistakenly confuse the high probability of success (per trade) that iron condors offer with safety.   

 

Past performance doesn't guarantee future results. Don't trade capital that you can't afford to lose, and if you are new to options trading take your time to paper trade before risking real money. You will make mistakes early on, and it's better to do that with paper trading instead of hard earned capital.

 

How is performance calculated for Steady Condors?

We report performance net of commissions, on the whole account, and non-compounded.

 

What do I do if I sign up after the current month’s unit has already started?

You can chose to put on the trades as they currently sit, but we generally wouldn't recommend it because prices have likely changed and adjustments may have already been made. With Steady Condors you won't run the risk of missing the trade of the year as our returns typically come from consistent sized gains instead of just a few home runs.

 

Why not Start Your Free Trial?

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General FAQs

 

How is this forum organized?
The forum is organized as a set of sub-forums and topics. In order to get notifications when a new topic is posted in a specific sub-forum, you will need to follow that sub-forum. If you are interested to be notified about new posts in a specific topic, you will need to follow that topic. Please click here for some technical tips about the forum.

 

How do I decide between the SteadyOptions, Steady Condors and the Anchor Trades?

  • SteadyOptions is tailored for more active traders who can monitor the trades on a daily basis. It doesn't mean you have to be glued to your computer, but you should be able to place trades in a timely matter. The returns can be significantly higher as can be seen in the track record, but they are also more volatile and have higher risk. SteadyOptions is also not suitable for large accounts (more than $100k) due to potential liquidity issues.
  • Anchor Trades is a more conservative portfolio. It requires much less monitoring while still targeting positive returns in all market conditions on an annual basis. Anchor Trades strategy can be used even in multi-million dollar accounts.
  • Steady Condors is a risk managed income strategy. The returns are likely to be lower than SteadyOptions, but they are normally less volatile. It also requires much less monitoring and adjusting.  

 

I am a potential subscriber, why I get an error message when trying to open some of the links?
The FAQs section is open for members and non-members in order to give potential subscribers an idea how the service works. However, more detailed description and discussions are open to members only.

 

When do you send your trade alerts?

All trade alerts are sent during market hours. To get notifications from any forum, you need to follow that forum and then each topic individually.

 

How do I cancel my subscription?
I hope you won't. But if you insist, just login to your PayPal account and cancel the PayPal profile. All subscriptions are recurring so you need to cancel before your next renewal date. You will have access till the end of your term (no refunds for the unused portion of the term). I hope to hear some feedback why it didn't work for you. Read more here for PayPal related issues.

 

Please refer to our Cancellation Policy for full details.

 

How can I contact you or ask questions?
The best way is to post on the relevant forum. If you are not a subscriber, you can create a forum account and post on this forum which is open to everyone. You can also contact me by email at info@steadyoptions.com or ak100467@gmail.com.

 

For Steady Condors and LC Diversified, PM or email Jesse Blom at jblom@lorintinecapital.com.

For Anchor Trades, PM or email Chris Welsh at cwelsh@lorintinecapital.com.

 

 

When you are ready, Start Your Free Trial.

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