Name Of the Game: Steady, Consistent, Transparent

[Kim]

Numbers don't lie. Take a look how the major indexes performed in January, and compare it to SteadyOptions performance:

S&P 500: -3.1%

Dow Jones: -3.7%

Russell 2000: -3.3%

SteadyOptions: +20.7% ROI

After booking 146% ROI in 2014, we closed 8 trades in January, producing an incredible 88% winning ratio and 16% average return per trade.

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[Guest]

I agree that this service is nothing short of amazing. However my average ROI YTD is 9%, which is probably closer to reality.   

[Kim]

Dear Alex,

 

Thank you for your kind words.

 

You joined SO less than a month ago. I'm sure you missed some trades. Maybe you closed some trades too early (BABA is one example I remember). The track record also includes few trades that were open before you joined.

 

I'm sure that over time you will learn to get better fills and improve the results

[sridharavl]

I agree that SO is one of the best services out there. This is not to take away any credit but let's not forget these are commission intensive strategies, you can pretty much subtract 7-8% as commission costs especially earnings double calendars. Commissions are part of doing business so I am not complaining. A double calendar also has same number of legs as an Iron Condor but the difference is amount of capital deployed. With IC you are using approximately $7.5 to make 15-20% so commissions as % of return is lower. Where as usually with earnings calendars we are using approximately $1-$2 to make 20%,  so commissions usually take away bigger part of the return. On the flip side earnings calendars are much less riskier than IC.

Edited February 7, 2015 by sridharavl

[Kim]

All spread strategies are commissions consuming. This is why it is so important to use a cheap broker like IB.

I'm not sure what 7-8% refers to, but it is fairly easy to calculate the impact of commissions. If you use IB, you will pay ~$3 (0.75*4) per spread per calendar. So even with cheapest calendars like FB which costs 0.60, commissions reduce the gain by 5% (3/60). With $2 spreads it is 1.5%.

Since we also trade higher priced spreads like RL, EXPE, AZO etc., average spread is around $2-3, so commissions reduce the gain by 1-1.5% per trade. If you make 10 trades per month and allocate 10% per trade, the overall monthly gain will be reduced by 1-1.5%.

Using more expensive broker will change this. If you trade small account and use broker with ticket charge, the results will be impacted dramatically.

[Guest]

There is correlation between returns and number of contracts purchased. When spreads are cheap, I have to buy 30-40 calendars on each leg and it creates a lot of commissions. There is also exchange fee, which sometimes is surprisingly high. I called IB and they explained to me that it has to do with "subtracting or adding liquidity to the market". If you take away liquidity, exchange fees are higher. I don't know if this is true, but I seen pretty hefty fees. Also slippage has it's serious effect. So I already mentioned in my previous comments that most traders would be able to realize substantially lower returns than officially announced. I believe that results will get better with time.

[Kim]

Dear Alex,

 

Not sure if you had a chance to read my previous comment, but yes, I specifically mentioned that commissions are higher with cheaper spreads. I also mentioned that on average, monthly gain is reduced by 1-1.5% if you are using IB. Exchange fees can work both ways - in some cases, I paid 0.10/contract because of "adding liquidity". Average is still around 0.75/contract. Brokers and Commissions topic has more about this.

 

Not sure why slippage can take "serious effect" as those are real fills and not "hypothetical" returns. I don't know if most traders will have "substantially lower returns", but I know many members that actually get better returns, by being more proactive, taking some trades that are not part of our official performance etc. As I mentioned in the article, 50% gain in SNDK, 30%+ gain in INTC, 30%+ gain on YELP, 25%+ gain on AMZN, 15%+ gain on YUM are just few examples. Also, please remember that unlike most other services, we post returns on the whole account and non-compounded. 

 

Commissions are part of trading, and all our updates and performance page mention that returns don't include commissions. To compare our performance reporting to other newsletters, I would suggest reading Performance Reporting - The Myths And The Reality article. I believe that our numbers are completely realistic and our performance reporting is among the most transparent in the industry, but I realize that no matter what we do, we cannot please everyone.

 

To put things in perspective, I would like to quote one of our long term members who posted review on Investimonials - http://investimonials.com/newsletters/reviews-steadyoptions.aspx#4profit  

 

"I've been a member of Steady Options for almost 2 years and I have been a trader of every strategy, vehicle, and time frame imaginable for over 15 years. I have not only been a member of most every site out there but also ran a trading platform with over 400 members. We had quite a few months that netted over 100% in performance through auto trading. These were based on real fills and we often posted our personal fills online. That being said, it never ceased to amaze me how a few people would nickel and dime and nit pick when it came to performance. Heaven forbid that someone's fill was a dime different than what we posted. Suddenly we where liars who were out to get everyone. Get real. 

I encourage everyone to take look at other option sites out there and understand how their published performance is tracked and reported. In reality most sites out there are completely off with what they post and what is actually obtained. In fact, most sites simply send an alert and that's where it ends. Management and exit is on you. As an example, here is a description of another option site explaining how they post performance: 

" ....posting results that indicate what was possible for traders to achieve on every single trade, good or bad. We realize that it is highly unlikely to achieve these results, but it is incredibly important to track the performance of our trades in this manner."

They post the HIGHEST "what was possible" return and count every trade that popped at least 10% to the upside a winner. Even if it went up 10% and then fell 50%.

But this is what people want to see ... and makes them sign up. 

Now let's turn to SO. I would be willing to bet that Kim and his site to be one of ... if not THE most accurate, concise, realistic and transparent sites out there, ESPECIALLY when it comes to performance reporting. 

However, I'm sure a few of you out there will argue back and forth the minor details in this area, so let's look at it a different way. I've owned a few businesses and whenever you look at the potential profit it is prudent to include a margin of error. Typically, it's 10% to 15%. Let's do that here and ramp it up even more so that there is no confusion. Let's use a 50% margin of error. Sound fair? 

So we are going to use only HALF of what is reported. 

SO achieved 89.7% in 2013. If we include a 50% margin of error he still would have returned over 43% which means he would have OUTPERFORMED the S&P 500 by over 11% in it's best year since 1998. 

I might also add the stock market achieved these returns simply because it headed straight up. It was directional. Let's remember Kim has a non-directional strategy approach with the ability to enhance returns even more during a choppy or negative market. 

Through running my own site I am well aware of the time and patience it takes to run a membership program like this. You are limited on vacations, and flexibility of time, and have to deal daily emails and those with unrealistic expectations."

[Guest]

Thanks Kim. There was no intention of criticizing your performance. Obviously some members have better performance than others due to more experience and perfect understanding what to look for, how to place orders to get better fills etc. Because I am just a beginner with your system, I certainly can't get the same results as the best traders out there.

 

I will work on improving my skills and try to get closer to official ROI. Many people have unrealistic expectations. That's why I posted couple of comments that on average people would get lower results than published and that's very normal. The results that I got in the first month are still fantastic and put some confidence in me. My previous results from other services were very inconsistent and included very large drawdowns. This service is very consistent and drawdowns are small. This makes me a believer in your system and gives me confidence to continue with you for a long time.

[Kim]

Thank you Alex.

 

Minimizing drawdowns is our main goal. “In trading/investing it's not about how much you make, but how much you don't lose" - Bernard Baruch.

 

I'm very grateful and thankful to all members of our trading community. I believe this is what makes SO unique. I'm sure with proper effort and commitment and help from our members, everyone has a good chance to become a better trader and improve their results.