New Forum Poll

[cwelsh 1,497]

All:

 

  Steady Options is planning on expanding its forums and offerings to further benefit the members.  We're considering several possibilities, which are described below.  Immediately following this post will be a poll, asking for member feedback.

 

  Here are the forums we are considering:

 

1.  Options Basics -- this will have regular covered calls, basic iron condors, and other similar trades.  The goal here isn't to knock anything out of the park, but rather to provide regular basic options trades for people to learn from and participate with;

 

2.  Do it yourself annuity -- most life insurance company products are nothing more than collars or similar structures, but with ridiculous fees attached.  This would build out a similar product that members could follow.  It's goal would be something along the lines of "target a 7% per year return, with a 10% max, and a max draw down of 7%."  (Numbers are purely made up for now).  This is different than your "normal" Steady Options trade, but it certainly would have a place in most individual's portfolios;

 

3.  Gamblers Paradise -- this would list regular swing for the fences type option trades.  A LOT of discussion would be given to risk management, but we would target more "exciting" trades with huge potential for gain -- and for loss.  Obviously this should never be a large part of a portfolio, but it can have a place, and is something many traders enjoy;

 

4.  Modified Hedge Fund -- some of the original and most successful hedge funds were long short funds.  These can be recreated, sometimes with even greater leverage, using leverage.  This would explore stock picking and creating long short funds using options.

 

5.  Fundamental Options -- these are option trades that derive from fundamental analysis of a company.  For instance, if we look at stock ABC and think its PEG is to low, debt is great, and generally looks like a stock we would like to own, how to construct an option position that is "better" than simply being long.  That may be a deep in the money position, a diagonal, a covered call, etc.  It'll be a forum for discussing individual stocks, our opinions on them, and THEN building option trades from those positions.

 

If you don't like any of the above options, and would like to see something else, just post it and we'll consider it.  This is the chance for all subscribers to say "I wish you did this."  We won't promise to do it, but we will take all comments into consideration when creating a new product.

[CJ912 133]

@cwelsh just to be clear: these would be new subsections in addition to the existing sections, not replacing the current setup?

[rasar 1,877]

Thanks, Chris. I actually like all the suggested forums from the perspective of have a well-rounded offering. I've been hoping for almost all of these for a while.

(PS - I assume the title of this poll should read "New Forums Poll")

[cwelsh 1,497]

6 minutes ago, CJ912 said:

@cwelsh just to be clear: these would be new subsections in addition to the existing sections, not replacing the current setup?

They most likely will be entire new products/forums.  

[zxcv64 700]

6) Swing trading with options.  So, rather than using stock, if there is a swing trade situation for ABC stock, we would buy the options on it for leverage. (Basically, directional trades.)

[cwelsh 1,497]

2 minutes ago, zxcv64 said:

6) Swing trading with options.  So, rather than using stock, if there is a swing trade situation for ABC stock, we would buy the options on it for leverage. (Basically, directional trades.)

So that's very similar to what I had in mind for 5.  Here's something I model and watch:

 

-- Pick very liquid company, let's say ABT;

-- Pick three major valuation metrics (I like PEG, Debt ratio, net profit margin);

-- calculate the averages of each of the three categories over the last X quarters (more is better);

-- If the metrics are x% out of line with the average on all three metrics, buy using options.  So if the PEG, Debt Ratio, and Net profit margins were all 30% "better' than their averages, purchase a DITM call (then all of the derivatives from that as well).

 

That's just an example, but I think we're in the same line.

[urfiend 8]

I like all the ideas.

especially
the fundamental options and the 

swing trade options 

[billave 23]

Like the creativity.  This is great suggestion to get a little broader variety.  Each of the new forums look interesting.  For me particularly #4. Modified Hedge fund, #5 Fundamental Options, and #1Option Basics.  Hope you get a couple of these going.

[Kim 7,423]

I'm going to merge the two topics.

[Kim 7,423]

1 hour ago, cwelsh said:

So that's very similar to what I had in mind for 5.  Here's something I model and watch:

 

-- Pick very liquid company, let's say ABT;

-- Pick three major valuation metrics (I like PEG, Debt ratio, net profit margin);

-- calculate the averages of each of the three categories over the last X quarters (more is better);

-- If the metrics are x% out of line with the average on all three metrics, buy using options.  So if the PEG, Debt Ratio, and Net profit margins were all 30% "better' than their averages, purchase a DITM call (then all of the derivatives from that as well).

 

That's just an example, but I think we're in the same line.

I believe this is a bit different. @cwelsh refereed to more long term investing, using options as stock substitute. @zxcv64 referred to swing trading, which is probably more short term (from few days to few weeks)? Am I correct?

[zxcv64 700]

 

5 minutes ago, Kim said:

referred to swing trading, which is probably more short term (from few days to few weeks)? Am I correct?

Yep, you are correct. I was looking for swing trading based on short term technical overbought/oversold etc indicators as opposed to longer-term fundamental indicators.

 

[t'pee 495]

I voted for fundamentals based option trades but these are all very interesting. I know the idea here is for new services  but a 'bonus' trade where one idea from another forum gets published in the other forums on monthly or other cadence would be very nice 😉 (had to try!)

Edited August 26, 2020 by t'pee

[Manny 44]

Options Basics, Modified Hedge Fund and Fundamental Options are all of interest to me.

By using the words: (1) "annuity" and (2) "gambler's paradise", you have proven to me that you do not spend money on marketing.  So that this is not misread, I mean it as a compliment. 

[cwelsh 1,497]

13 minutes ago, Manny said:

Options Basics, Modified Hedge Fund and Fundamental Options are all of interest to me.

By using the words: (1) "annuity" and (2) "gambler's paradise", you have proven to me that you do not spend money on marketing.  So that this is not misread, I mean it as a compliment. 

Thank you, that made me laugh.

 

No I do not have a background in marketing.  I'm an engineer from college, lawyer, and then  finance.  I'm more of the "I could care less what its called or what color is it, how does it work?" type mindset.

 

Sometimes clients don't like the pitch "quit being stupid and listen to me" approach though.

[DubMcDub 122]

The do-it-yourself annuity and the gambler's paradise are both appealing to me. I doubt I'd pay for the latter, though you never know. The former is definitely something I would pay for, even though I'm nowhere near retirement age or needing an annuity. I find tremendous value in learning to do things like that on my own. 

[Manny 44]

3 minutes ago, cwelsh said:

Thank you, that made me laugh.

I was smiling when I typed it - just did not want it to be misunderstood..  "Gamblers Paradise" will no doubt attract individuals.  

[simple1 1]

1 hour ago, zxcv64 said:

 

Yep, you are correct. I was looking for swing trading based on short term technical overbought/oversold etc indicators as opposed to longer-term fundamental indicators.

 

I think swing trading based on technical would be more interesting. Fundamental indicators would be long term and I would be curious how to do it with options due to time decay.

[Kim 7,423]

5 minutes ago, simple1 said:

I think swing trading based on technical would be more interesting. Fundamental indicators would be long term and I would be curious how to do it with options due to time decay.

You could do something similar to what we did with our AAL or UNG trades - diagonals or ratio diagonals, using ITM long term options and selling short options against them every month.

[simple1 1]

That makes sense. Thanks

[dmilo 3]

I voted for Fundamental Options, but for me that means Swing Trading based on technicals. I'm already doing this - trying to - and could benefit from seeing experts trade this way.

I also voted for Gamblers Paradise, and I would be especially interested if some of the trades were Event Driven. It might be difficult to offer as a service given that some of the most lucrative opportunities need very fast response time. But as long as you guys spell it out that "these Event Driven trades appear and disappear very fast, sometimes within a few hours or less", I think it could work.

Thanks for this.

 

[QuickNick 82]

All of those ideas sound nice as long as there is an abundance of mentor resources to nurture them without it taking away from the performance of the core SO strategy. 

 

Along the lines of @Rado’s topic today, how about a section called something like Theta Trades or Premium Harvesting or Options Income.  These trades would be beneficial compliments to the SO trades because they benefit from time passing (Theta decay) and IV falling (short Theta).  
 

Basically expand on concepts promoted by TastyTrade and Option Alpha’s with the Steady Options level of sophistication that would make them actually work better. 

Edited August 26, 2020 by QuickNick
Also, if it’s presented as an income strategy, it could capture the attention of retirees that are seeking to diversify their sources of income. “Steady Options High Income”

[ScottDarnell 2]

0 DTE

[Jevgeni 25]

I like:

4.  Modified Hedge Fund

5.  Fundamental Options

[QuickNick 82]

Regarding fundamental trades, spread-loss and index underperformance would be a concern for some investors.   
 

Fundamental investing usually resembles value investing which often takes several months or more to come to fruition.  We may need to buy LEAPS to reduce theta decay.   However, compared to options with a few months DTE, LEAPS are much more expensive (less leverage) and much less liquid for the DITM delta we would want.   I think that’s ok in a strategy like Anchor because we make very few LEAP option trades per year and the ETF LEAPs are more liquid than the vast majority of individual stocks.  Also though, previously when Anchor used individual stocks or dividend ETFs, I’m too many users were complained about it lagging the indexes.  Going forwards, I think it’s very likely that value stocks and quality dividend stocks should outperform over this decade like they did 2000-2010, but we can’t be certain.  
 

To shorten the length of options needed to just a few months for liquidity and lower option cost (more leverage), a combination of fundamentals with a catalyst and/or technicals may be better suited strategy.  Stocks like those picked by Motley Fool’s Stock Advisor service seem to lend themself well to doing Poor Man’s Covered Calls (PMCC Diagonal) with the short far out of the money at a low enough delta.  We could also go short the weakest names using Poor Man’s Covered Puts (PMCP Diagonal).  We could sell the short option less than 60-days out and either roll or temporarily close the short when it either decays 25-75% or reaches 21 DTE to reduce Delta risk or 7 DTE to reduce Gamma risk.  The idea of closing the short around 50% decay and then quickly reopening if its value shoots back up or if it doesn’t, just waiting and rolling to the next 30-60 days short sounds optimal based on intuition.   However, backtesting to see would help if we can’t find valid research on it online.  One of our members is using this approach on the shorts for the long term diagonal trades we have in SO.  Based on his recent response to Kim and Yowster, it sounds like it’s juicing his returns up nicely.  

[cwelsh 1,497]

20 hours ago, QuickNick said:

All of those ideas sound nice as long as there is an abundance of mentor resources to nurture them without it taking away from the performance of the core SO strategy. 

 

Along the lines of @Rado’s topic today, how about a section called something like Theta Trades or Premium Harvesting or Options Income.  These trades would be beneficial compliments to the SO trades because they benefit from time passing (Theta decay) and IV falling (short Theta).  
 

Basically expand on concepts promoted by TastyTrade and Option Alpha’s with the Steady Options level of sophistication that would make them actually work better. 

The new forums would do nothing to take away from the core of SO.  This would just be "another" opiton.

[Manish71 28]

Would these new forums be part of the existing membership or would they be needing an additional subscription ?

 

Thanks.

[Kim 7,423]

Additional subscription, but some might be part of Anchor or Momentum.

[Troy Mclure 30]

I like all the topics.  Have you considered learning videos. 5 min long?  What about Zoom type learning forums by the team where we could learn, with a fee per meeting?
 

Troy