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I only want to state to support Kim´s words, that it is possible to follow SteadyOptions trade ideas (with the same or slightly different parameters, entry, exits, adjustments, ...) and get similar and from time to time better results (depends on your risk tolerance, Kim is in my opinion quite conservative and wants him followers to be able take similar results). Kim is willing to discuss and share any new approach or idea in options trading. Are you too? Show us any and we can give you our opinion if you want. good trading

I believe it was YOU who completely misunderstood how the study was skewed to reach the conclusion they wanted. When you do a straddle, you can profit from two things: vega and gamma. Both are important factors, and both can contribute to straddle profitability. When you start a straddle with say 100 strike when the stock is at 100, and the stock moves to say 110, you have a very good chance to be profitable because gamma works for you. However, if the stock is at 100, you start with 110 straddle and the stock moved to 110, your chances of profitability are slim to none. When you buy a straddle, you want the stock to move away from your strike, not towards the strike. You LOSE the maximum amount of money if the stock moves to the strike. Their study was not " an attempt to profit from a move away from the strike price". Exactly the opposite: they tried to profit from a move towards the strike price. By doing the study this way, they dramatically reduced the chances of the straddle to be profitable. The segment has been removed from tastytrade website, which shows that they realized how absurd it was. . We will let tastytrade to do their "studies" while we are making money with real trading not studies. We traded 18 straddles in 2016 with winning ratio of 72%. In 2017 we already closed 4 out of 4 winners. We do it by implementing the strategy the way it should be implemented (choice of stocks, entering at right prices etc.) In fact, we are very grateful to tastytrade followers for providing us a fresh supply of sellers for our straddles.

The question is: does he tell members when to buy and sell in real time? Or it's all hindsight? Again, he might just throw bunch of ideas - and some of them, including those that you mentioned, stick, and become his flagship ideas. Like this guy Bob Prechter from ElliottWave who made himself a pretty good name by correctly forecasting the 2008 market crash. What most people don't remember is the fact that Prechter's newsletter had been almost uninterruptedly bearish for the nearly two decades prior to 2008 -- and, as a result, according to the Hulbert Financial Digest, was near the bottom of the rankings for market timing performance over those two decades. To me, unless a service tells members exactly which stock to buy and sell and when and records those signals, then publishes ALL of them, it's very hard to know the real performance of the service.

That is correct. But returns have to be considered in context. First, you need to consider the holding period. We hold those trades on average 5-7 days. So making 5% in less than a week is not too bad. Second, you need to look at the risk. We rarely lose more than 7-10% on those trades, so the risk is relatively low. And the winners can be significant, especially if the overall market volatility spikes. And the most important thing - as I mentioned, it could be a cheap black swan protection. So you basically have portfolio protection AND get paid for it. I'm not familiar with another strategy that can hedge your portfolio not only for free, but actually produce gains.

Kim, I went over your track record, and as far as I can see, the average return of the straddles is around 4-5%. Is it even worth the effort?

You are absolutely right. We do extensive backtesting to determine which stocks are suitable to trade earnings straddles. It will always be a race between theta and vega, and the race is not linear. We need to enter at the point where theta is winning, e.g. the price is low, before vega causes it to spike. In some cases like our recent ORCL trade, some members were able to milk the same stock 2-3 times.

Thank you Kim. I have been using earnings straddles for years with great success. As you mentioned, stock selection is very important and not every stock will work for this strategy. It is critical not to overpay for the straddles, based on prices on previous cycles.

THank you for posting the "Fake Guru " Article. A few ideas i hope move the ball. I think its productive to migrate away from the idea of a guru towards the idea of seeking out a good coach / mentor. A good coach / mentor is a teacher. Its a person there to listen with empathy and suggest techniques to improve. The worth of a mentor / teacher is measured by how well they help YOU improve as a trader; NOT to demonstrate that they themselves are good at trading. An example might be if you wanted to become a better basketball player. Would you like Micheal Jordan, one of the best to ever play the game, to be your coach, or Phil Jackson, a journeyman player but a master at getting the most out of his players by achieving a psychological edge? THe best teachers and coaches in the world are certainly competent in their profession but are far from the elite in their field. THe skill set for one doesnt have anything to do with the skill set for the other. In my work, I see Traders that use the trading results of the mentor as a litmus test to determine if a would be mentor / coach is worth listening to. THats why both posting results or not posting results are questioned. To them i ask, what do my trading results have to do with me helping you improve YOUR trading results? There are at least 1000 ways to make consistent money in the markets. how come so few people achieve LT success? 90% of trading failure stems from operator error rooted in the psychological, not for lack of a good system / trading strategy. Market Wizards have not mastered the markets, but rather, mastered themselves. THat is the true task of the aspiring trader. So get our the mirror and start working on your self. If you get stuck, search for someone who can help you power through the tough stuff.

Hi Ken, thanks for your prompt answer. Yes, this is what I was looking for. What keeps me thinking is your remark "...that would be redundant and carries some risk". Again assuming a 100% SPY portfolio that is fully hedged with ratio diagonal calenders. What additional risk is added by selling monthly SPY OTM-Calls? I´m wondering because, assuming that the 2%-OTM-Monthly-Short-Call strategy is a profitable long-term standalone portfolio strategy, why would it add additional risks as an add-on component to an existing portfolio; maybe kind of looking at the whole portfolio as two portfolio tranches and pretending the 2%-OTM-Monthly-Short-Calls are just naked calls. Or another way to look at it: Assuming a hedged portfolio that is 100% Nikkei exposure and adding the 2%-OTM-Monthly-SPY-Short-Call strategy. Ignoring potential diversification benefits for our discussion, would you still say that this adds some risk? Thanks Honny P.S. sorry for my bumpy english, I´m not a native english speaker.

I mostly use straddles for pre-earnings trades on stocks. Sometimes I would use it to do straddles on ETFs but I need IV to be very low to do it.

Kim thanks for a great article. Are you using straddles on indexes or ETFs or only on stocks?

So, at this point we know that Karen is a Crystal Palace fraud like all the others, and we're going through lessons learned. Aside from leverage, the biggest red flag that I see looking back, is choosing to trade essentially one underlying product. I can look back through my own p&l's and see that when all I traded was SPX I did pretty poorly. Now I have smaller positions in many different underlyings and I grind out profits over time no matter what one position does. There is no holy grail. Only hard, honest and consistent work and research will benefit your earnings over time.

Thanks for mentioning it. Another factor to consider in favor of index options.

ha some of these are new to me. I also like to look at '4000% per year for 10 years running etc.' claims as I know it's simply impossible and if they'd be making that they wouldn't need to sell subscriptions at 50 bucks a month for it. But it amuses me how people manipulate their results in more or less outrageous manner. Shame for the people that fall for it though and not only lose their subscription fee but also their accounts to these guru's I think the perfect performance reporting for me was if someone would actually stick 10,000$ into an IB account and trade every trade he recommends on his/her service there and puts up the performance reports that IB offers for every one to see. Would make all of the above tricks impossible. In essence that is what subscribers do (trade a 10k$ account (the numbers can be multiplied for larger accounts) so they can see how their account would have changed after a year - 10,000$ on Jan 1st - what do I have now? if its 11,000$ you can tell me all you want about 100's% of cumulative performance etc. I know you made 1k. Simple, honest, no room for interpretation and you can see how the strategy actually works in 'the real world'. Will probably never be used by any newsletter though...