SteadyOptions is an options trading forum where you can find solutions from top options traders. TRY IT FREE!

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

Steady Momentum Strategy

What Is Steady Momentum?

Have you ever thought cash secured put writing seemed like a great idea, but never got around to doing it? Cash secured put writing has been shown to historically provide returns similar to the underlying asset, yet with less volatility and drawdown.

We contend that over time the strategy must work, otherwise it implies that stock market insurance would be available for free.

The goal is to produce higher risk-adjusted and absolute returns than the underlying S&P 500 index. Risk adjusted returns take into account both returns and volatility, resulting in a nice increase in Sharpe Ratio.

Service Highlights:

  • Tailored for long term investors
  • Very low maintenance
  • Very simple to follow
  • 2-3 trades per month
  • 2-3 option positions plus ETFs
  • Targets to beat the benchmarks with lower volatility
  • Very little commission impact
  • $25K+ portfolios

The strategy

The Steady Momentum strategy's long term objective is to beat the benchamrk indexes with lower volatility.

Step 1 - Sell fully collateralized put trade alerts on both the S&P 500 and MSCI EAFE indices

Step 2 - Adding a time series momentum filter

Step 3 - Collateralize the put selling with with low risk ETFs

When momentum signals indicate a change in trend for each underlying index, simple risk-management adjustments will be made to move trades further out of the money until upward trend signals resume.

Performance tracking will be based on a hypothetical $100,000 account, although subscribers could allocate much less.

Steady Momentum also includes a bonus strategy: ETF trade alerts producing a low-turnover multi-factor globally diversified portfolio that may be suitable for long-term portfolios. Potential portfolio adjustments occur on a monthly basis, and subscribers could allocate basically any dollar amount.

You can read the full description here.

Why We Are Different?

The impact of reducing portfolio volatility and minimizing losses in down markets should not be overlooked both mathematically and psychologically.

Both strategies are simple to follow and very low maintenance, making it easy for subscribers to replicate results. Put contracts will be fully collateralized by low risk fixed income ETF's. Skillful execution of limit orders will have little to no impact on subscriber success.

Management Style is Systematic. All alerts are submitted based on a pre-defined set of quantitative rules. Subscribers can execute alerts based on their own discretion and risk tolerance.

If you're looking for constant action and high risk/reward trades, this service isn't for you. Some option selling services use extensive leverage and attempt to make in a month what our put selling approach is expected to make in a year. We know how this usually ends.

We emphasize options education in a dedicated forum where the strategy is discussed in great details.

Please note that we report returns on the whole account (not return on margin) including commissions.