August 20, 2017

Trade Alert (open) 2-6-2015

The S&P 500 has pushed into an overbought state, so now is a good time to sell a few bear call spreads. Here is the trade: Please pay attention to the OPRA or options code. These are options with 42 days left until expiration. Simultaneously: Sell to open the SPY March 2015 214 calls (SPY150320C214) Buy to open the SPY March 2015 216 calls (SPY150320C216) for roughly $0.35 Do not accept less than $0.30 credit to enter this trade. Enter this trade as a spread to avoid paying double commissions. Here are the parameters for this trade: The Probability of Success – 83.20% The max return on the trade is the credit of $0.35 or 21.2% based on the required margin ($165) over the next 42 days. Break-even level – … [Read more...]

Trade Alert (open) 12-22-14

  Here are most likely the last two trades of the year. It’s been rather slow over the past few months which is why I will be introducing five new portfolios at the onset of 2015. Stay tuned for what will be a huge new offering for all of you and one that I think all of you will thoroughly enjoy. Have a wonderful and safe holiday season!!! SPY Credit Spread Please pay attention to the OPRA or options code. These are options with 10 days left until expiration. Simultaneously: Sell to open the SPY January 2014 212 calls (SPY150117C212) Buy to open the SPY January 2014 214 calls (SPY150117C214) for roughly an $0.34 credit Do not accept less than $0.30 credit to enter this trade. Enter this trade as a spread to … [Read more...]

Trade Alert: 10-14-2014

First of all, I hope several of you held on to our old DIA puts position. While we made a nice gain on the trade, had we held the gains would have been tremendous. As most of you know, I’m a probability hound so I rarely buy options. But, the opportunity for a quick scalp looked too good to pass up. So, I decided to buy the Nov. 173 puts for $3.50 and a few days later we sold them for $4.50. The 28.6% gain was nice, but the puts are now worth $9.80. We currently have three open positions and all are in profitable territory. October expiration is Friday and our Apple 108.57/106.43 bear call spread and DIA 176/175 bear call spread are both essentially worthless. Some of you might prefer to hold both of the spreads through expiration … [Read more...]

Trade Alert: 10-3-2014

SPY has popped off it's recent oversold state and now the RSI (2) is back in an overbought state. I would prefer to see the RSI (5) in an overbought state as well, but given current IV I want to get a trade off before it dips again. MY intent is to turn this one into an iron condor. Stay tuned! Here is the next trade… SPY The underlying ETF is in an overbought state… which means I’m very comfortable selling a bear call spread with a high-probability of success here. Here is the next trade (please pay attention to the options code or opra.) Simultaneously: Sell to open the SPY November 2014 205 calls (SPY141122C205) Buy to open the SPY November 2014 207 calls (SPY141122C207) for roughly $0.32 Do not accept less than … [Read more...]

Trade Alert: 9-23-14 (close)

Late last week I did something a bit unusual. I typically don’t buy options, but I did late last week due to the overbought state in DIA. I’m hoping all of you were able to participate. I’ve decided to lock in the 28.5% profits today. Some of you might prefer to hold on a bit longer, I just want to take my profits and move on to the next trade. As a result I will be doing the following: Sell to Close DIA November Puts (DIA141122P173) for roughly $4.50 Enjoy the profits!!! Andy … [Read more...]

Trade Alert: Selling and Buying, Yes Buying, DIA

Trade Alert: Selling and Buying, Yes Buying, DIA Okay, now that September expiration is behind us, well almost, we can move forward. Here are the next two trades… DIA The underlying ETF is in an overbought state… which means I’m very comfortable selling a bear call spread with a high-probability of success here. Here is the next trade (please pay attention to the options code or opra. Simultaneously: Sell to open the DIA October 2014 175 calls (DIA141018C175) Buy to open the DIA October 2014 176 calls (DIA141018C176) for roughly $0.20 Do not accept less than $0.17 credit to enter this trade. Enter this trade as a spread to avoid paying double commissions. The goal of selling the DIA vertical bear call (credit) … [Read more...]

Trade Alert: 9-18-2014

As most of you know our September SPY position is in-the-money (ITM). Expiration is Friday, but due to SPY being ITM and ex-dividend Friday, w will need to close out our position by market close today. If we do not we will be responsible for the dividend. Times like these are a reminder that even though we are using high-probability strategies with an 80%+ probability of success there is always a slight chance a loser will occur. In fact, it will occur. It’s just a matter of time. Anyone that tells you different is an outright liar. Losing trades will happen. Which brings me to the topic I discuss often…position-sizing. As I have said in the past, if you are stressed about a losing position you most likely have too large of a position … [Read more...]

Trade Alert: 8-8-2014

Here is the trade: Simultaneously: Sell to open the SPY September 2014 198 calls (SPY140920C198) Buy to open the SPY September 2014 199 calls (SPY140920C199) for roughly $0.27 Do not accept less than $0.24 credit to enter this trade. Enter this trade as a spread to avoid paying double commissions. The goal of selling the SPY vertical bear call (credit) spread is to have the underlying ETF, in this case SPY stay below the 198 strike through September expiration in 42 days (Sept 19th). SPY would have to move 2.6% from its current price of $193 before the trade begins to reach break-even. The trade will suffer its maximum loss if SPY moves above 199. The probability of moving above 199 is less than 19%. Here are the … [Read more...]

Trade Alert 8-6-2014

VXX September 27/25 Bull Put Spread The pullback in volatility today gives us a great opportunity to sell premium in VXX. Here is the trade: Sell to open VXX September 27 puts (VXX140920P27) Buy to open VXX September 25 puts (VXX140920P25) for a net credit of roughly $0.36. Do not accept less than $0.30 credit to enter this trade. Enter this trade as a spread to avoid paying double commissions. The goal of selling the VXX vertical bull put (credit) spread is to have the underlying asset, in this case VXX stay above the 27 strike through September expiration (September 19th). VXX would have to move over 16.9% from its current price of $32.50 before the trade begins to reach break-even. The trade will suffer its maximum … [Read more...]

Trade Alert: 8-5-2014

With the return of volatility, we should have some great opportunities going forward. We’ve been waiting for Mr. Volatility’s return for months and now that he is back let’s take advantage. As an aside, I’m sure most of you have noticed a decline in the number of trade alerts recently. I discussed in the last update why that was the case – low volatility. It just doesn’t make sense to try and sell options when the volatility is so low, especially at historic lows. We’ve performed extended studies that state when the VIX is below 13, stay on the sidelines, at least when it comes to selling options on benchmark ETFs like SPY. That being said, we have some good fortune recently with our IWM bear call spread, SPY bear call spread and now … [Read more...]