April 28, 2017

Trade Alert: 1-2-14

The market has pushed decisively lower today,  so I want to take off my short-term IWM trade. Sell to close IWM Mar14 115 puts (IWM140322P115) for roughly $4.05. This will lock in roughly $.50 or 15% on the trade. Not a bad profit for a few days. Remember, the naked call/put trades that are bought to open (rather than sold to open that we typically use) are short-term trades and should be treated as such. Kindest, Andy   … [Read more...]

Trade Alert: 12-27-13

Crowder Options Trade Alert – January Expiration Trades (Open) The market has pushed significantly higher over the past few weeks. As a result, all of the indices we follow have been pushed into a short-term overbought extreme. In fact we are witnessing short, intermediate and long-term extremes in the major indices and almost every sector we follow. Now is a wonderful time to enter a few trades…but with caution. Implied volatility has moved to new lows, so we are not able to sell premium for ideal prices. With that being the case, we want to tread lightly when trading the index ETFs. If we a decent decline over the coming days there might be an opportunity to sell a few bull put or vertical put spreads. This will turn our current bear … [Read more...]

Trade Alert – 12-19-13

Crowder Options – Trade Alert (close) December expiration is quickly approaching. All of our trades are in profitable territory at the moment, so now would be the time to lock in some profits and move on to the next expiration cycle. I expect to have several January and possibly February expiration trades in the coming days. Stay tuned. Until then here are the closing trades. Notice I did not mention XRT. The ETF is currently trading smack dab in the middle of the short strikes of the iron condor so I will allow the spread to expire worthless for a max profit. S&P 500 (SPY) – Bear Call Here are the trades: Simultaneously: Buy to close the SPY Dec13 182 calls (SPY131221C182) Sell to close SPY Dec13 184 calls … [Read more...]

Trade Alert – December 3, 2013

Last week I sent out an aggressively directional SPY trade. As most of you know I prefer to trade spreads due to the margin of error. But, there are occasions when the opportunities are just too good to pass up. At the time I initiated the trade all of the market benchmarks that I follow (you can access on the blog portion of the website) had pushed into an extreme short-term overbought state. As a result I made the following trade: Buy to Open SPY Jan13 180 Puts (SPY140118P180) for $3.25 Since that time SOY has pushed decisively lower so now might be a god time to take off the trade for some short-term profits. Some of you might wish to hold on to a portion of your position and I wouldn’t blame you. I think we could see a nice … [Read more...]

Trade Alert – November 22, 2013

SPDR S&P Retail ETF – XRT The retail sector has pushed into a short-term overbought state and is struggling with overhead resistance at the moment. As a result I want to place the following trade: Here is the trade: Simultaneously: Sell to open the XRT Dec13 91 calls (XRT131221C91) Buy to open XRT Dec13 93 calls (XRT131221C93) Sell to open the XRT Dec13 83 puts (XRT131221P83) Buy to open XRT Dec13 81 puts (XRT1312211P81) for a net credit of $0.28 (Do not accept less than $0.25 credit to enter this trade.  Enter this trade as an iron condor to avoid paying double commissions.) Here are the parameters for this trade: ·         The Probability of Success – 87.9% ·         The max return on the trade is the credit of $0.28 or … [Read more...]

Trade Alert – 10/23/13

Crowder Options Trade Alert – XOP (Close) Roughly one week ago we placed a short-term directional trade in XOP. We decided to buy a few puts because XOP had moved into a short-term extreme and we wanted to take advantage of the opportunity. XOP had pushed into a “very overbought” extreme, so per usual we faded the move expecting mean-reversion to kick in. Usually we will use typically extremes as an area to sell options, but when they hit extremes like what we saw in XOP we want to be more aggressive. Of course, we always want to keep our position-size in mind because of the aggressive nature of the trade. With XOP down over 2.5% today we were able to lock in profits of 79.3% on the trade. Here is the trade: XOP Puts  Sell … [Read more...]

Trade Alert – 9/30/13

Trade Alert Our two positions for the October Cycle are nearly worthless. Some of you might want to consider taking off one or both spreads to lock in profits and eliminate any risk. I will most likely be doing the same over the next week. As for the November expiration cycle there are 46 days left, so we need to add a position or two to our already established SPY Nov13 179/181 Bear Call spread. The first position I want to add today is an iron condor. Implied volatility has shot up over the past few days so now is an ideal time to start selling some premium. I want to use the increase in IV as an opportunity to create a larger margin of error. Here is the trade: IWM Iron Condor Simultaneously: Sell to open the IWM … [Read more...]

Trade Alert 9-20-13

The SPY (SPY) has pushed into a short –term extreme overbought state. As a result, I have decided to place the following trade. Here is the trade. Simultaneously: Sell to open the SPY Nov13 179 calls (SPY131116C179) Buy to open SPY Nov13 181 calls (SPY131116C181) for a net credit of $0.30 (Do not accept less than $0.27 credit to enter this trade.  Enter this trade as a vertical call spread or bear call spread to avoid paying double commissions.) Basically as long as SPY stays below 179 through November expiration (56 days), the trade will be a success. That’s right, we can be wrong in our directional leaning and still have a profitable trade….again, the beauty of credit spreads. My intent, like most vertical spreads, is … [Read more...]

When Trading Options Uses Probabilities To Your Advantage

I am often amazed by the lack of common sense when it comes to investing. Investors seek the best possible information, but unfortunately most turn to the wrong sources. For starters, turning on the television for investment advice, in most cases, is a big no no. Yet, how many people listen intently to the daily drivel coming out of screaming mouths on CNBC. Investors, particularly traders, should know that every trade spouted from these sources have a 50% chance of success. Add in transaction costs and the probability declines further. Yet, the majority of investors and traders take this approach, mostly because they are not privy to any other form of investing. Self-directed investors are not aware that there are strategies based … [Read more...]

Stop Guessing And Learn The Statistical Way To Invest

The Statistical Truth I hate to say this about some of my fellow options traders, but I can't tell you how much I abhor those in the industry (you know who you are) that absolutely ruin the true benefits of options for the self-directed investor. Claims of outlandish 300%, 400%, 1200% in just a few days. Encouraging the use of low-probability out-of-the-money puts as a predominant strategy without the mention of selling premium. It's frustrating. It's frustrating to see so many so-called gurus with no real-world experience act as options traders when their services fail time and time again. Again frustrating. For some reason investors don't crave what's truly important, realistic strategies with realistic gains. Transparency. … [Read more...]