October 1, 2014

Volatility is Back…So Are We…

9-30-14 VIX

We're back. Or better said, it's back. That's right...our old friend Mr. Volatility has once again made an appearance. Just look at the chart below.   For those of you who have no idea what I'm talking about the VIX, or implied volatility is back above historic lows. After much research, we know when the VIX reaches 13 or below selling options in the major indices is typically a bad idea. Basically, the VIX below 13 is an options sellers kryptonite...that is if you are selling options on SPY, SPX and a few other highly-liquid underlyings. But the VIX is once again back above a tradeable level so let the selling begin. Over the course of the next week I plan on selling options on SPY and SPX using credit spreads and … [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 … [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 … [Read more...]

The Trades are a Comin’…

High-Probability Options Indicator

The market is setting us up nicely. Hopefully, we open higher in the morning so I can make some trades. Although, even a flat to slightly lower open would do the trick. Subscribers get ready...the trades are a comin'. If you are a believer in a statistical approach towards investing please do not hesitate to try my options strategies. I use simple mean-reversion coupled with probabilities for each and every trade. Give it a try, it’s free for 30 days. If you haven’t had a chance,  please join my Free Weekly Newsletter, Twitter feed and/or Facebook page. … [Read more...]