June 29, 2017

Options Trades in the High-Probability, Mean-Reversion Strategies

A trade in the High-Probability, Mean Reversion Strategy looks likely if IWM happens to open flat or open tomorrow. Of course, there are a few other thng is that need to line-up, but the first trade of a slow August seems likely. Subscribers stay tuned! Our latest Theta Driver Options trade looks very good. Last Monday, I placed our first trade for a credit of $0.25 and thanks to some help from the bears (although a flat to slightly higher market would have worked as well, just not so quickly) the credit spread is now worth less than $0.05. With only $0.05 and 25 days left until September expiration I will mostly likely lock in the gain for roughly a 9% gain (including commissions) and place another Theta Driver trade within the next few … [Read more...]

High-Probability, Mean-Reversion Indicator – Advantages of Diversified Options Strategies

Before I get started I want to discuss a lingering frustration of mine - the financial services arena. Yesterday, I posted a WSJ interview with Mark Cuban. Mark had a few very insightful ideas for the public including "buy and hold is a crock of s#$!" and "diversification is for idiots." I definitely agree with Mark's first statement - buy and hold is no longer a viable strategy. However, I think he needs to expand on his last statement. While I do agree that diversification in stocks is well, not useful when applied in the typical manner. Because most over-diversify. And quite honestly, I don't bother investing in stocks. It ties up way too much of my capital and I can create far better statistical advantages using options rather than … [Read more...]

Gold Hits a Short-Term Extreme

*Over the short-term Gold (GLD) has pushed into 'very overbought' extreme which could trigger a trade over the next few trading days. If gold happens to move higher and thereby push further into 'overbought' territory I will most likely enter a trade over the next few days. As always, subscribers, be on the lookout for a real-time trade alert and tweet of the trade. New Credit Spread Options Strategy – Beta The market moved lower again today and the Russell 2000 (IWM) is now 4.3 percent below the 86 strike. I sold a vertical spread with 53 days left until August expiration for a $.34 credit and now the spread is worth approximately $.45. The two week rally that occurred during the latter part of June/beginning of July sent the price … [Read more...]

Options Strategies Continue To Shine In This Volatile Market

I am going to keep it rather short tonight. The market moved lower today, but the bears had a rough time pushing the major benchmarks decisively lower. We could still see a push lower, but over the short-term the direction leans towards the bulls. However, there are a few international ETF's that have pushed into an oversold state and a few could be potential plays going forward. Currently EWZ, EWP and TBT are on my radar for short-term plays and as always I will inform all of you (my paid subscribers) in real-time if and when a trade occurs. New Credit Spread Options Strategy – Beta The two week push by the bulls has pushed the value of my credit spread to approximately $.51 which is $.17 higher than my original price. For all … [Read more...]

Patient, Methodical Approach Leads to Further Gains in the High-Probability, Options Strategy. Portfolio Up 47.9% Since Inception.

On Wednesday I entered into some IWM puts. Of course, the market raced higher and my trade was quickly underwater, but I knew that the probability of a short-term decline was extremely high so I placed another trade and the following day the market declined. I stuck with the trade over the weekend because the short-term overbought reading had not worked itself out so the probability of a move lower remained high. Today, the market pushed significantly lower at the open so I was able to get out of my combined position for a nice profit that pushed my the High-Probability, Mean-Reversion options strategy to new high of 47.9% since its inception back in November. New Credit Spread Options Strategy – Beta The surge last week pushed the … [Read more...]

Straight Call Option and a Credit Spread

The long awaited trade finally came to fruition today in the High-Probability, Mean-Reversion Options Strategy as well as my new High-Probability, Mean-Reversion Credit Spread Option Strategy. Subscribers were obviously privy to the former trade and if all goes well and the market ticks down tomorrow, we could see another nice gain in the options strategy. As for the new Credit Spread options strategy here is the trade that was placed: (click to enlarge) As you can see I sold a vertical call spread or a bear call spread, whichever name you prefer it doesn't matter to me. I was able to sell the spread for $.34 which will give me a 17 percent gain (excluding commissions) if the Russell 200 proxy ETF (IWM) closes below 86 at … [Read more...]

VXX breaking to all-time lows.

Was it all a facade? Yesterday, the selling was heavy and historical as the NYSE TICK hit astronomical levels. Panic-selling usually leads to a short-term bounce, but a breach above $118.70 would once again nullify the bearish attempts yesterday. We have seen this type of price action  (heavy selling) five days over the past six weeks and all have led to higher prices afterward. However, this time it is different: yesterday's selling was historical. The NYSE TICK hit levels not seen since the 9/11 crash and the Flash Crash in May. Given the aforementioned and the fact that the next five trading days are historically bearish, I am still sticking with the bears, but my sentiment is strained and I will be exiting if we move up through the … [Read more...]