June 29, 2017

When Trading Options Use 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, 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 aren't privy to any other form of investing. Self-directed investors aren't aware that there are strategies based purely … [Read more...]

Short-Term Reprieve Occurs – Will It Continue?

The short-term reprieve that I mentioned in the Free Weekend Report (Sign-Up Free Here) occurred today and by the looks of it we could see more downside tomorrow. As I mentioned in the report "as for the current technical picture, the all of the major indices and most sectors are in a short-term "very overbought" state as we head into the week of options expiration. Not only are the major benchmarks in one of the most short-term overbought states that we have seen in quite some time, but we are now hitting strong overhead resistance with two unclosed gaps directly underneath. Combine all of the aforementioned and you can quickly see why the risk/reward scenario leans heavily towards a short-term reprieve next week." Now all of our … [Read more...]

High-Probability, Mean-Reversion Indicator – Short-Term Reprieve Looks Imminent

It was another day of sideways trading. The market was able to hold gains for yet another day which was impressive given the short-term overbought extremes, strong overhead resistance and yesterday's huge upside gap. I am still leaning towards a close of the upside from yesterday which would bring SPY down to $117.25, DIA down to $112.21 and QQQ down to $54.66. I would expect that this occurs over the next 2-3 days, but Mr. Market always has a way of playing games with what should be obvious price levels. I found an interesting nugget from Jason Goepfert of Sentimentrader.com today. "According to Bloomberg , at least 500 more stocks last traded on an uptick than a downtick on each session during the past week.  The 5-day average of … [Read more...]

High-Probability, Mean-Reversion Strategy – Major Benchmarks Reach Short-Term Extreme

The S&P 500 (SPY) has pushed 11% higher since its low set last Tuesday. It has indeed been a "rip your face off" type of rally with many bears left for dead. I added two more positions today: one in the High-Probability, Mean-Reversion Strategy and one in the Theta Driver Options Strategy. The latter certainly looks to be in much better shape at the moment, but I believe we will witness a decent pullback over the coming days. Why? As I said before, the major benchmarks are currently in a short-term overbought state, but now all of them what has been strong overhead resistance. Furthermore, we had a very large gap today in all of the major indices that went unclosed. Combine the three and the risk/reward leans heavily towards a … [Read more...]

My Favorite Options Strategies

News equals noise. When are people going to get it? The news means absolutely nothing to me as an options trader. The entire industry has been commoditized. And when I say this I mean that one offering (financial media outlet) is nearly indistinguishable from another. Why? Technological innovation. News is widely accessible and therefore basically the same everywhere. The only difference is how they market themselves and as a trader I just don't care about their marketing techniques. Nor do I care about the news that they spew out on a daily basis. As an options trader it doesn't matter to me. Fear is what sells. It's all over the news, every day, every hour. And while I do care about the macro-picture for my own self-interests, … [Read more...]

Options Strategies Continue to Roll

I am back after another short hiatus. We have had a few great trades over the past few weeks, one in the High-Probability, Mean-Reversion Options Strategy (up 7.4% in September) and one in the Theta Driver Options Strategy (expires tomorrow with over a 12% gain). I will be sending out the Weekly Report that details each trade and the performance of each strategy. I was unable to get out the FREE Weekly Report last week due to unforeseen circumstances, but will have the my Expiration Report out Sunday. Stay tuned! I will be back with my regular blog posts next week. Thanks for being patient. Hey, at least we have some really great trades to talk about. Both strategies continue to move onward and upward and that is the most important of my … [Read more...]

Short-Term, High-Probability, Mean-Reversion Options Indicator

Keepin' it short. Big weekly report! Two more successful trades to talk about. HPMR strategy up 7.4% in September. Theta Driver trade  and much more.... Stay tuned! If you haven’t already, don’t forget to sign-up for my Free 30-day trial. Also, for those of you who live on Facebook. You can access my daily info on the social network as well. Just click on LIKE. … [Read more...]

High-Probability, Mean-Reversion Indicator

I am going to keep it short tonight. As you can see per the chart below, all of the ETFs I follow in the High-Probability, Mean-Reversion Options Strategy are in a neutral state. However, there are some very good opportunities in the Theta Driver Options Strategy and I plan on making a trade in the strategy tomorrow. I would expect after Big Ben speaks we will see a few short-term extremes enter the market which should give us a few potential set-ups in the HPMR strategy. I am still waiting patiently for a trade. Subscribers stay tuned, particularly those of you who are members of my Theta Driver strategy. Until then, Andy Also, for those of you who live on Facebook. You can access my daily info on the social network as well. … [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...]