June 23, 2017

How to Choose Your Own Probability of Success

Quick Options Primer I am often asked about how I come up with the probability of success percentage that I refer to in many of my reports and here on the blog. For those of you new to the blog, I currently trade two options strategies (I hope to add a few more in the coming months). One of my strategies is a directional strategy using short-term overbought/oversold measures based on my high-probability, mean-reversion indicator. I play the strategy by using straight calls and puts. The other strategy, and indeed my favorite, is the Theta Driver strategy where I sell out-of-the-money vertical spreads with a high probability of success. So, what do I mean by a high-probability of success. The answer is quite simple. Take a … [Read more...]