May 22, 2017

Ignore the Noise. Trade Strategies Based off Probabilities

"What do you think about the latest economic report, data coming out of Europe, etc?" That's a question I often receive. My typical response, I don't care. Okay, that may be a bit harsh, but it is true. For the most part I really don't care about the daily news that flows in and out of the market. I am an options trader. I trade strategies based off probabilities. I create statistical advantages based on my current market assumptions. We must realize that knowing what is going on in the news and knowing how to make money consistently are two separate things. For successful options investors it's about your strategy, your logic, your process, it doesn't matter what you think the market the latest economic report is going to say. I … [Read more...]

The Right and Wrong Way to Approach Options Trading Strategies

A while back I had the pleasure to speak with a gentleman from a prominent newsletter service. It was interesting to see just how he traded options and how his newsletter service and others that he was affiliated with used options in their services. As I suspected - he uses options irresponsibly in his service - as most people do. And I told him so. His response - "You sound like an idealist." An idealist? Why? Because I do not allow marketing efforts to control my options strategies? Because I do not gamble with options by attempting to guess which way an earnings call will go? Because I do not buy out-of-the-money options in hopes that an option will move towards my chosen strike price? I could go on and on. I was amazed … [Read more...]

More Downside To Come?

Today was a banner day for the High-Probability, Mean-Reversion Options Strategy. The IWM puts that I purchased near the close yesterday closed the day up 27.9% and if we continue to move to the downside tomorrow, which looks highly likely we could see even greater gains. My thought is that we will close the gap in IWM, DIA and SPY that occurred last Friday. This would take the major market ETFs to $69.73, $115.77 and $122.10, respectively. If we happen to close the aforementioned gaps then the next move could take the major market benchmarks down to close the gap from 10/10. A move like this over the next few weeks would lead to extraordinary gains in the strategy. A move to close the gap from last Friday could lead to us to a … [Read more...]

Options Indicator Signals Tech Overbought

Here's the list of the ETFs that make up the High-Probability, Mean-Reversion Options Indicator. Hopefully (time permitting), I will be back with another post later this evening. Stay tuned! If you haven’t already, don’t forget to sign-up for my : High-Probability, Mean-Reversion Options Strategy : Free 30-day trial Theta Driver Options Strategy (limited room available): Free 30-day trial Also, for those of you who live on Facebook. You can access my info there as well. Just click on LIKE. … [Read more...]

Options Trade in the Works?

I am going to keep it short tonight. The market kicked up higher at the open and never turned back. As a result, I did not make a trade in either of the strategies today, but tomorrow is a new day and there are still quite a few viable trades out there as you can see in the High-Probability, Mean-Reversion chart below. So, again, subscribers stay tuned. Market Mumbo Jumbo Daily options report VIX Crush - Fed Stimulus Theta and Time Decay 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...]

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...]

Small Caps (IWM) Hit Short-term Overbought Extreme – Potential Trade Ahead

New Credit Spread Options Strategy - Beta The window dressing that typically occurs during quarters end is in full effect. The Russell 2000 (IWM) has charged higher over the past four trading days and yet the 86/88 IWM put vertical that I sold is still well-positioned. At $82.90, IWM is still roughly 3.6 percent away from the short strike. I like this scenario. IWM has moved into an extreme overbought state and as a result I will most likely place a trade in the High-Probability, Mean-Reversion strategy tomorrow. IWM or another high-beta ETF will be the underlying of choice, if indeed a trade occurs. This should bring the IWM credit spread back to break-even with the potential of making some nice gains if a trade occurs and IWM … [Read more...]

High-Probability, Mean-Reversion Options Strategy Continues Success – Up 43.1% Since Inception

Quick Options Strategy Review The High-Probability, Mean-Reversion Options Strategy reaped another gain today. The successful trade pushed the strategy to a new high - +43.1% since its inception eight months ago. You can see the performance results for the High-Probability, Mean-Reversion options strategy here. The success has been incredible so far and I am nearing a limit to my newsletter. If you are indeed interested in my service please sign-up now to secure I spot. I want to keep a cap on subscribers for various reasons including manageable service and more importantly, keeping volume at a reasonable level on the options I choose for my trades. The first trade in my new Credit Spread Options Strategy is right where it started a … [Read more...]

Market Remains Range-Bound – Options Strategy Remains Patient

The anticipated bounce occurred today. However, I would not get overly excited because the rally could be short-lived. The S&P 500 ETF (SPY) gapped higher at the open today and never moved lower to close the gap. I would expect to see a close at $128.24 in SPY before the market is able to make any ground. We are already nearing an oversold state in my shortest-term indicators, so it could be a tough few days for the bulls. Although, as long as SPY is able to hold the March lows I think the market could be okay. When I say okay, I mean a move back near the top of the established trading range - $125-$137. If SPY pushed through strong support at the $125 level then I think we could se a waterfall decline that could take us as low … [Read more...]

High-Probability, Mean Reversion Options Strategy – Nasdaq 100 (QQQ) Hits Short-Term Extreme

The VIX is the hot topic right now among options traders. Most of us now know that last week marked the sixth straight decline for the S&P 500 (SPY). Yet, options traders are puzzled by the fact that the VIX (known among many as the "fear index") continues to struggle to push above 20. A push past twenty is viewed among many options traders as bearish for the market. However, there is a large contingency of options traders who view the lack of an accelerated move for the VIX as bullish. A reading below 20 means that investors are complacent as fear towards the current state of the market is low.  The bulls view the correction as short-lived and more importantly anticipated. I have to agree with the latter, because there are … [Read more...]