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 realize it’s a difficult concept for the options newbie to understand.

You see, it doesn’t pay for me to try and absorb every financial story out there. All I care about is when my indicators hit extremes. I allow probabilities, not the talking heads, to define my options strategies.

And this means that the strategy enters periods of stagnation. Trades should never be forced. A forced trade is not a statistically sound trade. Again, this market apathy is a long-term approach to options trading and should be expected if you wish to bring in profits over the long-term.

Boring? Maybe to the aggressive crowd out there. But, I am more interested in the profitable trades – not trying to be the short-term hero who trades every scenario out there. I am confident in trades that consist of short-term extremes that have entered the stock market – high-probability trades.

What is a high probability trade?

The High-Probability strategy is a short-term directional strategy that utilizes single calls and puts based on overbought/oversold extremes in the market. The strategy requires patience coupled with a disciplined approach. The strategy consists of approximately 2 to 5 trades a month with holding periods of 1 to 10 days, however; there will be some months when I make no trades..

Again, the key to this strategy is patience. Waiting for the appropriate scenario to trade with a high probability of success is what makes this strategy a success.  As I always say, opportunities are made up easier than losses. So if you let a few pass you by don’t dwell on what could have been. There will always be more opportunities around the corner. Remember, trading is a marathon not a sprint.

What About The Markets Right Now?

Just look at how many overbought to very overbought ETFs are in the market and you can quickly see why I expect to see a short-term reprieve over the next week. Typically, when we see a reading like the one we have now in most of the ETFs I follow a short-term pullback is to be expected. I already have a few positions on in both of my options strategies, but I am not hesitating to add more if the market tells me to do so. All I can do is trade probabilities as it is all we have as traders. If we gap up again tomorrow, I will most likely fade, fade fade. Remember, position-sizing is the key to long-term trading success so keep your size small and never trade too big. Trading too big will ultimately lead to failure.

If you haven’t already, don’t forget to sign-up for my :

Free Weekly Options Report

High-Probability, Mean-Reversion Options Strategy : Free 30-day trial

Theta Driver Options Strategy (limited room available): Free 30-day trial

?Twitter? Join Here.

Also, for those of you who live on Facebook. You can access my info there as well. Just click on LIKE.

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 how little he knew about how to effectively trade options. He actually asked me about how I used statistics to gain an advantage in my trading. This man has been in the industry as an editor for several major newsletter publications for nearly 15 years. 15 YEARS!

And yet, he doesn’t know how to create a trade with a probability of success of your choice – be it 70%, 80% or 90% chance of success.

He stated that using credit spreads does not work for the retail public. It doesn’t sell. It’s too complicated.

I could not believe what I was hearing. This man, who had no clue about the true advantages of credit spreads (like in our Theta Driver Options Strategy).

The general consensus in this business is that the the public is too stupid to place a credit spread. He told me that his marketing department told him not to use credit spreads in their options services.

Why? Because according to him, lots of lottery-ticket gambles are more attractive to readers – and they help create a portfolio of huge winners. He didn’t mention that it also creates lots of big losses. And it might be that it’s easier to sell a newsletter when you can promise lots of chances for big gains.

But that is not my goal as the editor of an options service. I want to educate anyone willing to listen how to effectively trade options like the professionals do. And that does not mean creating more complicated strategies – it means keeping them as simple as possible.

I do not tout outlandish gains. I only try to bring to you the best strategies that I know.

The strategies that floor traders use.

The strategies that create real statistical advantages.

And then I try to incorporate risk-management techniques as well. He actually scoffed at that as well.

If you want an options strategy with a gambling mentality then you certainly have your pick. There are probably dozens of them in your email inbox right now. But I am not a gambler and therefore I do not offer daily trades with no statistical advantages.

I am a realist. I realize there is no holy grail in trading. However, one thing I do know for certain is that I have found several unique and concrete strategies that make a world of sense to me and I trade them to make serious money over the long-term. Furthermore, I realize that the less I trade, the better my strategies will perform over the long run: And the long run is what matters. This is what makes my strategies unique and so far, successful.

If you haven’t already, don’t forget to sign-up for my :

Free Weekly Options Report

High-Probability, Mean-Reversion Options Strategy : Free 30-day trial

Theta Driver Options Strategy (limited room available): Free 30-day trial

?Twitter? Join Here.

Also, for those of you who live on Facebook. You can access my info there as well. Just click on LIKE.

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 break-even or possibly, yes possibly a slight gain for the month. The chances for the latter or not likely, but that is okay. This is a long-term strategy and the occasional losing month is expected. Remember, this is a marathon and not a sprint.

As for the Theta Driver Options Strategy it continues to chug along nicely. I am enthused by the wave of reviews by all of you. I still have a few spots left so if you are interested give it a try. It is free for 30 days. What do you have to lose?

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.

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.

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.

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 underlying IWM to a high of $85.97, only a few cents from touching the 86 strike. This is where asset allocation/ position-sizing comes in. I could go over various adjustments that I could make including opening new positions, exit the trade early, roll the trade up or forward and a few others. But, I prefer to let the statistics play out. I know that if I stay disciplined and allow the statistics to work for me I will succeed over the long-term.

Never allow a position take to have a dramatic impact on your options portfolio. This frees you of the inevitable psychological constraints and allows you to focus on letting the probabilities to work themselves out.

Basically, when probability is on your side, it only makes sense to allow the probabilities to work for you. Entering expensive or risky hedges or artificial stop losses act only as a detriment because they do not allow the probability of the trade to work itself out.

The Strategy

Again, I like my new strategy because now both of my options strategies are working in unison. I am able to collect premium in the Credit Spread strategy while patiently allowing time decay to works its magic. And, while I allow the time decay to eat away at my credit spread I am able to play short-term extremes in the ETFs I follow in the High-Probability, Mean-Reversion strategy. Intermediate and short-term options strategies at work.

Just like diversifying a portfolio of stocks, you should do the same when investing with options – diversify your options strategies.

Here it is: the first trade in my new Credit Spread Options Strategy, officially named Crowder’s Credit Spreads. I will continue to go over the trade in full detail in the Free Weekly Options Report.

Market Mumbo Jumbo

• Daily Options Report

Summary

SPY remains range-bound!

Same message: Not much has changed over the past few weeks - range-bound trading persists. I appears we could see the markets move sideways for a few more months. Are the summer doldrums already upon us? How long can SPY stay in this range of roughly $126 to $137? The question is, while I continue trading extremes in the HPMR strategy , how can I take advantage of the range bound movement at the same time. You guessed it – a credit spread! I will discuss this further in Weekly Options Report.

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.

Options Strategy Indicator – Overbought / Oversold Extremes

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 moves lower into a neutral state.

Again, I like this scenario because now both of the options strategies are working in unison. I am able to collect premium in the Credit Spread strategy while patiently allowing time decay to works its magic. And, while I allow the time decay to eat away at my credit spread I am able to play short-term extremes in the ETFs I follow in the High-Probability, Mean-Reversion strategy. Intermediate and short-term options strategies at work.

Just like diversifying a portfolio of stocks, you should do the same when investing with options – diversify your options strategies.

Here it is: the first trade in my new Credit Spread Options Strategy, officially named Crowder’s Credit Spreads. I will continue to go over the trade in full detail in the Free Weekly Options Report.

Market Mumbo Jumbo

• Daily Options Report

Summary

Same message: Not much has changed over the past few weeks - range-bound trading persists. I appears we could see the markets move sideways for a few more months. Are the summer doldrums already upon us? How long can SPY stay in this range of roughly $126 to $137? The question is, while I continue trading extremes in the HPMR strategy , how can I take advantage of the range bound movement at the same time. You guessed it – a credit spread! I will discuss this further in Weekly Options Report.

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.

Options Strategy Indicator – Overbought / Oversold Extremes

High-Probability, Mean-Reversion Options Indicator

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 few days ago. Again, I will be going over the trade in full detail in the Free Weekly Options Report this weekend. Stay tuned.

Market Mumbo Jumbo

The market gapped significantly lower at the open on news that the Obama administration and the IEA were going to dip into the Strategic Reserves. The global effort would add 60 million barrels to the market, with over 30 million barrels coming out of the United States. It is the first time since Hurricane Katrina and only the third time the IEA and the U.S have joined together to release barrels to market.

The announcement helped to push oil and oil related stocks significantly lower. That is, until late in the afternoon when news that Greece would be rescued by the EU under a five year austerity plan. The market spiked higher after the news and as it stands the futures are higher. The bulls are back, but for how long?

Options Indicator – Overbought – Oversold

None of the ETFs I follow in the High-Probability, Mean-Reversion Indicator have moved into a short-term extreme.

You can see all of the performance results for the High-Probability, Mean-Reversion strategy here.

Daily Options Links of Interest

• Bullish Options on Oracle
• Options Traders Bullish on L-3 Communications
• Surge in Crude Oil Options

Summary

Same message: Not much has changed over the past few weeks - range-bound trading persists. I appears we could see the markets move sideways for a few more months. Are the summer doldrums already upon us? How long can SPY stay in this range of roughly $126 to $137? The question is, while I continue trading extremes in the HPMR strategy , how can I take advantage of the range bound movement at the same time. You guessed it – a credit spread! I will discuss this further in Weekly Options Report.

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.

High-Probability, Mean-Reversion Options Indicator

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 as  $118 in SPY.

Options Indicator – Overbought – Oversold

All of the ETFs I follow in the High-Probability, Mean-Reversion Strategy have moved back into a short-term neutral state. With that being said, I will be patiently waiting on the sidelines until an ETF moves into a short-term extreme. Patience is by far the hardest aspect of trading. Inherently trading is exhilarating so it makes perfect sense to want to do it as frequently as possible. Unfortunately, that goes against the main goal of any strategy which is to make money. Wait, wait, wait and then pounce on a high-probability opportunity. That is how money is made trading – at least if you have a long-term approach to creating and more importantly accumulating wealth.

As for the following I guess I can’t reiterate my sentiment enough.

I do find it interesting that over the years, when these lulls do occur that some subscribers flee. They want action. The are too short-sighted by the the excitement of trading options. Believe me, we have all been there. If they could only realize that patience coupled with sound risk-management is what makes an options strategy successful.

Remember, CASH IS A POSITION.

You can see all of the performance results for the High-Probability, Mean-Reversion strategy here.

Daily Options Links of Interest

• Seventh Straight Week Of Losses?
• Options in Focus -VIX
• The Challege – Finding Stock Options Strategies that Will Reap Profits Over the Long-Term

Summary

Same message: Not much has changed over the past few weeks - range-bound trading persists. I appears we could see the markets move sideways for a few more months. Are the summer doldrums already upon us? How long can SPY stay in this range of roughly $126 to $137? The question is, while I continue trading extremes in the HPMR strategy , how can I take advantage of the range bound movement at the same time. You guessed it – a credit spread! I will discuss this further in Weekly Options Report.

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.

High-Probability, Mean-Reversion Options Indicator

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 some true short-term extremes in the market including the equity put/call ratio, Nasdaq TICK, Up Issues Ratio, Up Volume Ratio, Stock/Bond Ratio, AAII Sentiment Survey – the list goes on.

With that being said, I would prefer to see another spike lower or capitulation to place the first credit spread in the HPMR credit spread options strategy. Stay tuned!

Options Indicator – Overbought – Oversold

The tech-heavy Nasdaq 100 ETF (QQQ) has reached a short-term oversold state. If the index ETF opens lower tomorrow there could be a potential trade in the HPMR options strategy. I love trading the QQQs for various reasons and I absolutely love the set-up right now. The options strategy has been patiently waiting a nice opportunity to extend the gains. Hopefully, tomorrow will be the day. Let’s see what the indicators tell us morning.

As for the follwing I guess I can’t reiterate my sentiment enough.

I do find it interesting that over the years, when these lulls do occur that some subscribers flee. They want action. The are too short-sighted by the the excitement of trading options. Believe me, we have all been there. If they could only realize that patience coupled with sound risk-management is what makes an options strategy successful.

Remember, CASH IS A POSITION.

You can see all of the performance results for the High-Probability, Mean-Reversion strategy here.

Daily Options Links of Interest

• One Way to Play A Rising VIX
• Options Strategists Eyeing 20 on the VIX
• Watch Tutorial  - Options Sizzle Index

Summary

Same message: Not much has changed over the past few weeks - range-bound trading persists. I appears we could see the markets move sideways for a few more months. Are the summer doldrums already upon us? How long can SPY stay in this range of roughly $126 to $137? The question is, while I continue trading extremes in the HPMR strategy , how can I take advantage of the range bound movement at the same time. You guessed it – a credit spread! I will discuss this further in Weekly Options Report.

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.

High-Probability, Mean-Reversion Options Indicator