August 22, 2017

All it Takes is One Bad Trade

I came across a great article on the one bad trade syndrome. Several months ago, Slopers (Tim Knight’s Band of Followers), were privy to a real-life blow-up in which a trader essentially risked all of his trading capital on essentially one trade(disregarded the importance of position-sizing). I want to make sure that I never make the same mistake. Currently, my positions are teetering on max pain (stop-loss). My outlook remains with the pullback scenario that I have mentioned repeatedly the past few weeks – short-term bearish. Check out the article - All it Takes is One Bad Trade For those of you who have not been reading my posts the past several weeks, I have been reminding my loyal readers of the following: For several weeks 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...]

The Sign of A Bear Market?

I came across a very interesting statistic this afternoon from Jason Goepfert. "The S&P 500 has closed +/- 1% for 9 out of the past 10 and 13 out of the past 15 days.  Since the 1930s that has only occurred in November 1987 and October 2008." For those who don't know - both dates were near the beginning of some of the most violent downside moves in market history. Like I stated yesterday, I think the market, more specifically, the S&P 500 (SPY) will push to close the gap from 9/1/10. Again, 9/1/10. Until then, I will remain focused on keeping the returns of both options trading strategies growing. So far, the High-Probability, Mean-Reversion Options Strategy and the Theta Driver Options Strategy has three successful … [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...]

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...]

Responsible Options Strategies to Help You Navigate the Market

Professional options traders are a different breed. We take a statistical, mathematical, rational approach to the marketplace. We add another layer of probability and risk control that could not be possible with stocks alone. We make bets on things like volatility and don’t always care which way a stock or ETF moves. Everything we do is at least partially hedged, which reduces the need for Maalox, Prozac and most importantly heavy drinking, which many of my stock-trading buddies rely on almost daily. I run two options strategies. Two strategies that work for me and I try my best to teach them to anyone willing to listen. Why? Because it is important to me that options become a part of the everyday conversation among investors. I … [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...]

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...]