Estratégia de opções semanais vxx

Vxx estratégia de opções semanais.
O VXX está negociando entre 3 e 3: como as opções funcionam; Noções básicas de opções: este comércio é um risco limitado, estratégia limitada de lucro. E com a volatilidade do mercado explodindo ainda mais esta semana, muitos agora estão se perguntando o que está por vir. Primeiro, ele se chama VXX. Assista às opções da Chuck Hughes para negociar vídeo de educação para saber mais sobre negociação de opções semanais e começar a negociar opções semanais agora. Eu assisto os 78 minutos, diariamente, semanalmente.
Vídeo por tema:
VXX Ratio Spread Backratio Option Strategy.
7 Respostas para & ldquo; Vxx estratégia de opções semanais & rdquo;
Como funcionam as opções e as chamadas.
Muitas vezes, os comerciantes fazem seus negócios no trabalho, no almoço ou na noite.
Nesse caso, a estratégia de opções chamada urso colocou-se espalhada.
Nossos editores revisaram as principais corretoras para negociação de opções em 2018.
Os bots de negociação são programas de software que falam diretamente de trocas financeiras.
Troca de opções - Você já ouviu falar sobre opções binárias, mas tem medo de pedir agora.
Dando uma olhada na popularidade do carry trade em forex.

estratégia de opções semanais Vxx
VIX Futures Dados para negociação VXX, XIV, VXX Rollly Weekly Rendimento No início de dezembro, fizemos uma segunda estratégia para negociar VXX e XIV disponíveis para o nosso. Receba um e-mail Daily Update com atualizações para nossas posições atuais e análises de mercado semanais. Todos os negócios são executados com MOO (marketonopen) ou MOC (marketon. Opções de negociação para retornos consistentes é Option Spread Strategies é o principal site orientado para a estratégia quando se trata de Opções comprovadas Estratégia Home; FAQs. Então, como você pode ganhar dinheiro com o VXX com opções? Dicas de Terry thinkorswim VIX Volatility VXX Weekly Options Weekly vs. Se você está interessado em aprender a fazer negócios de opções com o VXX, então este tutorial é para você. VXX 11 de dezembro Os spreads semanais aumentaram em 2 blocos no CBOE. Trading VXX Can Be Muito lucrativo. Existem boas razões pelas quais a negociação do iPath SP 500 VIX ShortTerm Futures ETN (VXX) é extremamente popular. As opções VIX semanais agora estão sendo negociadas no CBOE e são ótimas. As novas opções semanais VIX são ótimas para vendedores de volatilidade. VXX ou algum outro. Os comerciantes podem aprender a estratégia básica para negociar opções semanais aqui: VXX: iPath SP 500 VIX Agora que você conhece opções semanais. Nossa estratégia de opções é projetada para alcançar o potencial acumulado ao contrário, evitando as perspectivas a longo prazo que você enfrenta simplesmente comprando o ETP. Esta não é uma estratégia de negociação de opções per se; mas sim uma estratégia para o oposto: próprio VXX, porque o mercado é de baixa, o VIX está aumentando. Se você estiver usando as opções do VXX, algumas maneiras são mais baratas do que outras. Esta é uma coluna semanal que se concentra nas opções da ETF por Scott Nations, um comerciante proprietário e. Se você não tiver uma estratégia usando o VXX In para usar o VXX como uma estratégia de lucro. O VXX pode ser usado para usar opções semanais de hedge. Se você estiver usando as opções do VXX, algumas maneiras são mais baratas do que outras. Esta é uma coluna semanal que se concentra nas opções da ETF por Scott Nations, um comerciante proprietário e. Eu também posso admitir isso na frente: as opções semanais são uma das minhas inovações favoritas em muitos anos e os semanais VXX tornaram-se um dos meus negócios preferidos. Exposição do VXX: Compreensão da Volatilidade Contango e Time Decay. Short VXX Call Options, Existem muitas falhas nesta estratégia e artigo. Como se os caprichos de VIX fossem suficientes, um comerciante de opções é um destino tentador vendendo peças da VXX. Esta é uma coluna semanal que se concentra nas opções da ETF por Scott Nations. Finalmente, um Sistema de Negociação comprovado para Opções Semanais que Consistentemente Entregue Resultados. Consulte a página Registro de trilha para detalhes completos. 12 de julho de 2017 0 Chris Butler of Projectoption. Opções Tribe para discutir seu ponto de vista sobre o comércio da volatilidade popular. Path SP 500 VIX ShortTerm Futures ETN VXX Stock Message Board: [colordarkblueThe Weekly Options News Roundup [color Saiba mais sobre futuros e opções da VIX Weeklys, incluindo detalhes do produto, gráficos e muito mais. Com o VIX surgindo recentemente, fundos como o REX VolMAXX Long VIX Weekly Futures Strategy ETF (BATS: VMAX) valem a pena investigar os investidores que procuram algum VIX negativo em relação ao sexto, investir no VXX é essencialmente equivalente à exposição ao rolamento diário longo Usando A Estratégia de opções semanais no IPath SP. InvestorsObserver Weekly aprenda sobre estratégias em opções VIX. Cada discussão inclui um exemplo hipotético para ilustrar a possível estratégia. ByQuoth the Raven: iPath Short Term VIX Futures ETN (VXX) é um dos títulos mais negociados com curiosidade na rua, e é um que eu estou defendendo o curto-circuito. Taxa de opções de contagem semanal Diversão com números: revisitando o comércio VXX e XIV. As opções semanais SP atualmente representam cerca de um terço desse volume de opções de índices. Como os mensais VIX, SPDR SP 500 ETF e VXX. Consulte a página Registro de trilha para detalhes completos. Path SP 500 VIX ShortTerm Futures ETN VXX Stock Message Board: [colordarkblue The Weekly Options News Roundup [color VXX Weeklys Begin Trading Tomorrow (NYSE: VXX) As opções semanais são o novo filho no bloco e algo que eu pulou no início e tenho implementação de estratégia . Negociação de Derivados VIX: Estratégias de Negociação e de Cobertura Usando Opções Semanais e Opções de Índice do VIX 63. Opções consistentes de negociação de renda: VXX e UVXY em Uma estratégia, muitas vezes considerada é e como gerar opções consistentes de negociação de renda semanal, vá para. Volatility Trading Made Simple E que traça o valor de fechamento diário dos negócios do VXX Weekly Roll usando a estratégia VXX curta está entre. Caminho SP 500 VIX Futuros a curto prazo ETN (VXX) Cadeia de opções Obtenha cotações de opções de ações gratuitas, incluindo cadeias de opções com chamadas e preços de colocação, visíveis até a expiração. Disqus Vxx Weekly Options Strategy No início da semana passada, escrevi um artigo sobre a geração de lucros semanais com estoques estagnados ou ETFs usando uma "borboleta longa colocada" espalhada aqui em Seeking Alpha. Você OBJETIVO Nossa estratégia única oferece alertas e idéias comerciais quatro vezes por mês, especializando-se em opções semanais. O objetivo principal é o retorno positivo em um. OAP 068: Índice VIX Como negociar a volatilidade w Mark Sebastian da OptionPit da negociação VXX? A partir de opções detalhadas, as páginas de estratégias de opções. Os Riscos de Créditos Semanais de Crédito Por Kim. A negociação de opções semanais de curto prazo continua a ser uma estrada difícil em 2018, uma vez que a volatilidade semanal do mercado está atacando o VXX) é. Cadeia de opções atualizadas para Barclays Bank PLC iPath SP 500 VIX ShortTerm Futures ETN incluindo cadeias de opções VXX com preços de chamada e colocação, visíveis por data. Infelizmente, esta estratégia raramente funciona bem. As opções VXX expiram na sexta-feira para Weeklys ou sábado no mesmo dia que a maioria das opções do equityETF. Estratégias de Forex algorítmicas e mecânicas OneStepRemoved trading the VXX com base em sinais da estratégia semanal VXX: 1) sendo VXX curto. SPY ETF PUT Stratégia de cobertura (SPY) Stanley Black Decker Stock (SWK) Sun Life Financial Stock (SLF). Usando ZIV, VXX, Estratégia de volatilidade inversa de termo. Assista às opções da Chuck Hughes para negociar vídeo de educação para saber mais sobre negociação de opções semanais e começar a negociar opções semanais agora. O nosso melhor blog de negociação de opções classificadas em educação de opções (usando opções semanais), VXX) é referido como. VXX Weekly Options StrategyDow 13, 000! Os mercados continuam a avançar ainda mais diante de relatórios econômicos menos que encorajadores com o Dow terminando o dia apenas. Configuração para o ponto VIX com opções VXX. Esta é uma coluna semanal focada nas opções da ETF por Scott Nations, Nações examina a estratégia de opções subjacente. Para uma "suspensão suave" de uma estratégia sem perda, ajuste a margem para zero que não. Treze coisas que você deve saber sobre as opções de negociação VIX.
Galeria de vídeos "Vxx Weekly Options Strategy" (678 filmes):
Usando uma estratégia de opções semanais no IPath SP.
A REX VolMAXX Long VIX Weekly Futures Strategy, decidimos executar o cumulativo PL de longos VXX usando a mesma lógica que nas Opções XIV. Opções de queda de VXX definidas para decolar em 2018. Negociações de baixa, como colocar e colocar spreads, no iPath SP 500 VIX a curto prazo de negociação de notas de intercâmbio (VXX. Tutoriais sobre a ação de preço Estratégias de negociação Forex. Idéia de negócios semanais Gráfico técnico são funcionários, diretores ou colegas. Global ETF Strategy Weekly Global ETF Commentary as opções podem incluir trabalhar com IP VIX S ETN VXX 6. Path SP 500 VIX Short Term Futures TM ETN (: VXX) Estratégia Sessão 20 de junho, VXX longo 18 semanais. Novos ETNs Permitir que você compre Volatilidade: VXX, VXZ. Ron Inscreva-se no boletim semanal Invest With An Edge Estratégia de Liderança de Mercado; Recomendamos. A opção de escolha de estoque Opções nunca compradas? Use nosso examinador de opções abrangentes e junte-se a grupos de discussão com outros. Os comerciantes também podem monitorize o progresso da VXX dentro do seu canal de preço diário, opções e índices com sabedoria nos dias, Estratégia de Negociação com a TradeStation. SEMANA PENNY STOCK MARKET RECAP FSAM 60 Segunda opção Binária s Estratégia. Nossos cursos de negociação de opções combinam a educação de alta qualidade e a pesquisa de estratégia exclusiva, acionável e atualizada em um pacote bem organizado. Opções Strategy Builders Sistema de negociação virtual (VTS) Um spread de urso consiste em comprar um put e vender outro put, em uma greve mais baixa. Compreender e negociar a volatilidade VIX da SPX derivada das opções em uma VXZ de compra ponderada e vender a VXX como a estratégia ideal para proteger. Jane's Weekly News Briefs Defense Jane's Weekly News Briefs Segurança Jane's Weekly News Briefs Air Forces Jane's Weekly News Briefs Land Forces. Pete Najarian, Ron Ianieri e nossa equipe de analistas sobre opções de negociação e mercado, produto financeiro, estratégia de negociação. O que é Diagonal Bull Call Spread? Veja explicações detalhadas e exemplos sobre como e quando usar a estratégia de negociação de opções Diagonal Bull Call Spread. A minha compreensão é que, recentemente, eles poderiam ter adicionado mais vencimentos usando opções semanais, como em uma curta estratégia VXX DailyTerm Análise e Recomendações de Negociação para os investidores diários em VXX. VXX: irá reverter acima das 20 opções binárias eCourse; Estratégia de negociação. Com a negociação de opções, você pode utilizar a opção mensal e semanal que consideraria essa estratégia. Opções de negociação, negociação de opções. Algumas observações sobre os futuros VIX e ETNs Marco Avellaneda Courant Institute, Universidade de Nova York Trabalho conjunto com Andrew Papanicolaou, NYURandon Engineering BiWeekly Webinars; PERGUNTAS FREQUENTES; Mad Day Trader. Curso de troca de opções; Almoço de estratégia. EUA; Conferência; Croácia; Inglaterra; (VXX) agosto de 2017. Muitos investidores evitam as opções que tentamos mantê-lo muito simples com apenas comprar chamadas SPY ou chamadas IWM ou o VIX coloca ou o VXX coloca uma rodada semanal. ZacksTrade não endossa nem adota qualquer estratégia de investimento particular, Weekly ETF Gainers Losers A Estratégia de Negociação de Chamadas Semanais para Bovinos Vivos, Ouro e Nikkei 05 de setembro de 2018; por: Stan Nabozny em: metais As opções de prazo mais longo disponíveis no VXX são as opções de janeiro de 2019. Com o VXX atualmente o Serviço de Opções de Negociação e Investimento para a estratégia mapeada. O Índice do Índice de Volatilidade CBOE (VIX) é um índice calculado pelo Chicao Board Options Exchange (CBOE) e projetado para medir. As opções em ETFs estão crescendo e, portanto, para vendas premium devido ao advento de opções de duração semanal e de curto prazo. Short Covered em VXX sobre uma posição curta em volatilidade via VXX. Sendo que ambos os VXX e as opções são chamadas decrescentes SPY semanais. Outra estratégia RSI simples, yay! Esta estratégia é aplicada no intervalo de 2 horas para o XIV (note que o último intervalo do dia é de apenas 30 minutos, e não de 2 horas. VXX VISÃO GERAL E VIX ShortTerm Futures ETN Ipath TOP NEWS Alertas de Estratégia de Negociação. QQQ sistema de troca de opções entregue pelo conservador sistema de negociação de opções para as opções QQQ e SPY. Estratégias efetivas de longo prazo. Clique aqui para solicitar sua cópia da Estratégia de Tendência do Tendência VXX hoje e seja um abaixo. É um exemplo de um gráfico semanal de. Ophir Gottlieb: VIX VXX A estratégia da opção maravilhosa que ganhou por oito anos consecutivos. Bem-vindo ao SVXY janeiro de 2018 Opções de início de negociação. VXX com base em sinais do VXX Weekly Roll. Estratégia de opções semanais Vxx; Estratégias de negociação de dia, taxas Forex xlt; taxas de câmbio interbancárias no Paquistão; Imposição fiscal de venda de opções de compra de ações ; 2017. Caro cliente da OptionMonster, a ETRADE Financial Corporation concluiu a aquisição da OptionMonster Media, LLC. Fizeste feliz negociação de spreads de crédito nas opções de índice por mais de quatro meses. Quando possível, crio um Condor de Ferro para aumentar o retorno sem o recurso especial do CBOE: SPXPM vs SPY Opções Russell Rhoads, Instrutor para o Instituto de Opções do CBOE, oferece uma visão exclusiva sobre as novas opções relacionadas ao SP 500. Como vender chamadas cobertas no VXX e o AGQ de duplos preços são opções premium? SITREP CLOSE SPx WO Trades, Open VXX Dbl Vert Trades Começar agora e aprender uma estratégia Scalp simples que funciona. Atualizado VIX ETP Landscape, incluindo o VMAX e o VMIN Agora que o recentemente lançado VolXXX Long Time VIX Weekly Futures Strategy ETF como VXX. Como Manipular o Preço de Liquidação VIX, a estratégia dependerá, portanto, de alguns ppl irão trocar opções em VXX e VXZ. Veja um resumo do mercado financeiro para a VXX, incluindo cotação do preço das ações, volume de negócios, volatilidade, volume de opções, estatísticas e outros dados importantes da empresa relacionados. Instantâneo para o IPATH SP 500 VIX FUTUROS A CURTO PRAZO ETN ETF (VXX), incluindo ETP que podem incluir contratos de futuros e outros derivados, como opções. Qual é a maneira menos arriscada de trocar por ganhar idade que estratégia de opções, foi negociado opções descobertas SEMANAL por 2 Eu faço a vida Opções de Negociação. Opções; Psicologia do investidor; VXX foi a estratégia certa até agora. Receba investir idéias de pesquisa e comercialização semanalmente. Cotações ao vivo, gráficos gratuitos e idéias comerciais de especialistas. O TradingView é uma rede social para comerciantes e investidores em mercados de ações e Futuros e Forex. VIX versus VIX ou VXX real, 2) a volatilidade do VXX diz algo sobre o subjacente e, portanto, o real. REX VolMAXX Short VIX Weekly Futures Strategy ETF (VMIN) Adicionar a como refletido nos preços das opções de SP 500 do nearterm. Nossa Estratégia Elliott Wave Theory Opções semanais Time Decay. Nossa estratégia usa a matemática das opções para identificar 70 probabilidades de sucesso SPYVXX. Usando uma Estratégia de Venda de Estruturas Seis Dicas para Opções de Venda. Algumas orientações a ter em mente ao vender opções de venda nua: Aviso de Aviso de Investimento U. Back Spread with Calls O espalhamento espalhado com chamadas é uma estratégia incomum. Veja uma lista de ações semelhantes ao iPath SP 500 Vix St Futures E (VXX) com base no setor, indústria, classe de ativos e outros critérios. Existem duas opções de curso, (dependendo da estratégia, Curvas anormais da Estratégia Semanal Simples de Stockscores. Opções semanais; Opções Binárias Principais 10 Dicas de Negociação de Opção. Isso é o que impulsiona muitos comerciantes de opções mais conservadoras da estratégia de compra. Volatilidade Jogue no retorno para a normalidade Recolha alguns prémios de gordura agora nesta volatilidade Opções da ETF que expiram Opções de expiração semanais e convencionais que expiram semanalmente e convencionais Ciclos de vencimento semanais e convencionais. Exemplos de opções Expiração Estratégia Exemplos. Opções semanais podem ser exercidas e atribuídas apenas Como qualquer outra opção. Opções semanais gratuitas, a nossa fórmula YieldBoost procurou a cadeia de opções VXX para o novo 29 de setembro ou a estratégia de investimento é adequada. VXX e suas opções relacionadas. efeito para a estratégia de curto prazo que uso. Descrição Aprenda a gere receitas consistentes e semanais diretamente do seu celular, seguindo ao longo do tempo, enquanto ganhamos dinheiro semana após semana. Pts Trading Por que a opção VXX é diferente de outras opções de baunilha simples? Opções de negociação Por que a opção VXX é diferente de outras opções de baunilha simples. No universo das opções, boletim semanal da IVolatility com estratégia de opções Nossos rankers e scanners cobrem praticamente todas as estratégias de opções. Webinars bissexuais; PERGUNTAS FREQUENTES; Mad Day Trader. VENDA Depois de negociar as opções de dinheiro ultrapassadas por menos de 50 anos. Opções de Escola de Armas e Opções Semanais Escolhe 165 por mês. Tal como o desenvolvimento de uma estratégia bem definida, ele RECOMENDOU NÓS COMPRAR OPÇÕES DE 30 DÍAS VXX PUT SPREAD. Opções; Holdings; Data histórica; Atuação; Esse nível de atenção da mídia em uma estratégia tem muitas vezes o maior ganho semanal desde dezembro de 2018. Opções básicas: como as opções funcionam; Opções básicas: tipos de opções; Opções básicas: como ler uma tabela de opções; conjuntos de opções agora expiram semanalmente. Melhores pior artistas semanais: ou uma recomendação ou endosso pela Fidelity de qualquer estratégia de segurança ou de investimento. Experimente a estratégia de Tom, em vez disso, as opções VXX correm o risco de contango. Eu tenho vendido chamadas nulas no UVXY semanalmente, o que é um acéfalo e fez uma fortuna. Momentum Trading: fornece-lhe estratégias simples de estoque e opções que são projetadas para torná-lo um comerciante bem sucedido. O Serviço de sinal de opção para negociação de opções de estoque e índice Sobre nós. Sobre nós Vídeo Você também pode ver suas opções A Metodologia PPT ganhou reconhecimento como sendo a principal estratégia de investimento e comercialização. Contango VXX ETF Opções Trading Double Seu investimento HISPEED DOWNLOAD Free 300 GB com Full DSLBroadband Speed. Como faço para calcular a volatilidade implícita ao usar o binômio Por que é a volatilidade implícita nas opções semanais do SPY? Como as opções de preços de alguém do VXX? Preço, Holdings, opções de longo prazo, como VIIZ, VMAX REX VolMAXX Longa VIX Estratégia de Futuros Semanais ETF LongTerm Os Gráficos de Mudança de XIV e VXX, comprar e manter, geralmente não são uma boa estratégia. Nível de prata inclui carta de pesquisa semanal. Veja explicações detalhadas e exemplos sobre como e quando usar a estratégia de negociação de opções de ferro borboleta. Aprenda a trocar Trade Trading Opções SPY usando Estratégia de Negociação Não Direcional Bookie. Melhor fonte de opções de notícias do mercado de ações que investem serviços no intervalo desde negociação de opções semanais até nossa categoria mais popular de produtos. O Options21 oferece opções de cursos de negociação sob a forma de uma estratégia de opções corretas, apoia o comerciante mais experiente com uma atualização semanal. Você provavelmente ouviu que a venda de opções de venda para renda é uma estratégia otimista ou mesmo neutra, melhor empregada quando o mercado está em uma tendência ascendente. Desempenho do índice para Chicago Board Options Exchange SPX Volatility Index (VIX), incluindo valor, gráfico, perfil de outros dados do mercado. Isso permite que você feche opções financeiras de curto prazo ou instrumento discutido nela ou se envolver em qualquer estratégia de investimento específica da ETRADE. Obtenha IPATH SP 500 VIX SHORTTERM ATR (Rácio Real Médio), Desvio Padrão, Desvio Relativo e Volatilidade Anualizada para VXX. Várias empresas de corretagem classificam opções sobre produtos de volatilidade REX VolMAXX Long VIX Estratégia de futuros semanais O CBOE lista opções no VXX. Imagem do blog: Leia mais sobre Am Vol Report VIX Expiration; Blog. Bloque estranho: uma revisão de papel passado: Estratégia Semanal Rundown VIX Opções: ADV 764k, VIX CallPut 3. Relatório PreMarket IV 2 de junho de 2017. 2 de junho (VXX) A opção de compra semanal de junho implícita volatilidade é de 54, mercado, produto financeiro , estratégia de negociação. Explicação de como comprar uma opção de chamada, incluindo como selecionar a opção de chamada certa e maximizar suas opções semanais; Opções binárias; Opções de estilo americano. ETF Spotlight no iPath SP 500 VIX ShortTerm Futures ETN (NYSEArca: VXX) e iPath SP 500 VIX MidTerm Futures ETN (NYSEArca: VXZ). Não tenho tanta certeza se esta é uma estratégia interessante para a maioria dos passatempos. Allan Trends Weekend Update 77. A vitória 100 VXX em meados de 2018 resultou em mais de um ganho de 500 em minhas opções de chamada VXX de longo prazo. Análise, Comentário, Educação e Recomendações Comerciais Específicas semanalmente. No seu 25º ano de publicação, o boletim The Option Strategist continua sendo um. MACD Weekly webinar ao vivo todas as terças O serviço Options Hunter usa preços complicados. Embora eu tenha uma estratégia que seja comprar algum índice VXX, os principais índices só oferecem opções mensais. Nos dias em que temos opções semanais. As opções fecham às 3: 15 horas centrais. VXX está negociando entre 3 e 3: 15 em torno de 35. Semanal 35 Melhores estratégias para opções binárias, estratégias de opções vxx, A melhor estratégia de opções binárias de 15 minutos, definitivamente as recomendaremos. Qualquer pessoa que experimente uma estratégia reversa de lizard de jade no VXX neste VXX baixo não é garantida para cair semanalmente. Renda simples de opções semanais Se você Para fazer funcionar esta estratégia, você precisa de baixas comissões e uma conta de pelo menos 10 000. Vídeo incorporado Quando as opções de negociação, um dos conceitos mais difíceis para aprendizes iniciantes é a volatilidade, e especificamente COMO COMERCIALIZAR VOLATILIDADE. Opcional Trading Trading descrito abaixo no VXX ETF. Question Covered Call estratégia para a semana de volatilidade (com VXX) e compraria um semanário OTM chamada futuro e opções VXX são opções no diário. Um VIX Hedge usando esta estratégia de opções. Craig Jones, Weekly ETF Gainers Perdedores Inscreva-se para alertas por e-mail no VXX. Deixe-me apresentar o que penso ser o pior investimento no mundo: VXX. SP 500 em The Worst Investment in the World. Q1 2018 XIV VXX Trading Results. A primeira semana de 2018 foi a maior queda semanal para o SP 500 para abrir um novo calendário XIV VXX Trading Strategy. O Inside Wire é um webinar ao vivo semanal fornecido pelo nosso Diretor de cada fio interno cobre uma estratégia ou tópico comercial específico. As opções semanais são as mesmas que as opções mensais, exceto que expiram todas as sexta-feira, e não apenas no sábado após a terceira sexta-feira. Opções de sinais comerciais de um treinador ao vivo com 10 anos de experiência; Opções de negociação com precisão a laser. Aprenda minhas estratégias de negociação de opções e sistema de negociação. A reversão média diária dificilmente foi uma boa estratégia no comércio primário testado que estava passando por VXX em uma base semanal, se (gorjeta para Volatility Futures and Options). Shorting VXX com proteção de bloqueio. Estratégia Momentum. Recebemos muitas perguntas sobre chamadas cobertas semanais versus chamadas cobertas mensais. A questão básica é: qual é. Então você quer trocar opções semanais? Eu posso comprar 100 ações da VXX segunda-feira de manhã e vender uma no dinheiro. Existem aspectos positivos e negativos para cada estratégia. Conceitos e estratégias fundamentais. Para Volatilidade de Negociação ETPs CONCEITOS FUNDAMENTAIS E ESTRATÉGIAS PARA NEGOCIAÇÃO Observe que o rendimento semanal do rolo VXX é. Quando falamos com os nossos clientes, um dos seus maiores medos ao aprender como trocar opções é obter estoque atribuído (por exemplo, lembre-se, quando você compra uma opção. Opções Ferramenta de Estratégia Adicionando Outras Aplicações. Códigos de ativos, intervalos de datas, frequências de amostragem (diariamente, Semanalmente, mensalmente) são especificados pelo usuário. Opções de ações semanais Opções de ações semanais Lee Finberg explica estratégias de opções semanais válidas VXX iPath SP 500 VIX ShortTerm FT ETF Estratégia de conta padrão com 500 opções de troca de mercado por Chris VXX 21 Coloque 2. Leitor Jeff Partlow passou pela questão de saber se as opções nos Fundos ExchangeTraded (ETF) são os contratos da Seção 1256, que se qualificam para 60 a longo prazo e 40 curtos. VXX Naked Put Strategy Alan ensina a investir com opções e a abordagem é sólida. Vejo os 78 minutos diariamente Semanalmente. O VXX é um dos muitos fundos que o VIXY da ProShares é um ETF honesto que detém as primeiras e segundas opções VIX. REX VolMAXX Long VIX Weekly Futures. O saldo de A seção examina opções novas e existentes também expandiu o componente de opções do boletim informativo para incorporar a mudança semanal é 5. Ophir Gottlieb: VIX VXX A estratégia da opção que ganhou por oito anos consecutivos. Instrutor The Options Institute. Estratégia de Liquidação de Opções VIX. Produtos negociados em bolsa VIX (VXX) 2018 GVZ Trading. Como posso saber quando eu vou ser designado? Opções Estratégia Construtores; Negociação virtual. Publicações sobre VXX escritas por Simon Maierhofer. O VIX (NYSEArca: VXX) VIX, VXX Weekly ETF SPY. Artigo de Staff intitulado VXX 30 de outubro, opções de início de negociação, sobre opções de estoque, da Stock Options Channel. Opções VXX O VXX agora tem opções Outra estratégia seria comprar uma posição completa em 1. UNG Weekly. Ouro, petróleo bruto, milho, soja e mais com tantos produtos negociáveis, o mercado de opções de futuros é um lugar intimidante. Como você pode manter t? Você vai ouvir a estratégia da Sarahs apenas trocando opções semanais em ações populares ou populares em oposição às opções de negociação mensais UVXY VXX TVIX 101. VIX Trader Trading System É Esta entrada foi postada no VIX Trader e marcada comprar VIX Trader Trading Sistema, estratégia de melhores opções, compre opções mais simples. Jogue o VIX (VXZ ou VXX) por Brandon Clay 2 de setembro de 2009 A mensuração da volatilidade é especialmente importante para as opções Assine o Invest With An Edge semanalmente. Ferramentas analíticas de opções de estoque para investidores, bem como acesso a um boletim semanal histórico atualizado diariamente com idéias de estratégia de opções. BetterBeta Trading's Trend Program é um programa completo de negociação de opções direcionais projetado para opções de varejo Trend Service Strategy BetterBeta Trading. A primeira semana de 2018 foi a maior queda semanal para o nosso sistema e aqui em Volatility Trading Strategies capturou a estratégia de negociação VXX. Opções para Rookies Opções Educação para o indivíduo Eu me pergunto se você poderia comentar sobre esta estratégia? Respostas à venda de opções de índice nuas. Mais de 82 rendimentos semanais médios com apenas duas transações por semana. Saiba como dia comercial as opções semanais SPY usando nossas estratégias exclusivas, na nossa sala de negociação ao vivo Nossas opções Produtos comerciais Como eu girei 13 000 para 425 000 em 4 na aprovação VXX Opções BOLT2 Estratégia Opções de inicialização Visão de estratégia semanal de salários REX VolMAXX Inverse Informações sobre o fundo de investimento VIX Weekly Futures Strategy ETF (VMIN). Saiba mais sobre o VMIN em Zacks. com Options21 Traders Group Este não é um curso de treinamento real, mas um serviço baseado em assinatura visou apoiar o comerciante mais experiente com uma atualização semanal. Bem-vindo ao Collective2 (vendendo e comprando parcelas de volta do VXX) No negativo: Caro. Pequena comunicação do autor, padrão (semanalmente ou bi. Video embeddedOptions Backtester para spreads de crédito verticais, spreads de débito, backtest sua estratégia Bull Put Spread através de dados de opções históricas e. Os usuários podem verificar todos os principais mercados norte-americanos em segundos para identificar estoques que se encontram Antes, eu também negociava opções de índice. Algumas outras pessoas usaram essas estratégias com VXX longo, agora estamos no modo theta e, aparentemente, reduzimos o delta semanalmente. Staff 8 de abril de incerteza ao investir com estratégia incorporada embutida no preço das opções SP500 negociando no mercado Chicago. Para maximizar o nosso ganho devido a theta, nós vendemos opções de curto prazo. VXX (2) PATRIMONENTOS INFERIORES (1 Sua Dose semanal de Opções de Ação. XIV e VXX return difference Portanto, tanto VXX quanto XIV como uma estratégia, o Credit Suisse pode emitir ETNs adicionais em um teste semanal de 3 dias GRATUITO para o nosso famoso Catálogo de Opções de Trocas de Opções! Confira nosso Blog de Opções de Estoque e Stock Forum! Experimente nossos Alertas de estoque do Twitter Privado também!

Posts Tagged & # 8216; VXX & # 8217;
40% possível em 2 semanas com um condutor de ferro?
Segunda-feira, 17 de abril de 2017.
A ideia de hoje envolve um Esoteric Exchange Traded Product (ETP) chamado SVXY. É um dos nossos subjacentes preferidos nas dicas de Terry & # 8217; s. As possibilidades são, você não sabe muito sobre isso, e não posso ajudá-lo muito nesta breve nota. Mas vou compartilhar um comércio que fiz neste ETP nesta manhã, e meu pensamento por trás desse comércio.
40% possível em 2 semanas com um condutor de ferro?
A melhor maneira de explicar como o SVXY funciona pode ser explicar que é o inverso do VXX, o ETP que algumas pessoas compram quando temem que o mercado esteja prestes a falhar. Muitos artigos foram publicados exaltando as virtudes do VXX como a proteção ideal contra um revés no mercado. Quando o mercado cai, a volatilidade (VIX) aumenta sempre, e quando VIX aumenta, o VXX quase sempre faz também. Não é incomum para o VXX duplicar o valor em um tempo muito curto quando o mercado é corrigido.
O único problema com o VXX é que, a longo prazo, é apenas a pior equidade que você poderia imaginar comprar. Ao longo dos últimos 5 anos, caiu de um preço dividido em vários milhares de dólares para o nível de US $ 18 de hoje. Cerca de cada ano e meio, um inverso reverso de 1 para 4 deve ser projetado no VXX para manter o preço alto o suficiente para incomodar com a compra. A última vez que isso aconteceu foi em agosto de 2018. Ele empurrou o preço de pouco mais de US $ 9 para cerca de US $ 40, e perdeu mais da metade do seu valor desde então.
Claramente, você só compraria VXX se você sentia fortemente que o mercado estava prestes a implodir. Na maioria das vezes, preferimos possuir o inverso do VXX. Isso é SVXY. Até agora, passou de US $ 90 para mais de US $ 140 em 2017, apenas para voltar a cerca de US $ 123 na semana passada, quando os receios geopolíticos surgiram e diminuíram um pouco o mercado, e ainda mais significativo para ETPs voláteis como VXX e SVXY, volatilidade ( VIX) aumentou da faixa de 11 a 13, onde passou a maior parte do tempo nos últimos anos até cerca de 16 hoje.
Quando VIX subiu e SVXY caiu na semana passada, aconteceu algo interessante. A volatilidade implícita (IV) das opções SVXY subiu rapidamente para quase o dobro do que era há um mês. Eu acho que esses preços de opções altas não existirão por muito tempo e gostaria de vender algum neste momento.
Ao invés de vender qualquer um ou ambos, coloca e liga nua (convidando a possibilidade de perda ilimitada), uma boa maneira de vender opções de alta IV é através de um spread de condor de ferro. Eu acredito que o SVXY, que negocia perto dos US $ 123, quando abriu esta manhã, é improvável que seja superior a US $ 135 ou inferior a US $ 95 em 11 dias quando as opções de 28 opções anteriores expirarem.
Esta é a propagação que eu executei nesta manhã:
Compre para abrir as chamadas # 28Apr17 140 (SVXY170428C140)
Vender para Abrir # 28Apr17 135 chamadas (SVXY170428C135)
Compre para abrir # 28Apr17 90 puts (SVXY170428P90)
Vender para abrir # 28Apr17 95 coloca (SVXY170428P95) por um crédito de US $ 1,63 (vendendo um condor de ferro)
Recebi US $ 163 por cada contrato que vendi, menos US $ 5 em comissões. Minha perda máxima é de US $ 500 menos a receita de $ 158, ou US $ 342. Se o SVXY terminar a qualquer preço entre US $ 95 e US $ 135 em 28 de abril, todas essas opções expiram sem valor e eu poderei manter meus $ 158. Isso resulta em um ganho de 46% para os 11 dias de espera.
Como com qualquer investimento, você apenas comprometeu dinheiro que você realmente pode perder. Eu gosto das minhas chances aqui, e eu comprometi um montante que não mudaria meu estilo de vida se eu perder.
Sexta-feira Negra: Como um spread VIX ganhou 70% em 3 semanas.
Sábado, 26 de novembro de 2018.
Na quarta-feira desta semana, um spread VIX que eu recomendava para pagar assinantes expirou após apenas 3 semanas de existência. Ganhou 70% sobre o investimento, e é o tipo de propagação que você pode considerar no futuro sempre que a VIX se disparar (geralmente temporariamente) fora de seu alcance usual devido a algum evento incerto próximo (desta vez foi a eleição que causou o VIX Espigão).
Além de informá-lo sobre este spread para que você possa colocá-lo em seu livro de possibilidades futuras, oferecemos uma oferta especial Black Friday - Cyber ​​Monday para incentivá-lo a embarcar em um grande preço de desconto.
Como um spread VIX ganhou 70% em 3 semanas.
VIX é a volatilidade implícita média (IV) das opções que são negociadas no estoque de rastreamento S & P 500 (SPY). É chamado de "índice de medo", porque quando os receios do mercado surgem devido a algum evento futuro incerto, os preços das opções se movem mais alto e empurram VIX. Na maioria das vezes, o VIX flui entre 12 e 14, mas de vez em quando, ele aumenta muito mais.
Pouco antes das eleições que ocorreram no dia 8 de novembro, a VIX subiu para 22. Recomendei aos meus assinantes pagadores que colocassem uma aposta de que a VIX voltasse abaixo de 15 quando as séries de opções que expiraram em 23 de novembro surgiram. Aqui estão as palavras exatas que escrevi no meu relatório de sábado de 5 de novembro:
"Quando o VIX subiu para acima de 22 nesta semana, enviamos uma nota especial descrevendo um spread de crédito de crédito vertical de baixa que geraria ganhos muito grandes se o VIX recuasse em direção à sua média recente de suspensão na faixa 12-14. Como você certamente sabe, você não pode realmente comprar (ou vender curto) VIX, pois é a volatilidade implícita média (IV) das opções SPY (excluindo os semanários). No entanto, você pode comprar e vender puts e chamadas no VIX e executar spreads apenas enquanto os lados longos e curtos do spread estão na mesma série de expiração.
You are not allowed to buy calendar or diagonal spreads with VIX options since each expiration series is a distinct series not connected to other series. If you could buy calendars, the prices would look exceptional. There are times when you could actually buy a calendar spread at a credit, but unfortunately, they don’t allow such trades.
Vertical spreads are fair game, however, and make interesting plays if you have a feel for which way you think volatility is headed. Right now, we have a time when VIX is higher than it has been for some time, pushed up by election uncertainties, the Fed’s next interest rate increase, and the recent 9-day consecutive drop in market prices. This week, when VIX was over 22, we sent out a special trade idea based on the likelihood that once the election is over, VIX might retreat to the lower 12-14 range where it has hung out most of the time recently. This is the trade we suggested:
BTO 1 VIX 23Nov16 21 call (VIX161123C21)
STO 1 VIX 23Nov16 15 call (VIX161123C15) for a credit of $2.60 (selling a vertical)”
This spread caused a maintenance requirement of $600 against which we received $260 for selling the spread. That made our net investment $340 (and maximum loss if VIX ended up above 17.60 on November 23 rd .
It worked out exactly as we expected. VIX fell to below 13 and both puts expired worthless on Wednesday. We pocketed the full $260 per contract (less $2.50 commission) for the 3 weeks. How sweet it is. We also placed the identical spread at this $2.60 price for the series that closes on December 28 (after the Fed interest rate decision has been made public). With VIX so much lower, we could close out the spread right now for $75, netting us a 51% profit. Many subscribers have reported to us that they have done just that.
And now for the special Black Friday – Cyber Monday special offer.
Black Friday/Cyber Monday Special Offer : As a post Thanksgiving special, we are offering one of the lowest subscription prices that we have ever offered – our full package, including several valuable case study reports, my White Paper , which explains my favorite option strategies in detail, and shows you exactly how to carry them out on your own, a 14-day options tutorial program which will give you a solid background on option trading, and three months of our Saturday Report s full of tradable option ideas. All this for a one-time fee of $69.95, normally $139.80 (not including bonus reports).
For this low-price Black Friday/Cyber Monday $69.95 offer, click here , enter Special Code BFCM16 (or BFCM16P for Premium Service – $199.95).
Se você está pronto para se comprometer por um período de tempo mais longo, você pode economizar ainda mais com nossa oferta de meio preço em nosso serviço Premium por um ano inteiro. This special offer includes everything in our basic service, and in addition, real-time trade alerts and full access to all of our portfolios so that you can Auto-Trade or follow any or all of them. We have several levels of our Premium service, but this is the maximum level since it includes full access to all nine portfolios which are available for Auto-Trade. A assinatura de um ano para este nível máximo custaria US $ 1080. Com esta oferta de meio preço, o custo de um ano completo seria de apenas US $ 540. Use the Special Code MAX16P .
Isto é uma oferta de tempo limitado. You must order by midnight Monday , November 28th, 2018. That’s when the Black Friday/Cyber Monday offer expires, and you will have to go back to the same old investment strategy that you have had limited success with for so long (if you are like most investors).
This is the perfect time to give you and your family the perfect Holiday Season treat that is designed to deliver higher financial returns for the rest of your investing life.
I look forward to helping you survive the Holidays by sharing this valuable investment information with you for our first ever Black Friday/ Cyber Monday Sale. Pode levar uma pequena tarefa de casa, mas tenho certeza que você vai acabar pensando que valeu a pena o investimento.
P. S. If you would have any questions about this offer or Terry’s Tips , please email Seth Allen, our Senior Vice President at seth@terrystips. Or make this investment in yourself at the Black Friday/Cyber Monday sale price – the first time this has been offered in our 15 years of publication – only $69.95 for our entire package. Get it here using Special Code BFCM16 (or BFCM16P for Premium Service – $199.95). Faça isso hoje, antes de esquecer e perder. This offer expires at midnight November 28th, 2018.
How to Make 40% With a Single Options Trade on a Blue Chip Stock.
Wednesday, November 9th, 2018.
Every once in a while, market volatility soars. The most popular measure of volatility is VIX, the so-called “fear index’ which is the average volatility of options on SPY (the S&P 500 tracking stock). By the way, SPY weekly options are not included in the calculation of VIX, something which tends to understate the value when something specific like today’s election is an important reason affecting the current level of volatility.
Today I would like to share with you a trade I recommended to paying subscribers to Terry’s Tips last week. We could close it out today for a 27% profit after commissions in one week, but most of us are hanging onto our positions for another couple of weeks because we still believe the spread will result in 75% gain for three weeks when the market settles down after today’s election.
I hope you can learn something from this latest way to benefit from an elevated volatility level in the market.
How to Make 40% With a Single Options Trade on a Blue Chip Stock.
As much as you might like, you can’t actually buy (or sell short) VIX, so there is no direct way to bet whether volatility will go up or down with this popular measure. However, you can buy and sell puts and calls on VIX, and execute spreads just as long as both long and short sides of the spread are in the same expiration series.
You are not allowed to buy calendar or diagonal spreads with VIX options since each expiration series is a distinct series not connected to other series. If you could buy calendars, the prices would look exceptional. There are times when you could actually buy a calendar spread at a credit, but unfortunately, they don’t allow such trades.
Vertical spreads are fair game, however, and make interesting plays if you have a feel for which way you think volatility is headed. Last week, we had a time when VIX was higher than it has been for some time, pushed up by election uncertainties, the Fed’s next interest rate increase, and the recent 9-day consecutive drop in market prices. When VIX was over 22, we sent out a special trade idea based on the likelihood that once the election is over, VIX might retreat. For the last few years, the most popular range for VIX to hang out has been in the 12-14 area. Obviously, this is a lot lower than last’s week’s 22-23 range.
If you look at a chart of VIX, you will see that it has moved above 20 on only 7 occasions over the past three years, and the great majority of time, it quickly retreated to a much lower level. Only once did it remain over 20 for more than a couple of weeks or so. Back in 2008, VIX moved up to astronomical levels and stayed there for several months, but if you recall those days, with the implosion of Lehman Bros., Long Term Capital, and bank bailouts all around, there was serious fears that our entire financial system might soon collapse. This time around, it seemed like the most fearful consideration was the American election, and specifically that Donald Trump might win and market uncertainty would surely soar even further. This does not feel like the cataclysmic possibilities that we were facing in 2008.
This is the trade we suggested, based on our assumption that Donald Trump would probably not prevail and not much different would happen out of Washington going forward:
BTO 1 VIX 23Nov16 21 call (VIX161123C21)
STO 1 VIX 23Nov16 15 call (VIX161123C15) for a credit of $2.60 (selling a vertical)
This spread involves an investment (and maximum risk) of $342.50. There is a $600 maintenance requirement (the difference between the strike prices) from which the $260 received less $2.50 commission or $257.50 must be deducted. If VIX closes at any number below 15 on November 23, both calls would expire worthless and this spread would make $257.50 on the maximum risk of $342.50, or 75%.
Maybe 3 weeks was not a long enough time to expect VIX to plummet back to 15. An argument could be made that it would be better to wait until after the Fed’s December rate decision has been made, and place this same spread in the 20Jan17 series. The price (and potential gain) would be about the same (I have sold this same spread in that series in my personal account as well). Of course, you have to wait 2 ½ months for it to come about, but 75% is a sweet number to dream about collecting in such a short time.
Since we placed the above spreads a week ago, VIX has fallen from 23 to a little over 18 today (apparently when the FBI exonerated Hillary, it looked less likely that Trump would win). It only needs to fall a little over 3 more points after the election today to deliver 75% to us on November 23rd. We like our chances here. Some subscribers are taking their gains today, just in case Mr. Trump gets elected. They can buy the spread back today for $1.65, well below the $2.60 they collected from selling it. I am personally holding out for the bigger potential gain.
Calendar Spreads Tweak # 1.
Quinta-feira, 1º de setembro de 2018.
This week we will continue our discussion of a popular option spread – the calendar spread which is also called a time spread or horizontal spread. Vamos verificar a viabilidade de comprar spreads a diferentes preços de exercício em um esforço para reduzir o risco.
Primeiro, vejamos um calendário típico no Facebook (FB). Na sexta-feira passada, quando a FB estava negociando cerca de US $ 124,20, compramos as chamadas de 20Jan17 de 5 meses e vendemos chamadas de um mês para 30 segundos. O spread custaria US $ 5,43 (US $ 543), e esse é o aspecto do gráfico de perfil de risco:
Face Book Risk Profile Maio de 2018.
Note-se que o intervalo de equilíbrio se estende de cerca de US $ 3 na desvantagem para US $ 5 no lado positivo, uma faixa de US $ 8. (A perda ou ganho quando as chamadas curtas expiram em 30 de setembro é indicado na coluna à direita intitulada "P / L Day.") O ganho máximo é precisamente no preço de US $ 125, e é cerca de US $ 150, o que resultaria em um bom ganho de 27% para o mês.
Next, I tested whether I could expand the break-even range by adding the same calendar spread at the 120 and 130 strike prices (the 20Jan17 series only offers strikes at $5 increments, unlike the weekly series). O spread de 120 custaria US $ 464 e o spread de 130 seria de US $ 483, então comprar os três spreads envolveria um investimento de cerca de US $ 1500. Aqui está o aspecto do gráfico de perfil de risco para os três spreads:
Face Book Risk Profile 2 September 2018.
Note that the break-even range is almost exactly the same with the three spreads. The maximum gain is also about $150, but with three spreads, it would mean a 10% gain rather than a 27% one because you would have about $1500 invested rather than $543. Claramente, adicionar spreads de calendário em greves de US $ 5 acima e abaixo do preço atual da ação não é o caminho a seguir - sobre triplicar o investimento, o mesmo ganho máximo esperado e sobre o mesmo intervalo de equilíbrio.
Presumivelmente, você está negociando calendários em um estoque que você acredita que está indo mais alto. Você pode optar por comprar um calendário no dinheiro e um segundo em uma greve mais alta. Se você fizer isso, seu investimento é de cerca de US $ 1000 e este é o gráfico de perfil de risco:
Perfil de risco do livro de rosto 3 de setembro de 2018.
O intervalo de equilíbrio é mais uma vez cerca de US $ 8 do ponto mais baixo para o mais alto, mas ele se estende um pouco mais de um dólar à desvantagem e US $ 7 na parte superior. Se você é otimista no estoque, isso parece ser um melhor caminho a seguir. O ganho máximo é de cerca de US $ 150 novamente, e isso resulta em um ganho de 15% no mês. A melhor coisa sobre essa escolha de dois spreads é que o ganho máximo pode ser alcançado em uma faixa de 5 pontos em vez de estar disponível apenas em um ponto de preço preciso.
Outra estratégia pode ser comprar o spread do calendário 125 e depois esperar para ver de que forma o estoque se move, e depois comprar outro calendário nessa direção. Como vimos, o custo de um calendário no dinheiro não é muito maior do que o mesmo calendário, que é de US $ 5 do dinheiro. The big risk with this strategy is that the stock might whipsaw. Por exemplo, pode cair $ 3, o que pode levá-lo a comprar um calendário de 120 e, em seguida, atirar mais alto, indo até US $ 128, o que pode fazer com que você adicione um novo spread na greve 130.
Como de costume, não há maneiras fáceis de garantir ganhos neste mundo. A melhor opção parece ser assumir uma posição em que o estoque é dirigido em uma determinada direção (geralmente até a menos que você esteja negociando em algum ETP que esteja destinado a diminuir, como VXX) e combinar um spread no dinheiro com um com um preço de ataque mais elevado. A maioria dos meses você deve fazer um ganho significativo se o seu estoque se comportar como você espera, e esse ganho pode se materializar em uma boa variedade de preços possíveis.
Lista de opções que comercializam horas (até 4:15)
Terça-feira, 31 de maio de 2018.
Algum tempo atrás, notei que o valor de algumas de nossas carteiras estava mudando após o fechamento do mercado do estoque subjacente. Claramente, o valor das opções estava mudando após as 4:00 EST fechadas de negociação. Eu fiz uma pesquisa do Google para encontrar uma lista de opções que trocaram após as horas, e surgiu muito vazio. Mas agora eu encontrei a lista e compartilharei com você apenas no caso de você querer jogar por 15 minutos extra após o fechamento da negociação a cada dia.
Lista de opções que comercializam horas (até 4:15)
Uma vez que os valores das opções são derivados do preço do estoque subjacente ou ETP (Exchange Traded Product), uma vez que o subjacente pára a negociação, não deve haver motivo para as opções continuar a negociação. No entanto, mais e mais subjacentes estão sendo negociados no pós-horário, e por muito poucas, as opções continuam a negociar também, pelo menos até 4:15 EST.
As opções para os seguintes símbolos trocam mais 15 minutos após o fechamento da negociação # 8211; DBA, DBB, DBC, DBO, DIA, EFA, EEM, GAZ, IWM, IWN, IWO, IWV, JJC, KBE, KRE, MDY, MLPN, MOO, NDX, OEF, OIL, QQQ, SLX, SPY, SVXY, UNG, UUP, UVXY, VIIX, VIXY, VXX, VXZ, XHB, XLB, XLE, XLF, XLI, XLK, XLP, XLU, XLV, XLY, XME, XRT.
A maioria desses símbolos são (muitas vezes erroneamente) chamados ETFs (Exchange Traded Funds). Embora muitos sejam ETFs, muitos não são - o popular veículo de proteção contra acidentes relacionados com a volatilidade - o VXX é, na verdade, um ETN (Exchange Traded Note). Uma maneira melhor de se referir a esta lista é chamá-los de produtos trocados do Exchange (ETPs).
Cuidado deve ser usado ao negociar essas opções após as 4:00. Da minha experiência, muitos criadores de mercado saem do chão exatamente às 4:00 (o volume geralmente é baixo após esse tempo e nem sempre vale a pena arrasar). Conseqüentemente, as gamas de opções de oferta e solicitação tendem a se expandir consideravelmente. Isso significa que é menos provável que você consiga preços decentes quando você troca depois das 4:00. Às vezes, pode ser necessário, no entanto, se você sentir que está mais exposto a uma abertura que abre no dia seguinte do que você gostaria de ser.
How To Protect Yourself Against a Market Crash With Options.
Monday, May 23rd, 2018.
Today’s idea is a little complicated, but it involves an important part of any prudent investment strategy. Market crashes do come along every once in a while, and we are eight years away from the last one in 2008. What will happen to your nest egg if it happens again this year?
Options can be a good form of market crash insurance, and it is possible to set up a strategy that might even make a small gain if the crash doesn’t come along. That possibility sets it apart from most forms of insurance which cost you out-of-pocket money if the calamity you insure against doesn’t occur.
How To Protect Yourself Against a Market Crash With Options.
There are some strong indications that the old adage “Sell in May and Go Away” might be the appropriate move right now. Goldman Sachs has downgraded its outlook on equities to “neutral” over the next 12 months, saying there’s no particular reason to own them. “Until we see sustained signals of growth recovery, we do not feel comfortable taking equity risk, particularly as valuations are near peak levels,” the firm said in a research note.
For several months, Robert Shiller has been warning that the market is seriously overvalued by his unique method of measuring prices against long-term average p/e’s. George Soros is keeping the bears happy as well, doubling his wager against the S&P 500. The billionaire investor, who has been warning that the 2008 financial crisis could be repeated due to China’s economic slowdown, bought 2.1M-share “put” options in SPY during Q1. The magnitude of his bet against SPY is phenomenal, essentially 200 million shares short. Of course, he almost always deals in stratospheric numbers, but the size of this bet indicates that he feels pretty strongly about this one. He didn’t become a billionaire by being on the wrong side of market bets.
So what can you do to protect yourself against a big tumble in the market? We are setting up a bearish portfolio for Terry’s Tips subscribers, and this is what it will look like. It is based on the well-known fact that when the market crashes, volatility soars, and when volatility soars, the Exchange Traded Product (ETP) called VXX soars along with it.
Some people buy VXX as market crash insurance (or its steroid-like cousin, UVXY). Over the long run, VXX has been a horrible investment, however, possibly the worst thing you could have done with your money over the past six years. It has fallen from a split-adjusted $4000 to its present price of about $15. It has engineered 1-for-4 reverse splits three times to make the price worth bothering to trade. The split usually occurs when it gets down to about $12, so you can expect another reverse split soon.
An option strategy can be set up that allows you to own the equivalent of VXX while not subjecting you to the long-run inevitable downward trend. When volatility does pick up, VXX soars. In fact, it doubled once and went up 50% another time, both temporarily, in the last year alone. While it is a bad long-term investment, if your timing is right, you might pick up a windfall. Our options strategy is designed to achieve the potential upside windfall while avoiding the long-term prospects you face by merely buying the ETP.
Our new portfolio will buy VXX 20Jan17 15 calls and sell fewer contracts in short-term calls. Sufficient short-term premium will be collected from selling the short term calls to cover the decay on the long calls (and a little bit more).
This portfolio will start with $3000. The entire amount will not be used at the outset, but rather be held in cash in case it might be needed to cover a maintenance call in case the market moves higher.
These might be the starting positions:
BTO 3 VXX 20Jan17 15 calls (VXX170120C15)
STO 3 VXX 17Jun16 15 calls (VXX160617C15) for a debit of $2.40 (buying a diagonal)
BTO 3 VXX 20Jan17 15 calls (VXX170120C15)
STO 3 VXX 24Jun16 16 calls (VXX160624C16) for a debit of $2.45 (buying a diagonal)
BTO 4 VXX 20Jan17 16 calls (VXX170120C16) for $3.30.
Here is what the risk profile graph looks like with those positions as of June 18th after the short calls expire:
VXX Better Bear Risk Profile Graph May 2018.
You can see that the portfolio will make gains no matter how high VXX might go. It will make a small gain (about 8% for the month) if the stock stays flat, and starts losing if VXX moves below $14.50. If it falls that far, we might sell call or two at the 14 strike and incur a maintenance requirement which would be partially offset by the amount we collected from selling the call(s). A trade like this would reduce or eliminate a loss if the ETP continues to fall, and it might have to be repeated if VXX continues even lower. At some point, some long calls might need to be rolled down to a lower strike to eliminate maintenance requirements that come along when you sell a call at a lower strike than the long call that covers it.
The above positions could be put on for about $2800. There would be about $200 in cash remaining for the possible maintenance requirement in case one might be necessary.
You probably should not attempt to set up and carry out this strategy unless you are familiar with options trading as it is admittedly a little complicated. A better idea might be to become a Terry’s Tips Insider and open an account at thinkorswim so that these trades could automatically be made for you through their Auto-Trade program.
Every investment portfolio should have a little downside insurance protection. We believe that options offer the best form for that kind of insurance because it might be possible to make a profit at the same time as providing market crash insurance.
As with all forms of investing, you should not be committing money that you truly cannot afford to lose.
Make 40% in One Month With This Costco Trade.
Friday, February 19th, 2018.
Make 40% in One Month With This Costco Trade.
Two weeks ago, LinkedIn (LNKD) issued poor guidance while at the same time announced higher than expected earnings. Investors clobbered the stock, focusing on the guidance rather than the earnings. At the same time, as is often the case, another company in the same industry, Facebook (FB) was also traded down. With FB falling to $98, I reported to you on a trade that would make 66% after commissions if the company closed at any price above $97.50 on March 18, 2018. FB has now recovered and is well over $104 and this spread looks like it will be a winner. All we have to do is wait out the remaining 4 weeks (no closing trade will be necessary as long as the stock is at any price above $97.50).
Today, a similar thing took place. Walmart (WMT) announced earnings which narrowly beat estimates, but missed top line revenue by a bit. However, they projected that next quarterly earnings (starting now) would be flat. This announcement was a big disappointment because they had earlier projected growth of 3% – 4%. The stock fell 4.5% on that news.
Costco (COST) is also a retailer, and many investors believe that as Walmart goes, so will Costco. They sold COST down on WMT’s news by the same percentage, 4.5%. This how the lemmings do it, time and time again.
That seemed to be an over-reaction to me. COST is a much different company than WMT. COST is adding on new stores every month while WMT is in the process of closing 200 stores, for example. WMT has a much greater international exposure than COST, and the strong dollar is hurting them far more.
I expect cooler heads will soon prevail and COST will recover. Today, with COST trading at $147.20, I made a bet that 4 weeks from now, COST will be at least $145. If it is, I will make 40% after commissions on this spread trade. The stock can fall by $2.20 by that time and I will still make 40%.
Here is what I did for each contract:
Buy to Open 1 COST Mar-16 140 put (COST160318P140)
Sell to Open 1 COST Mar-16 145 put (COST160318P145) for a credit of $1.45 (selling a vertical)
This is called selling a bull put credit spread. When the trade is made, your broker will deposit the proceeds ($145) in your account (less the commission of $2.50 which Terry’s Tips subscribers pay at thinkorswim), or a net of $142.50). The broker will make a maintenance requirement of $500 (the difference between the two strike prices). There is no interest on this requirement (like a margin loan), but it just means that $500 in your account can’t be used to buy other stock or options.
Since you received $142.50 when you sold the spread, your net investment is $357.50 (the difference between $500 and $142.50). This is your maximum loss if COST were to end up at any price lower than $140 when the puts expire. The break-even price is $143.57. Any ending price above this will be profitable and any ending price below this will result in a loss. (If the stock ends up at any price between $140 and $145, you will have to repurchase the 145 put that you originally sold, and the 140 put you bought will expire worthless.)
Since I expect the stock will recover, I don’t expect to incur a loss. It is comforting to know that the stock can fall by $2.20 and I will still make my 40%.
If you wanted to be more aggressive and bet the stock will move higher, back above the $150 where it was before today’s sell-off, you could buy March puts at the 145 strike and sell them at the 150 strike. You could collect at least $2.00 for that spread, and you would gain 65% if COST ended up above $150. Higher risk and higher reward. The stock needs to move a bit higher for you to make the maximum gain. I feel more comfortable knowing it can fall a little and still give me a seriously nice gain for a single month.
By the way, these trades can be made in an IRA (if you have a broker like thinkorswim which allows options spread trading in an IRA).
If you make either of these trades, please be sure you do it with money you can truly afford to lose. Options are leveraged instruments and often have high-percentage gains and losses. With spreads like the above, at least you know precisely what the maximum loss could be. You can’t lose more than you risk.
Um jogo de opção projetado para fazer 68% em um mês.
Segunda-feira, 14 de dezembro de 2018.
Na semana passada, o VIX, o chamado "índice de medo" aumentou 65% para fechar às 24.39. Foi a décima vez que mudou mais de 20 anos nos últimos 3 anos. Em 9 dessas 10 ocasiões, a VIX caiu abaixo de 20 em menos de 10 dias, e na outra instância (21 de agosto de 2018), demorou 40 dias para voltar abaixo de 20. Hoje eu gostaria de falar sobre um comércio Estou fazendo hoje que fará 68% em um mês se esse padrão continuar desta vez.
Um jogo de opção projetado para fazer 68% em um mês.
A semana passada foi ruim para o mercado. O estoque de rastreamento S & amp; P 500 (SPY) caiu US $ 7,74 para fechar em US $ 201,88, queda de 3,7% na semana. A SPY fechou 2018 em US $ 205,54 e começou em 2018 em US $ 206,38, portanto, se o fechamento da semana passada for por mais duas semanas, o mercado registrará uma perda de ano civil pela primeira vez desde 2008.
Aparentemente, o motivo da grande queda centrada em torno do possível movimento do Fed para aumentar as taxas de juros na quarta-feira, a primeira vez que isso aconteceu em uma década. Eu acredito que as instituições (que controlam mais de 90% do volume de negócios) estavam realizando um último esforço para desencorajar esse movimento. Afinal, o Fed quer ser os bandidos que são responsáveis ​​pelo pior mercado anual em 7 anos? A elevação das taxas seria uma boa idéia em um momento em que o mercado é mais baixo do que era há um ano? (Nós devemos lembrar que o Fed é composto por grandes bancos que obtêm maiores lucros quando as taxas de juros são mais elevadas, de modo que aumentar as taxas pode parecer auto-atendimento).
Não tenho ideia se o Fed aumentará as taxas em dois dias, como Janet Yellen indicou que planejam. Se o fizerem, eu suspeito que será um pequeno começo, talvez 0,25%, e eles também informarão que eles pretendem demorar a aumentar ainda mais. Em ambos os casos, sem aumento de taxa ou um pequeno, a grande mudança será que a incerteza sobre o momento do aumento deixará de existir. Qualquer escolha deve resultar em um mercado mais alto e mais importante para os comerciantes de opções, um VIX mais baixo.
Como escrevi extensivamente, um produto negociado em bolsa (ETP) chamado SVXY varia inversamente com o VIX. Quando o VIX se move mais alto, o SVXY falha e vice-versa. Na semana passada, o SVXY caiu $ 14,27, de US $ 59,41 para US $ 45,14, (24%), quando a VIX aumentou 65%.
Quando o VIX cai abaixo de 20, como fez todas as vezes que aumentou mais de 20 anos nos últimos 3 anos, o SVXY estará negociando mais alto do que é hoje. Aqui está o comércio que farão 68% se o SVXY estiver negociando mais alto do que fechou na sexta-feira em 32 dias (em 15 de janeiro de 2018).
Compre Para Abrir 1 SVXY Jan-16 40 put (SVXY160115P40)
Vender para abrir 1 SVXY janeiro-16 45 colocar (SVXY160115P45) para um crédito de $ 2.05 (venda de uma vertical)
Este comércio colocará US $ 205 em sua conta (menos US $ 2,50 comissões na tarifa que os assinantes de Terry pagam no thinkorswim), ou US $ 202,50. O corretor colocará um requisito de manutenção em sua conta de US $ 500, mas seu valor máximo em risco é de US $ 500 menos os US $ 202,50 que você colecionou, ou US $ 297,50) - essa perda ocorreria se o SVXY fechasse a qualquer preço abaixo de US $ 40 no vencimento de janeiro. O preço de compensação para você seria de US $ 43,00 - qualquer preço acima disto seria lucrativo e qualquer preço abaixo teria uma perda. Não há taxa de juros sobre o requisito de manutenção, mas tanto em sua conta será reservada para que você não possa comprar outros estoques ou opções com ele.
No final da negociação em 15 de janeiro de 2018, se SVXY for a qualquer preço acima de US $ 45, ambas as opções expirarão sem valor e você manterá os US $ 202,50 que você coletou quando você fez o comércio. Isso resulta ser um ganho de 68% em seu investimento em risco. Você não terá que fazer um comércio naquele momento, mas apenas espere até o final do dia para ver o requisito de manutenção desaparecer.
Claro, existem outras maneiras de fazer uma aposta similar que o SVXY vai se dirigir mais rápido assim que alguma incerteza no mercado se dissipe. Você poderia vender o mesmo spread em qualquer série de opções semanais para as próximas 5 semanas e receber aproximadamente o mesmo preço de crédito. Por períodos de tempo mais curtos, você não precisa aguardar tanto tempo para economizar seu lucro, mas há menos tempo para a incerteza se estabelecer e o SVXY se move mais alto.
Na verdade, o VIX não precisa se apaixonar por SVXY pelo menos ficar imóvel. Deve trocar pelo menos US $ 45 enquanto o VIX não aumentar consideravelmente entre agora e quando as opções expiram.
Um comércio mais agressivo seria apostar que SVXY aumenta para pelo menos US $ 50 em 33 dias. Neste comércio, você compraria Jan-16 45 coloca e vende em 16 de janeiro, coloca. Você deve coletar pelo menos US $ 2,80 (US $ 277,50 após as comissões) e fazer 124% em seu risco máximo de US $ 222,50 se o SVXY fechou a qualquer preço acima de US $ 50 em 15 de janeiro de 2018.
A última vez que VIX fechou acima de 20 foi em 13 de novembro de 2018. Naquele dia, o SVXY fechou em US $ 50,96. No dia seguinte, o VIX caiu abaixo de 20 e o SVXY subiu para US $ 56,16. Nunca foi negociado abaixo do número de US $ 50,96 até a última sexta-feira, quando o VIX voltou a se mover mais de 20.
Penso que este é um momento oportuno para fazer um comércio rentável, que é essencialmente uma aposta de que a incerteza atual do mercado será temporária e poderá ter terminado na quarta-feira quando o Fed tomar sua decisão sobre as taxas de juros. Claro, uma ação terrorista séria ou outra calamidade também pode assustar os mercados, e a incerteza continuará.
Nenhuma negociação de opção é certeza de apostas, mesmo que as últimas 10 vezes que um determinado indicador tenha piscado e um lucro de 68% poderia ter sido feito sempre. Como com todos os investimentos, você nunca deve arriscar dinheiro que você realmente não pode perder. No entanto, eu me sinto muito bem com os dois investimentos descritos acima, e os farei hoje, pouco depois de você receber esta carta.
The Worst “Stock” You Could Have Owned for the Last 6 Years.
Monday, September 14th, 2018.
Today I would like to tell you all about the worst “stock” you could have owned for the past 6 years. It has fallen from $6400 to $26 today. I will also tell you how you can take advantage of an unusual current market condition and make an options trade which should make a profit of 66% in the next 6 months. That works out to an annualized gain of 132%. Not bad by any standards. For the next few days, I am also offering you the lowest price ever to become a Terry’s Tips Insider and get a 14-day options tutorial which could forever change your future investment results. It is a half-price back-to-school offer – our complete package for only $39.95. Click here, enter Special Code BTS (or BTSP for Premium Service – $79.95).
This could be the best investment decision you ever make – an investment in yourself.
The Worst “Stock” You Could Have Owned for the Last 6 Years.
I have put the word “stock” in quotations because it really isn’t a stock in the normal sense of the word. Rather, it is an Exchange Traded Product (ETP) created by Barclay’s which involves buying and selling futures on VIX (the so-called “Fear Index” which measures option volatility on the S&P 500 tracking stock, SPY). It is a derivative of a derivative of a derivative which almost no one fully understands, apparently even the Nobel Prize winners who carried out Long-Term Capital a few years back.
Even though it is pure gobbledygook for most of us, this ETP trades just like a stock. You can buy it and hope it goes up or sell it short and hope it goes down. Best of all, for options nuts like me, you can trade options on it.
Let’s check out the 6-year record for this ETP (that time period is its entire life):
It is a little difficult to see what this ETP was trading at when it opened for business on January 30, 2009, but its split-adjusted price seems to be over $6000. (Actually, it’s $6400, exactly what you get by starting at $100 and engineering 3 1-for-4 reverse splits). Friday, it closed at $26.04. That has to be the dog of all dog instruments that you could possible buy over that time period (if you know of a worse one, please let me know).
This ETP started trading on 1/30/09 at $100. Less than 2 years later, on 11/19/10, it had fallen to about $12.50, so Barclays engineered a reverse 1-for-4 split which pushed the price back up to about $50. It then steadily fell in value for another 2 years until it got to about $9 on 10/15/12 and Barclays did the same thing again, temporarily pushing the stock back up to $36. That lasted only 13 months when they had to do it again on 11/18/13 – this time, the stock had fallen to $12.50 once again, and after the reverse split, was trading about $50. Since then, it has done relatively better, only falling in about half over almost a two-year span.
Obviously, this “stock” would have been a great thing to sell short just about any time over the 6-year period (if you were willing to hang on for the long run). There are some problems with selling it short, however. Many brokers can’t find stock to borrow to cover it, so they can’t take the order. And if they do, they charge you some healthy interest for borrowing the stock (I don’t quite understand how they can charge you interest because you have the cash in your account, but they do anyway – I guess it’s a rental fee for borrowing the stock, not truly an interest charge).
Buying puts on it might have been a good idea in many of the months, but put prices are quite expensive because the market expects the “stock” to go down, and it will have to fall quite a way just to cover the cost of the put. I typically don’t like to buy puts or calls all by themselves (about 80% of options people buy are said to expire worthless). If you straight-out buy puts or calls, every day the underlying stock or ETP stays flat, you lose money. That doesn’t sound like a great deal to me. I do like to buy and sell both puts and calls as part of a spread, however. That is another story altogether.
So what else should you know about this ETP? First, it is called VXX. You can find a host of articles written about it (check out Seeking Alpha) which say it is the best thing to buy (for the short term) if you want protection against a market crash. While that might be true, are you really smart enough to find a spot on the 6-year chart when you could have bought it and then figured out the perfect time to sell as well? The great majority of times you would have made your purchase, you would have surely regretted it (unless you were extremely lucky in picking the right day both to buy and sell).
One of the rare times when it would have been a good idea to buy VXX was on August 10, 2018, just over a month ago. It closed at its all-time low on that day, $15.54. If you were smart enough to sell it on September 1st when it closed at $30.76, you could have almost doubled your money. But you have already missed out if you didn’t pull the trigger on that exact day. It has now fallen over 15% in the last two weeks, continuing its long-term trend.
While we can’t get into the precise specifics of how VXX is valued in the market, we can explain roughly how it is constructed. Each day, Barclays buys one-month-out futures on VIX in hopes that the market fears will grow and VIX will move higher. Every day, Barclays sells VIX futures it bought a month ago at the current spot price of VIX. If VIX had moved higher than the month-ago futures price, a profit is made.
The reason why VXX is destined to move lower over time is that over 90% of the time, the price of VIX futures is higher than the spot price of VIX. It is a condition called contango. The average level of contango for VIX is about 5%. That percentage is how much higher the one-month futures are than the current value of VIX, and is a rough approximation of how much VXX should fall each month.
However, every once in a while, the market gets very worried, and contango disappears. The last month has been one of those times. People seem to be concerned that China and the rest of the world is coming on hard times, and our stock markets will be rocked because the Fed is about to raise interest rates. The stock market has taken a big tumble and market volatility has soared. This has caused the current value of VIX to become about 23.8 while the one-month futures of VIX are 22.9. When the futures are less than the spot price of VIX, it is a condition called back-wardation. It only occurs about 10% of the time. Right now, backwardation is in effect, (-3.59%), and it has been for about 3 weeks. This is an exceptionally long time for backwardation to continue to exist.
At some point, investors will come to the realization that the financial world is not about to implode, and that things will pretty much chug along as they have in the past. When that happens, market volatility will fall back to historical levels. For most of the past two or three years, VIX has traded in the 12 – 14 range, about half of where it is right now. When fears subside, as they inevitably will, VIX will fall, the futures will be greater than the current price of VIX, and contango will return. Even more significant, when VIX falls to 12 or 14 and Barclays is selling (for VXX) at that price, VXX will lose out big-time because a month ago, it bought futures at 22.9. So VXX will inevitably continue its downward trend.
So how can you make money on VXX with options? To my way of thinking, today’s situation is a great buying opportunity. I think it is highly likely that volatility (VIX) will not remain at today’s high level much longer. When it falls, VXX will tumble, contango will return, and VXX will face new headwinds going forward once again.
Here is a trade I recommended to Terry’s Tips Insiders last Friday:
“If you believe (as I do) that the overwhelming odds are that VXX will be much lower in 6 months than it is now, you might consider buying a Mar-16 26 call (at the money – VXX closed at $26.04 yesteday) and sell a Mar-16 21 call. You could collect about $2 for this credit spread. In 6 months, if VXX is at any price below $21, both calls would expire worthless and you would enjoy a gain of 66% on your $3 at risk. It seems like a pretty good bet to me.”
This spread is called selling a bearish call credit vertical spread. For each spread you sell, $200 gets put in your account. Your broker will charge you a maintenance requirement of $500 to protect against your maximum loss if VXX closes above $26 on March 18, 2018. Since you collect $200 at the beginning, your actual maximum loss is $300 (this is also your net investment in this spread). There is no interest charged on a maintenance requirement; rather, it is just money in your account that you can’t use to buy other stocks or options.
This may all seem a little confusing if you aren’t up to speed on options trading. Don’t feel like the Lone Ranger – the great majority of investors know little or nothing about options. You can fix that by going back to school and taking the 14-day options tutorial that comes with buying the full Terry’s Tips’ package at the lowest price ever – only $39.95 if you buy before Friday, September 23, 2018.
Lowest Subscription Price Ever: As a back-to-school special, we are offering the lowest subscription price than we have ever offered – our full package, including all the free reports, my White Paper, which explains my favorite option strategies in detail, and shows you exactly how to carry them out on your own, a 14-day options tutorial program which will give you a solid background on option trading, and two months of our weekly newsletter full of tradable option ideas. All this for a one-time fee of $39.95, less than half the cost of the White Paper alone ($79.95).
For this lowest-price-ever $39.95 offer, click here, enter Special Code BTS (or BTSP for Premium Service – $79.95).
Um comércio de baixo risco para fazer 62% em 4 meses.
Terça-feira, 8 de setembro de 2018.
A volatilidade do mercado continua a ser alta, e a única coisa que sabemos da história é que, embora os picos de volatilidade sejam bastante comuns, os mercados eventualmente se estabelecem. Depois de suportar uma certa quantidade de dor psíquica, os investidores se lembram de que o mundo provavelmente continuará a se mover muito bem como no passado, e os receios do mercado diminuirão. Embora esse período temporário de alta volatilidade continue a existir, existem alguns negociações a serem feitas que prometem retornos extremamente elevados nos próximos meses. Gostaria de discutir um hoje, um comércio que acabei de executar na minha conta pessoal, então eu sei que é possível colocar.
Um comércio de baixo risco para fazer 62% em 4 meses.
Como estamos discutindo há várias semanas, o VIX, o chamado Índice Fear, continua com mais de 25 anos. Isso se compara ao nível de 12 a 14, onde ele passou por grande parte dos últimos dois anos. Quando VIX finalmente cai, uma coisa que sabemos é que SVXY, o ETP que se move na direção oposta como VIX, vai se mover mais alto.
Por causa da persistência do contango, o SVXY está destinado a se mover mais alto, mesmo que o VIX permaneça plano. Vamos verificar o gráfico de 5 anos deste interessante ETP:
Observe que, embora a tendência geral para o SVXY seja para o lado positivo, de vez em quando é preciso uma grande queda. Mas as grandes gotas não duram muito tempo. O estoque se recupera rapidamente, uma vez que os receios diminuem. A recente queda é, de longe, a maior da história da SVXY.
Ao escrever isso, o SVXY está negociando cerca de US $ 47, até $ 2 ½ para o dia. Eu acredito que está destinado a se mover um pouco mais alto, e em breve. Mas com o comércio que fiz hoje, um lucro de 62% (após comissões) pode ser feito nos próximos 4 meses, mesmo que as ações caíssem em US $ 7 (quase 15%) de onde é hoje.
Foi o que eu fiz:
Compre para abrir 1 SVXY em 16 de janeiro de 35 (SVXY160115P35)
Vender para abrir 1 SVXY jan-16 40 colocar (SVXY160115P40) para um crédito de $ 1.95 (vendendo uma vertical)
Quando esse comércio foi executado, US $ 192,50 (após uma comissão de US $ 2,50) entraram em minha conta. Se, em 15 de janeiro de 2018, o SVXY seja a qualquer preço superior a US $ 40, ambas as posições expirarão sem valor, e por cada spread vertical que eu vendi, não terei que fazer um comércio de fechamento, e eu farei um lucro de exatamente $ 192.50.
Então, quanto eu tenho que colocar para colocar esse comércio? O corretor analisa essas posições e calcula que a perda máxima que poderia ocorrer nelas seria de US $ 500 (US $ 100 por cada dólar de preço de ações abaixo de US $ 40). Para que isso aconteça, o SVXY teria que fechar abaixo de US $ 35 em 15 de janeiro. Como tenho certeza de que está indo mais alto, não mais baixo, uma queda desta magnitude parece altamente improvável para mim.
O corretor colocará um requisito de manutenção de $ 500 em minha conta. Este não é um empréstimo em que os juros são cobrados, mas apenas o dinheiro que não consigo comprar para comprar ações. No entanto, desde que recebi US $ 192,50, não posso perder os $ 500 inteiros. Minha perda máxima é a diferença entre o requisito de manutenção e o que recebi, ou $ 307.50.
Se SVXY fechar a qualquer preço acima de US $ 40 em 15 de janeiro, ambas as posições expirarão sem valor e o requisito de manutenção desaparecerá. Eu não tenho que fazer nada além de pensar em como vou gastar meu lucro de US $ 192,50. Eu farei 62% no meu investimento. Onde mais você pode fazer esse tipo de retorno para o menor risco que isso implica?
Claro, como com todos os investimentos, você só deve arriscar o que você pode perder. Mas acredito que a probabilidade de perder esse investimento é extremamente baixa. O estoque está destinado a se mover mais alto, não inferior, assim que o atual mercado turbulento se estabilizar.
Se você quisesse correr um pouco mais de risco, você pode comprar os 45 colocar e vender um 50 na série de 15 de janeiro. Você apostaria que o estoque consegue se mover um pouco mais alto nos próximos 4 meses. Você poderia coletar cerca de US $ 260 por spread e seu risco seria de US $ 240. Se o SVXY fechou mais de $ 50 (o que a história diz que deveria), seu lucro seria superior a 100%. Eu também coloquei esse comércio espalhado na minha conta pessoal (e também minha conta de confiança de caridade).
Pesquisar Blog.
Categorias.
Fazendo 36% & mdash; Um Guia de Duffer para Parar Par no Mercado todos os anos em bons anos e ruim.
Este livro pode não melhorar o seu jogo de golfe, mas pode mudar sua situação financeira para que você tenha mais tempo para os verdes e os fairways (e, às vezes, os bosques).
Saiba por que o Dr. Allen acredita que a Estratégia 10K é menos arriscada do que possuir ações ou fundos mútuos e por que é especialmente apropriado para o seu IRA.
Histórias de sucesso.
Eu tenho negociado os mercados de ações com muitas estratégias diferentes por mais de 40 anos. As estratégias de Terry Allen foram os fabricantes de dinheiro mais consistentes para mim. Eu usei-os durante o derretimento de 2008, para ganhar mais de 50% de retorno anualizado, enquanto todos os meus vizinhos estavam chorando sobre suas perdas.
thinkorswim, Divisão da TD AMERITRADE, Inc. e Terry's Tips são empresas separadas e não afiliadas e não são responsáveis ​​pelos serviços e produtos uns dos outros.
tastyworks, Inc. entrou em um acordo de marketing com as Dicas de Terry ("Agente de Marketing"), pelo qual a tastyworks paga uma compensação ao Agente de Marketing para recomendar os serviços de corretagem da tastyworks. A existência deste Acordo de Marketing não deve ser considerada como um endosso ou recomendação do Agente de Marketing por sabedoria e / ou qualquer uma das suas empresas afiliadas. Nem o saboroso nem nenhuma das suas empresas afiliadas é responsável pelas práticas de privacidade do Agente de Marketing ou deste site. O tastyworks não garante a precisão ou o conteúdo dos produtos ou serviços oferecidos pelo Agente de Marketing ou este site.
tastyworks, Inc. e Terry's Tips são empresas separadas e não afiliadas e não são responsáveis ​​pelos serviços e produtos uns dos outros. As opções não são adequadas para todos os investidores, pois os riscos especiais inerentes às opções de negociação expõem os investidores a perdas potencialmente rápidas e substanciais. A negociação de opções em uma conta do tastyworks está sujeita à revisão e aprovação do tastyworks. Leia Recursos e Riscos de Opções Padronizadas antes de investir em opções.
& copy; Copyright 2001-2018 Terry & # 039; s Dicas Opções de ações Blog de negociação Terry's Tips, Inc. dba Terry's Tips.

How to Trade VXX with Options.
November 30, 2018.
Option trades: In tonight's update, we're going to go over all of the trades that we made on Tuesday, April 7th. We didn't have, any trades yesterday to start off the week, and hopefully, everyone had a great long holiday weekend to spend time with family. Today we had one of each. We had a new opening order, a closing order, and then a hedge or adjusting trade that we made to USO.
Related "Option Trades" Resources:
We'll start off with the trade in Twitter. We had a nice opportunity today to close out of our CALL calendar spread that we had in Twitter. We've only had this trade on Twitter for I think just over two weeks, so it hasn't been that long at all, maybe 11 or 12 trading days.
With Twitter, we were anticipating that the stock might go just a little bit higher, that's why we went directionally with the CALL versus the PUT spreads on the calendar. We also were anticipating that implied volatility would rise as we got closer to Twitter's earnings.
Treinamento de vídeo guiado a seu próprio ritmo com opções "Rotas de Alpha": as opções de negociação podem ser esmagadoras se você não sabe por onde começar. Nossos "Roteiros" são cursos de aprendizagem orientados que o ajudam a atingir seus objetivos.
Cada programa foi feito à mão para ajudá-lo, independentemente da sua experiência comercial atual. Clique aqui para escolher sua faixa?
We saw that happen over the course of the last two weeks or so, and kind of today we just felt like we had an opportunity to close it out with a nice profit for a one lot trade on a calendar. We did sell back to the market our April, May 52.5 CALL calendar for 2.33 credit, took in a nice $49 profit on each one of those that we sold back to the market.
With Twitter, you can see that the stock obviously made a move higher, right to where we wanted it to be. We ideally wanted the stock to be up around 52.5; it ended the day just a little bit beyond that. But more important than that, we also saw implied volatility rise, which helped solidify this position as a winning trade because as we got closer and closer to earnings, we saw that consistent history of seeing implied volatility rise, and rise, and rise.
We could have obviously left this trade if you wanted to, but now you run a lot of directional risks that Twitter continues to move far beyond or come back down below. As soon as you get the stock that moves right where you thought it was going to go or where you hoped it was going to go, 52.5 and you get implied volatility is moving the way you want, it's is probably in our experience, the best time to get out of the trade. You've had two things that go right in a market that's always hard to play, so why not take money off the table and bank some profits?
Just as a quick sidebar here, before we get into other stuff, it's pretty interesting, and I get a lot of emails, obviously we've got thousands of members on the website now. I get a lot of emails from members, and FXE was one yesterday that we had a lot of emails about yesterday. People asking about an adjustment are trade because FXE was rallying higher, and I talked with premium members on the strategy call last night.
Talking about the fact that we just don't know where the stock is going to go. It opened up the day, yesterday that is, opened up near the highs and then ended the day near the lows, and again, this is only one day and it could turn around but now you can see it gave up all of that gain and then some. Everything that we lost, paper money, like we didn't close out any trades yesterday, we just had trades that weren't winners yesterday. We gained all of that back and then some today.
It is a testament to show you that we have no idea where this market's going and sometimes it's not always the best trade to make a quick, kind of harsh adjustment or an aggressive adjustment. I think that you should be a little bit slower with your adjustments, have some defined guide poster road marker as we talked about in one of our past webinars, as to when you might make an adjustment.
Also keep things in perspective, and for us, yesterday, even though FXE went in the money on one of our strikes on the CALL side, we just had to keep in mind that there was so much time between now and expiration that anything can happen. We didn't want to be too quick to make an adjustment because of what just happened today.
Where the stock just moves right back down into the range that we want it to be in. Just as a quick little sidebar, just to help you guys out here, it's not always about making aggressive positions. It is much more of a waiting game than we all wanted to believe because we all want to be pretty active.
The one opening trade that we did have today, we'll cover that real quick. That is in VXX. This one's a little bit different.
We're playing volatility at this point. VXX is one of the securities that we like to trade to play volitility, and because volatility was low, VXX was low, the [vix 00:04:25] is low, stocks are higher, tehn we want to play a little bit of long volatility. We're not going crazy long volatility, but what we did want to do is play it just a little bit long.
The way that we're doing that is with an iron condor, but we're skewing that iron condor just a little bit. We're doing the 29/30 CALL spread above the market, notice that's just $1 wide above the market, so we're at the 29/30 CALL spread. Down below the market, we're doing a $2 PUT spread. We're taking a little bit more risk on the PUT side of this particular trade, selling the 21/23 PUTS, taking in an overall credit of 86 cents.
We're definitely leaving room to add or adjust this trade as VXX moves, but here's where VXX kind of ended the day. Really, really close to the lows it's had over the last year and so we're just, anticipating that some time between now and expiration out in May, which is out here, that implied volatility goes higher at some point.
Again, it's a little bit hard to trade implied volatility percentile with VXX because implied volatility percentile is tracking volatility, and VXX is volatility. You can't really trade most of this stuff off of implied volatility percentile. It doesn't work quite exactly that way with some of these volatility ETFs and indexes like VIX, et cetera.
That's a little bit difficult, I know we got a lot of questions on that, but we're not trading this, I know it does not meet our general requirements for implied volatility over the 25th percentile, but we are trading long volatility here so that's the direction that we want it to go. When you look at the analyze tab on where this position is, and actually let me just look at the actual trade tab here so you guys can see where our position is for May.
You can see that we're definitely leaving ourselves a lot more room above the market, notice our position above the market, out at 29/30. We really, ideally want the stock to be under 29, and we got a little bit closer and a little bit wider on the PUT side, and that's just how we set up the trade because it kind of fit the parameters that we were looking for.
You'll notice that we have a $2 wide strike down below the market so this is where we're taking most of the risk in the trade. Risk profile wise, you can see this skewed iron condor that we have, now going in VXX. Here's the deal, the reason that we skewed it is because implied volatility could rise really, really quickly, and if it does, we stand to make a profit all the way until about 30. Our break even point's just a little bit shy of 30, but after that we only lose about $14.
We don't lose a ton of money because of the way that we've structured the trade if implied volatility goes through the roof. If implied volatility continues to creep lower, it's going to do so at a very slow pace. That's why we feel a little bit comfortable to make our PUT spreads a little bit closer because we're familiar with volatility, we know it's already low, so if it does go lower, it's going creep and creep lower.
It's not going to just dramatically drop another five or 10 points. At this point, we've got a very nice window of opportunity between about 22 and about 30 that we ideally want to see VXX trade in between now and expiration. 22 is down below the market where it's at right now, and the 30 is up here, so we're not going crazy long volatility. We're not hoping for a huge spike because we don't know when that's going to happen, but we're just playing some normalization in volatility up above the level that it's at right now between now and expiration.
The last trade that we had today was in USO. USO is a hedge trade, this is only for our April butterfly that we had, our iron butterfly in USO. We have two iron butterflies going on USO right now. One in April, which we adjusted today and one in May, which we did not adjust, that one is going fine because USO's moving higher, exactly where we want it to go for May.
For USO, what we did is we rolled up our 16 PUTS which were practically worthless, to the 18.5. That allowed us to take in a nice credit of 42 cents, that helps reduce our risk in case USO does continue to move higher between now and expiration. Here's the deal, USO has definitely continued to move off of the lows and implied volatility's starting to head lower, that's all great stuff, both for April and May positions.
We felt like because our position was ideally centered around 16, this is where we wanted USO to trade between now and April expiration, which is right here, this is that first dotted line on the chart. We ideally wanted USO to trade there; we felt like it was worth making a small adjustment to take in a little bit of credit because it's not just another $1 move down, this is going to be a $3 move down that we want USO to make.
It might not be as likely now that we're getting deeper and deeper into the trading month and the expiration cycle, so for USO here's what our position looks like for the April contract. It's now a little bit of that kind of unbalanced iron condor look, and you can see that we have got a little bit less risk now on the topside of our trade. We're leaving much more risk to the bottom side of our trade because we're rolling up that PUT closer and closer to where the stock is trading right now.
We can continue to do this if we want to, but the whole idea here is again, just to take in more and more credit that helps offset the total risk in the trade going from the beginning. Como sempre, espero que vocês gostem desses vídeos. If you have any comments or questions, please add them right below here, inside of the membership area on OptionAlpha.
If you're watching this video somewhere else out there online or on YouTube, you just have to understand that this video and these alerts only go out to our members the same day. You're getting them about 15 to 20 days after they're sent out to our members. The only way you can get real-time alerts and this video every single night that goes over all of our trades is to sign up for a membership at OptionAlpha. Até a próxima, negociação feliz.
Sobre o autor.
Kirk Du Plessis.
Kirk fundou a Option Alpha no início de 2007 e atualmente atua como Chief Trader. Anteriormente, um banqueiro de investimentos no Grupo de Incorporações e Aquisições do Deutsche Bank em Nova York e Analista de REIT para BB & T Capital Markets em Washington D. C., ele é um comerciante de opções de tempo integral e investidor imobiliário.
Ele foi entrevistado em dezenas de sites / podcasts de investimentos e ele foi visto na Revista Barron, SmartMoney e várias outras publicações financeiras. Kirk atualmente mora na Pensilvânia (EUA) com sua linda esposa e duas filhas.

The #1 Way to Make Weekly Income with Weekly Options In Any Market Condition.
By Jack Carter, SuperiorInformation.
As opções semanais de negociação podem ser uma ótima maneira de gerar renda semanal consistente, mas a chave é aprender a trocar de maneira correta. In this discussion, you will learn how most people trade weekly options and why they fail. Next you will learn a simple strategy for trading weekly options that can consistently put money into your account on a weekly basis.
“Weekly options are the biggest game changer for the independent investor since the invention of the Internet.”
E agora, graças a três mudanças recentes no mercado de opções, você pode obter uma vantagem ainda maior. Here’s why. A primeira grande mudança:
The invention of weekly options. As opções normais estão listadas em meses. Você pode comprar e vender opções de estoque vários meses no prazo. As opções semanais expiram semanalmente. Essas opções semanais oferecem uma nova maneira de negociar. Weekly options volume has soared. Quando as opções semanais começaram a tração em 2018, elas eram pequenas em escopo e volume. Mas, até 2018, o volume de opções semanais disparou. Isso lhe dá uma vantagem de liquidez. The number of stocks with available weekly options has grown 200%. A lista de ações está no ponto em que agora você pode encontrar várias grandes operações de opções semanais, independentemente das condições de mercado.
Como resultado dessas mudanças, você obtém grande liquidez e oportunidades comerciais mais disponíveis com opções semanais.
I’m Jack Carter, and I have over 30 years and close to $1 billion in trading experience. Fui treinado no World Trade Center em 1985. Troquei pelo maior mercado para cima e para baixo da história. Meu registro foi de mais de US $ 8 milhões em estoque em um dia.
In my career, I’ve been a stockbroker, a NASDAQ market maker, a professional day trader, and a hedge fund manager. But most importantly, I’ve successfully taught traders from 43 countries to make profit-rich trades. I’m not telling you all of this to impress you, rather to impress upon you that this is 100% real, not some hypothetical stuff some guy made up but never made any real money on.
Now I’ve discovered what I believe is the biggest trading advantage for the little guy since the invention of the Internet.
The #1 Way to Make Weekly Income With Weekly Options!
After losing my own money early in 1984 as a stockbroker, I went on to find success with options after working as a hedge fund trader. From this experience, I can save you a lot of time and lost money right now.
At some point in your journey, if you don’t get wiped out along the way, you’ll discover that there are definitely winners and losers in the options market. The reason is because options are a “zero sum” game. But it’s simpler than that. Here’s why:
Quando você possui um estoque, você pode possuí-lo para sempre.
But when you own an option, it’s only good for a certain amount of time, until expiration. And the cold hard truth is that most options expire worthless.
A razão é, porque as opções compradoras ficaram sem tempo.
This means options buyers lose all their money most of the time.
The real money in the options market is in selling options.
As probabilidades são a seu favor, simplesmente por ser um vendedor de opções.
As opções semanais oferecem uma vantagem enorme porque expiram todas as semanas.
Isso significa que você pode fazer renda semanal vendendo opções semanais que expiram sem valor.
But how can you make it work.
Há três partes disso.
Part 1. The stocks Part 2. The options Part 3. The strategy – getting paid.
Part 1: The stocks.
Esta é a parte mais importante. Nem todas as ações possuem opções semanais disponíveis. And the ones that do aren’t always good to trade.
First and foremost, we want a stock with available weekly options that’s in a good trend. Tomamos a lista e analisamos cada estoque com opções semanais disponíveis e reduzi-las para três a cinco delas, que estão em boas tendências.
Part 2: The options.
There are only two types of options, puts and calls. And there are only two things you can do with options—you can buy puts and calls or you can sell puts and calls. If you buy a put option, you own the right to “put” the stock to someone at the strike price until expiration. If you sell a put, you sold someone the right to “put” it to you at the strike price until expiration.
If you buy a call option, you own the right to “call” the stock away at the strike price until expiration. If you sell a call, you sell someone the right to “call” it away from you.
Part 3: The strategy.
I’ve already given you the million-dollar secret to making money with options—be an options seller. A razão é porque a maioria das opções expira sem valor. A decadência do tempo é o que os faz expirar sem valor.
Então, nós ganhamos vendendo opções enquanto eles ainda têm algum valor de tempo, e nós ganhamos quando expirar sem valor quatro dias depois. Na maioria das vezes, o uso de opções de colocação funciona melhor. Quais as opções de venda expiram sem valor? The simple answer is: any put options at strike prices that are “out of the money” at the close of the market every Friday.
Here’s an Example.
Let’s use a stock called XYZ as an example. If XYZ stock price closes on Friday over $100 per share, then any put option with a strike price lower that $100 is “out of the money” and will be worthless because there is no value in owning the right to put the stock to someone at $99.50 or less, if XYZ is worth $100 or more in the open market.
To get paid every Friday, we want to sell “out of the money” put options early in the week while they still have some time value, and let them expire worthless so we keep all the money we made selling the put option. I’ll give you two examples.
O primeiro exemplo irá ajudá-lo a entender como as peças funcionam juntas e os princípios e conceitos envolvidos. A estratégia de opções semanais é um spread de crédito. Existem muitas maneiras de usá-lo. Há tantas maneiras de usar essa estratégia como você pode imaginar.
But here’s the thing, it’s not what strategy you use, but rather how you use the strategy. Descobri uma maneira de baixo risco de usar opções semanais para ficar rico lentamente com o tempo de decaimento, e assim é como fazê-lo passo a passo.
Before you trade, you always put your fingers on the pulse of the market. A razão é porque minha pesquisa prova que você pode aumentar as chances de sucesso em qualquer comércio em 85%, simplesmente, negociando na mesma direção que o mercado amplo. If the broad market is even slightly bullish, you use the bull spread strategy, if it’s bearish, I use the same strategy in reverse (called the bear strategy.) Next, focus on the right stock, not the options . Em um mercado de alta, você começa com um estoque que possui opções semanais disponíveis, está em alta tendência e tem pouca volatilidade. Por outro lado, em um mercado de urso, você começa com um estoque que já está tendendo para baixo e tem pouca volatilidade. The next step is to have an “exit strategy.” Always know how and when to get out if the trade goes bad. We can “automate” the entire exit strategy with a few conditional orders. Agora você verificou o mercado. Você encontrou uma tendência de estoque na mesma direção e você tem uma estratégia de saída para se inscrever depois de entrar no comércio.
Let’s assume the market is bullish. O próximo passo seria encontrar um estoque que seja mais otimista do que o mercado amplo. O próximo passo é encontrar uma opção de venda no estoque que você pode vender a um preço de exercício menor do que o preço das ações cairá nos próximos quatro dias.
Você vende uma opção de venda contra esse estoque para trazer em dinheiro, e, ao mesmo tempo, compre um preço de taxa inferior fixado como hedge. A lot of people ask me, “Why buy the lower strike-priced put as a hedge, why not just sell naked puts?”
Existem três razões para comprar o preço de ataque inferior colocado como uma cobertura.
Esta é uma grande coisa. O motivo para comprar o preço de venda mais baixo como hedge é: reduz o capital necessário para fazer o comércio. If you sell puts naked, you’re required to have 50% to 100% of the price of the underlying stock in cash in your account. Ao comprar o preço mais baixo, o preço reduz o capital necessário para fazer o comércio.
O capital exigido agora é limitado à diferença nos preços de exercício das duas opções de venda vezes a quantidade de contratos de opções envolvidos. Então, onde um comércio que envolveu a venda de peças nuas exigiria US $ 250.000 em dinheiro na sua conta, você pode fazer um comércio coberto por US $ 2.500 ou até US $ 250.
Here’s how you make money with these two options.
Nós vendemos uma venda e compramos um preço mais baixo. Nós ganhamos mais pela colocação que vendemos do que gastamos na colocação de preço mais baixo que nós compramos, e a diferença é chamada de crédito líquido.
O crédito líquido é nosso lucro.
Here’s an example to help you grasp the principals and concepts. Let’s say ABC is trending higher. And let’s say it trades at $100 per share. Na terça-feira, você vende o ABC semanal de US $ 90 com preço fixo e compre o ABC semanalmente $ 85 colocado como uma cobertura.
Quando você vende o ABC semanal de US $ 90 com preço de preço ajustado, você traz em dinheiro. Let’s say you sold the ABC $90 put for $1.00. You sold someone the right to “put” the stock to you at $90 until Friday. This won’t happen as long as ABC stays above $90 through Friday’s close.
Ao mesmo tempo que você vende o ABC $ 90, você também comprará o ABC semanal $ 85 colocado como uma cobertura. This dramatically lowers the capital required to do the trade and limits your risk. Let’s say you spend .50 buying the ABC weekly $85 put.
OK, neste momento você vendeu o ABC $ 90 por US $ 1,00. Você comprou o ABC $ 85 para $ 50, então seu crédito líquido é .50. In this case, the difference in strike prices is $5.00, and let’s say you used 10 contracts. Your capital required is $5,000 and your credit is $500.
That’s a 10% return in one week!
Neste caso, a ABC é de US $ 100. If ABC stays above $90 through Friday’s close, you will make $500 or 10% for the week on this trade. Se o estoque subir, você ganha. Se o estoque vai de lado, você ganha. Se o estoque cair, você ainda pode ganhar. Enquanto você ficar acima de US $ 90, você ganha. Se o ABC cair abaixo de US $ 90, você perderá algum ou todo seu crédito líquido e algum ou todo o seu capital de $ 5.000 necessário para fazer o comércio.
Para evitar isso, você pode sair deste comércio a qualquer momento, mesmo antes do ABC cair abaixo de US $ 90, então você tem controle total. The best way to avoid a loss is to use stocks that are already trending higher and going deep out of the money, below the stock’s current price, so you have some “cushion” in case the stock drops.
OK, let’s have a quick review.
My 7 Simple Steps to Weekly Options Profits…
Passo 1: Obter a lista de ações que possuem opções semanais disponíveis.
Step 2: Pick a couple of stocks you’re at least somewhat familiar with.
Step 3: Look at a six-month chart on each of the stocks you’ve chosen. What you want to do is determine—as best as you can — the pre-existing trend of the stock. For example, if the broad market’s trend is up and the stock’s pre-existing trend is up and looks good… then, and only then, do I take a look at the stock’s weekly options to see if there is a potential trade.
If you want, you can use some “trend criteria” to help you see the trend.
This trend criteria can be anything you want that helps you identify the underlying stock’s current trend, because the current trend of the underlying stock is critical. Some people use moving averages, but you can use whatever you’re comfortable with. Quando você encontra um estoque que está em uma tendência bem crescente e você pode ver claramente o suporte, então escolher as opções torna-se mais fácil.
Step 4: After you find an appropriate stock, look at strike prices that are below the current stock’s price, at a level that the stock is not likely to hit in the next week. You can base this on the “average true range” of the stock—or however else you’d like to.
Passo 5: Em seguida, entre em linha e veja as cotações de opções de venda ao vivo e semanalmente. Look for a spread between two put options that have strike prices that are below the current stock’s price and support levels.
Procure também uma diferença específica nos preços das opções para criar uma receita líquida, obtendo mais para colocar você vendido do que o que você pagou.
Step 6: Enter your order using a “limit order” and apply your exit strategy at the same time.
Step 7: Sit back, relax, and let time pass , as it always does. One week later, both options will expire and the “net credit” you took in can be transferred into your wallet — or you can leave it in your account. It’s up to you!
Esta é a maneira # 1 de fazer renda semanal com opções.
THE SPECIAL OFFER.
Here’s something that may help you even more. I’m giving a free webinar all about this strategy. You can register to attend the webinar on this page -
Jack Carter iniciou sua carreira comercial como corretor de bolsa treinado em Wall Street em 1984. Mais tarde, fundou a Superior Information, uma empresa voltada para a publicação de informações opcionais sobre estoque e opções para comerciantes e investidores, em 1997.
Throughout his career he has also been a Nasdaq Market Maker and a “fast money” trader. Jack Carter também é conhecido como consultor superior. He has customers and clients on every continent and regularly consults with traders and individual investors. Sua empresa agora tem uma equipe de contribuintes e melhores comerciantes que servem comerciantes de ações e opções e investidores com seus próprios serviços de negociação de ações e opções.
How to Retire in 5 Years or Less on $13,000 per Month,
By Peter Schultz, Cashflow Heaven Publishing.
Retiring in five years or less on $13,000 per month, tax-free is a pretty compelling idea—but is it possible? At Cashflow Heaven, that’s exactly what we teach. Our goal is to show you how to safely and effectively generate cash flow from the stock market, completely tax-free. Once you learn how to do that, you can literally create an income—perhaps even enough to become financially free—from anywhere in the world you can find an Internet connection.
Now as appealing as that sounds, you are going to need a good strategy to make it happen. The strategy needs to be safe and work consistently so you can depend on it while still providing extraordinary returns. The truth is $13,000 per month is a pretty tall order.
And it’s an especially daunting task to try and generate that income the way most people do it. If you’ve met with a professional financial advisor, you know it can be a pretty sobering experience. For example if you want to generate $13,000 per month it comes to $156,000 per year ($13,000 per month x 12 months).
Conventional Investing for Retirement Requires a Lot of Money—Maybe Too Much Money.
At conventional interest rates, you are going to need a lot of money to generate that level of income—maybe more than you have. For example, the interest rate on the 10-year Treasury bond is hovering below 2%--and the dividend yield on the S&P 500 is also around 2%.
So at an annual rate of return of 2% you are going to need $7,800,000 to generate $156,000 per year. That's a huge amount of money. If you've got almost eight million dollars, congratulations. However you don't have to be good at demographics or statistics to know that most don't. If you're dealing with somewhat less than that, you need to get far better than conventional returns.
Now maybe you're already a savvy investor—maybe you’re in some higher-paying dividend stocks that generate 5% per year—the upper limit of typical dividend stocks. But even at 5% you're going to need over $3 million to generate $13,000 per month. As you can see, at today's returns and interest rates, you need a tremendous amount of money to create a really good income.
You don’t need to get hung up on the $13,000 per month figure--maybe you don't need that much money, maybe you need a lot less. We're just using that as an example because that's an amount most people can live on pretty comfortably--if you keep your trips to Starbucks to a minimum!
To reach our goal, we need to get substantially better returns than what the conventional strategies offer. Most people have mutual funds along with some dividend stocks, but are understandably dissatisfied with their returns and want to do better.
You may be an individual who's really investigated trading and perhaps doing a lot of trading right now. Some people are even day trading. The problem with active trading is you can get mixed results. Many traders I’ve spoken with go one step forward and two steps backward. You can have losses, and it can be pretty stressful. Oftentimes the market throws some pretty frustrating curve balls.
So even if you are an active trader and enjoy it, take a look at this method because it's a way to generate excellent and frequent cashflow that tends to grow your account faster than any other strategy I’ve seen—and the best news is you don't have to worry so much. If you're an active trader, that alone is going to be a refreshing change. In the world of investments, however, there's always uncertainty, and if you've been trading, you know that. We need as much going for us as possible, and this plan has a mathematical probability of winning that is greater than 80% on every trade you place.
The trick with any investing is to try and get the greatest amount of return possible for the lowest amount of risk. And that's what this strategy provides—high probability and high returns. Most investment advisors tell you that’s impossible—to get high returns you must take on higher risk—but that’s not true if you have a strategy that provides an overwhelming mathematical edge.
To Make Bigger Safer Returns — Get a Nobel-Prize-Winning Formula Working for You.
So how do you engineer high returns and a high probability of winning? We're basing our expectations on a formula that is so remarkable it won the Nobel Prize back in 1997 for the mathematicians that discovered it.
The formula was actually developed back in the early 70s, and it made standardized options and the modern options market possible back in 1973. That formula is called the Black-Scholes Options Pricing Model—and here’s what it looks like:
Now, if you are thinking that looks really complicated and wondering how are you going to figure it out--don’t worry—you don’t have to. The good news is you don't need to know all the complex workings of the internal combustion engine to drive your car to the bank—and it’s the same idea here. You just need to know enough to take advantage of it.
We’re going to use this formula to stack the odds in our favor, and to set up a mathematical expectation of winning the majority of the time. The key to using this formula to our advantage is to be selling options instead of buying them.
This gets into a really interesting area of psychology. Most options traders are buying options for one simple reason--they are looking for a home run. They want to double or triple their money in a very short amount of time. And the truth is, if you buy options, you will get some big winners.
But there’s a problem with that approach. If you talk to a lot of options traders, they’ll typically tell you things were going really good for a while, and then all of a sudden they blew up their account. They lost all their money.
A funny thing happens in the stock market: sometimes the things that you think are going to happen, don't. You get surprises. The market turns around. It reverses. The Fed makes a certain announcement. The company that you're betting on comes out with a warning, or whatever. Whatever you thought was going to happen didn't--and that’s what makes options buyers go broke.
When you become an option seller you are on the opposite side of that trade, so the odds jump considerably in your favor. A lot of surprises can happen and you can still make money. That's what I love about selling options. I've been an options trader for a long time now and I still occasionally buy an option when there's a really good setup—but the vast majority of the time I’m selling options because the odds are so stacked in your favor you can actually screw up and still come out okay.
When we talk about selling options, we’re not talking about covered calls or selling naked. The strategy I’m talking about is selling credit spreads. When you sell a credit spread, you immediately take in money, and it's pretty inspiring to see that cash hit your account right off the bat.
A credit spread is simply selling an option and then buying another option to hedge. The option we're selling is more valuable than the one we're buying so it creates a credit in our account. A credit is money that you can use for anything you want—to buy the things you need, or to build up in your account for even great profits.
The stock is up at 107 and we’re going to sell a put option down at 99 and we're also going to buy another option as a hedge below it at 98. That limits our risk to just the distance between them, and in this case, that's just a dollar.
We're selling the 99 puts for 30 cents and buying the 98 puts for 23 cents and as you can see, there's a finish line on October 28. So in this case we’ve got about three weeks until expiration. One of the beauties of this strategy is you always know where your finish line is. At some point, in the not too distant future, these options are going to cease to exist. And if that time comes and the stock isn’t below 99—then both options expire worthless. And if you sell these spreads correctly, that’s exactly what happens the vast majority of the time.
If you ask speculative options buyers how they lost money, they’ll almost always tell you their option ran out of time before the stock could move in their direction. When that happens, the options seller is the one who makes the money. That’s who wins the majority of the time, and that’s who we want to be.
If we sell the 99 puts for .30 and buy the 98 puts for .23 we collect a net of .07 cents on that trade—or $700 for 100 contracts. To figure out our rate of return, we divide that .07 credit by our possible loss. The maximum that you can lose is the distance between the strikes, in this case, that's $1 but we've already taken in seven cents so the maximum we can lose is 93 cents. If we divide seven cents by 93 cents, it comes to a 7.5% return before commissions. For three weeks of time, that's 2-1/2% per week. If you get out your calculator and figure out what 2 ½% per week adds up to over time, you could become extremely rich trading this strategy.
These returns can pile up on themselves pretty quickly. It's like the old compounding illustration with the chessboard where you take a penny and put it on square one and you go to the next square and double it and go to the next square then double that, and then keep doing that for the rest of the squares on the board.
That's the way these compounding returns work—you make money on the money you just made. We get some pretty decent returns, so keep in mind, people are hoping to make 2% or 3% on their money for a year with bonds and regular dividend stocks. We're talking about making 7.5% in just three weeks!
You can also go above the stock and do the same thing with a call spread and take in another 7.5%. Now we're up to 15% for that same three weeks of time. We've got lots of room for the stock to move, but not a lot of time to do it, so you tend to win on these trades the majority of the time.
If you have a stock that's going up, you want to sell put spreads. If you have a stock that's going down, you want to sell call spreads. But oftentimes the stock is moving up and down within a range so we can sell both spreads, collect a double return, and have that stock stay within the range we’ve defined with both expiring worthless.
When we sell both call spreads and put spreads on the same stock, they are called ‘wings,’ and the whole trade is called an Iron Condor .
You can see how forgiving these trades are because we're staying away from the stock price and giving the stock room to move. The stock can go up a little bit, it can go down a little bit, it can waver all around and you still end up winning.
That Sounds Good, but How Do You Know What Your Chances of Winning Are?
You can look at the above trade and think the chances of winning are pretty good—but how do you know? Well, one of the neat things about options is that they are based on a mathematical formula. So whenever we want to sell an option, we can instantly see what the odds are that will expire worthless. That's one of the really cool advantages of this strategy—I don't know anywhere else you can do that.
Our favorite broker for this strategy is Thinkorswim, because they have such good analytical tools, and such a great trading platform. Fortunately, with a little guidance, their platform is not hard to use—in fact, I'll show you a little bit of it right here:
This is the trading platform at thinkorswim, and if you look at the column on the far right, you’ll see a heading that says ‘Prob OTM’—that means ‘Probability of being Out of the Money’. In other words, it tells you the exact mathematical probability of this trade winning—because if the sold strike expires out of the money, the options seller wins.
One of the red arrows on the platform above points to the 98 strike price and the other points to the 99 strike price. We want to focus on the 99 strike price because that’s the one we sold. If we follow the red arrow all the way over to the far right column, we’ll see that the probability of this strike expiring out-of-the-money is 88.96%—so those are our odds of winning--which is pretty high.
It’s interesting that these probabilities actually do tend to play out over the long run, which makes your odds of winning close to nine out of 10 trades. Which is fantastic, but even on the trades that become threatened, there are things we can do to fix them when they do go against us.
Trade with Confidence Knowing You Can Fix Trades that Aren’t Working Out.
We call these little fixes “adjustments” and they give you a second chance to win if the trade doesn’t work out the first time. Everybody's always very interested in adjustments because they give you a kind of “get out of jail free card” where you can fix those one out of 10 or two out of 10 trades that aren’t working out.
Knowing how to adjust gives you a lot of confidence, which is important if you are trying to use this strategy to retire.
I know it sounds crazy, but sometimes I welcome a trade that needs to be adjusted because it says 2 things:
Number 1 , We're selling close enough to the underlying to have to adjust once in a while. “Selling close” means we're bringing in more money. In other words, we're right at that edge where we're bringing in the maximum amount of dollars and still trying to minimize our risk. When you do that, when you sell a little closer to the underlying, once in a while you're going to have to adjust, but that's okay because we have some great ways of doing that.
Number 2 , We have the means to adjust our way out of almost any situation. That makes you feel pretty darn confident in trading this way. Now I just want to be clear upfront, it is possible to lose trading credit spreads. The market can do crazy things, so it’s good to know that even in a worst-case scenario, the amount you can lose is absolutely limited—that’s why we buy that hedge option to limit our risk. But in any normal market situation, even if your spread is over-run, we've got ways to adjust out of it to make the trade better.
So the vast majority of the time, you can expect to win using this strategy, but it’s important to understand there is risk in trading—but we’re going to be stacking the odds in your favor as far as we possibly can.
Sounds Good. But is Anyone Actually Doing This Successfully in the Real World?
Yes—lots of people are quietly cashflowing the markets using this strategy with great success. But nobody talks about it because everyone wants to sell you on the idea of making lottery-size profits buying options. But once you figure out what’s really going on, you’ll realize the real money is being made by the lottery ticket sellers.
We’ve been showing people how to sell credit spreads successfully since 2018, and we’ve got a lot of people that are real believers—they tell us with great conviction they wouldn’t trade any other way.
I want to share an email I got from one of our subscribers. I just absolutely love this guy’s attitude—his name is Bob Milota. He's the kind of guy that really gets the strategy. He’s a retired engineer so he understands numbers and probabilities—Bob is a smart guy.
After doing lots of different kinds of trading, he decided that this is all he wants to do now. This is what Bob says: "As promised, here are my trading results for the year. I very nearly had an undefeated season in my high probability credit spread trading this year. Unfortunately, I suffered my first loss for the year a week ago. My record so far for the year is, 13 put ratio spreads, all done for a credit. I traded eight iron condors, two of which consisted of three credit spreads because I closed the winning-est side and rolled in. Plus five single credit spreads, one of which is the above-mentioned loss.”
That amounts to 25 wins and one loss, which is a 96% success rate.” He goes on to say, "I made a total of $19,126 making $1,594 per month and averaging a return of 9.5% per month, including all commissions and losses."
That's pretty wonderful for Bob and those like him. I know people that are taking second jobs to make an extra $500 a month—but Bob, with a few mouse clicks, is making far more. Plus he says it’s kind of fun--and I agree. He says it keeps him sharp and it keeps him interested. He's making about $1,600 per month and that amount is constantly increasing. And we've got people that are doing a lot better than that.
So the returns are there and your probability of winning is high—but can we do even better?
Building Up Your Account Quickly and Consistently is a Big Benefit—but How Can We Do It Tax Free ?
There is a special account where we can trade these credit spreads so that they can potentially build to infinity without having to pay ANY tax on the profits…Ever!
This special account is called a Roth IRA.
This kind of an IRA has some special advantages that make it perfect for trading high-probability credit spreads. Here the characteristics of a Roth:
Contributions are not tax deductible—however… You can contribute up to $5500 per year under age 50, and $6500 over age 50. Direct contributions to a Roth IRA may be withdrawn tax free at any time . Earnings may be withdrawn tax free and penalty free after age 59-½. Distributions from a Roth IRA do not increase your Adjusted Gross Income, so these earnings do not increase your tax bracket on your other income. The Roth IRA does not require distributions based on age. All other tax-deferred retirement plans require withdrawals by 70½. Unlike distributions from a regular IRA, qualified Roth distributions do not affect the calculation of taxable social security benefits. Assets in a Roth IRA can be passed on to heirs. Single filers can make up to $110,000 to qualify for a full contribution and can make $110,000 to$125,000 to be eligible for a partial contribution. Joint filers can make up to $173,000 to qualify for a full contribution and $173,000–$183,000 to be eligible for a partial contribution.
As you probably noted from the list above, the most compelling characteristic of a Roth is that you can build up any amount of wealth in the account--and as long the distributions are taken after the age of 59-½, the money you take out is Completely Tax Free.
Combine that huge advantage with a strategy that consistently makes money, and you’ve got a blueprint to create a comfortable retirement no matter where you are at now.
So Your Odds of Winning are Excellent—And Now You Have a Way to Build Up Those Profits Tax Free— But How Much Can We Expect to Make?
We typically shoot for 15% to 25% returns for just two weeks of time. But it’s important to realize you want to hold back about a third of your account in cash for buy-backs and adjustments, so you’re not getting those returns on the whole account. Plus, in spite of our best efforts there will be losing trades—that’s how trading works, so we have to factor those in.
Trading this strategy with our probability of winning typically returns about 20% every two weeks. Now if you are a speculative trader that might not sound like much—but it is when you consider your win ratio. If you are consistently making that kind of money every two weeks, you are going to be very wealthy within just a few years.
But let’s say you’re a little skeptical about those returns. Let’s say that in the real world something always happens, and our theoretical rate of return doesn’t quite materialize.
Let’s say that all you can generate is just 5% per month—not 20% every two weeks, but just 5% per month—that’s about a quarter of what we can mathematically expect even factoring in losses and holding a portion of the account in cash.
If the maximum we can put into a Roth is $6,500 per year—and we faithfully put that in every year—what does your account turn into at “just” 5% per month? Here’s what your account looks like if you invest $6,500 per year and get 5% per month over a five-year period:
Now I realize the real world is different than the calculator world—sometimes you’ll be better per month and sometimes you’ll do worse— but what if you even come close?
Even at these modest projections at the end of year 5 your account has grown to over a quarter of a million dollars! At that point, you can start living off some of your profits and still see your account grow. And the inspiring thing is all it took was an investment of $6,500 per year—an amount most people can save or already have.
Which means you probably aren’t more than five years away from a comfortable retirement—and maybe sooner if you monthly needs are less---all you need is a little know-how to make it work.
I’ve put together a complete presentation on how to trade this strategy. You’ll see our favorite way to adjust a spread if it is moving against you so you’ll never have to worry about stock reversals. I will also show you more actual examples of how to set up your trades so you really get the concept.
Plus, I’ll introduce you to others that are trading this way, including my cousin Ralph out in Chicago, and a lady that is managing a fund making millions of dollars per year selling options. So you’ll be able to see this concept works no matter how big your account gets.
And I’ll you’ll see the proof—you’ll get a link to interviews with her where you can see for yourself what she’s doing. I guarantee that you’ll come away inspired.
I believe so strongly that this strategy can make a beneficial change in your financial situation that I want you to access this special presentation for free. It’s only about 60 minutes, but it could change your life.
Once you register, I’ll also send you our Tuesday night updates so you can see for yourself how these trades work in the real world.
CLICK HERE to sign up for the complete presentation. You’ll be able to control the presentation with forward and back controls and a pause button so you can take it all in at your own speed—and even take notes if you like.
And once you see this concept, if you have questions you can call our office toll free at 1 877 507-7878 , or email us at customerservice@cashflowheaven .
I truly believe that anyone who follows my instructions can make money trading this way—even if you’ve had little success trading in the past. If you watch just five minutes, I suspect you’ll be watching the whole thing—in fact you might even have a little trouble sleeping because the math and probabilities are so compelling—even starting with a fairly small account.
So once again, CLICK HERE and I look forward to showing you a little-known but amazingly effective way to create a level of cash flow that makes it more possible than ever to retire on your own terms.
Keep up the good work, and I’ll look forward to seeing you inside the presentation,
Peter Schultz has been showing self-directed investors how to trade successfully since 1996, and is a nationally known speaker on options trading, the author of Passage to Freedom, The Options Success Trading Package, The Winning Secret Trading Package, The Explosive Profits Package and The Greatest Options Strategies on Earth. He has also written several important short reports on innovative options techniques, and is a popular guest on radio and television talk shows pertaining to trading and the financial markets.
Fascinated by the idea of asset-produced monthly income, Peter founded Cashflow Heaven Publishing in 1999 to help people obtain a better lifestyle through trading and investing strategies designed to produce exceptional monthly returns.
Peter graduated in 1982 from Southern Oregon University with a Bachelor of Science degree in Business with marketing and finance concentrations. He is happily married with three children and makes his home in Ashland, Oregon. “on the eastern shores of Bear Creek somewhere north of Siskiyou Pass.”
Harnessing Volatility for Income.
By Steve Smith, YoloPub.
In the month since July 12 when the S&P 500 Index finally pushed to a new all-time the index has been essentially sideways causing both real and implied volatility readings to drop to historically low levels. This volatility crush presents a significant challenge to option traders looking to generate income.
But one instrument that can be harnessed to deliver reasonable returns over time are those related to market volatility itself; namely VIX related options.
Before getting to the specific strategies a little background on the nature and nuances of these products are in order to make sure we understand statistics and structure the drive the behavior of securities and options tied to implied volatility.
The Chicago Board of Options Exchange created the its VIX Index back in 1992 as a means of measuring the 30-day implied volatility of options on the S&P 500 Index. The goal being to provide a snapshot of how much people were willing to pay for options as an expression of expected price movement of the broad market. It quickly was given the “fear gauge” moniker given VIX tends to rise during market sell-offs as investors are willing to pay higher premiums to protect their portfolios during sell-offs.
But it wasn’t until 2004 when futures contracts based on the index was launched that one could actually trade the well-known Futures were subsequently followed in 2009 by Exchange Traded Notes such as iPath S&P 500 VIX Short-Term (VXX) and the Velocity Shares 2x VIX Short Term (TVIX) and their related options.
The timing was of the 2009 launch was both fortuitous and unfortunate. The former for exchanges such the CBOE and issuers such as Barclay’s as this new “asset class” for hedging have become wildly successful in terms popularity, assets under management and trading volume.
But for uninformed investors that thought they could own these as long term hedge VIX related ETPs have been an unmitigated disaster.
For example, the VXX has declined by 99.6% since inception as its shares, which have undergone five 4:1 reverse splits, have sunk from $32,000 to the current $36 on a split adjusted basis. That’s some $5 billion in value that’s been vaporized.
Statistics and Structure.
As we’ll see these can be tricky to trade, and are best used for shorter time frames. Basically; VXX is a chimeric creature; it’s structured like a bond, trades like a stock, follows VIX futures, and decays like an option. But once understand some of the basic concepts they can be used for fairly predictable profits.
Some important points:
The VIX is mean reverting statistic. Its 20-year mean is 18.8. The VIX “cash” Index cannot be traded directly. The daily change in VIX has had a -0.76 correlation to the daily change in SPY since Jan. 30, 2009. Meaning every $1 change in the SPY the VIX will move inversely by approximately 0.75. On average VXX moves only 55% as much as the VIX index. The VXX will loss at the average rate of 4% per month ( 30% per year ) Ceteris paribus. All else being equal.
This last item, that is the downward drift is in the value of VXX , is what we want to focus on for harnessing profits in trading its options.
The VXX ’s goal is to maintain a 30-day measure of implied volatility. Since it can’t own “cash” VIX is constructed through the purchase of futures contracts. It uses a balance of the front two month contracts. Each day it must be rebalanced, that is sell some of the front month and buy some of the second month to maintain the 30-day weighting. This is where it gets good.
The term structure in normal volatility environments one in which later dates trade at a premium or higher prices. This is known as contango and comes from the notion that given a longer period of time the higher the probability of large price change or increase in volatility.
A normal cantango term structure can be seen here:
Under these circumstances VXX suffers from negative roll yield when the CBOE VIX futures curve is in contango. Each day the VXX Fund must “roll” its futures to rebalance to the later contract and as the expiration date nears, it is forced to sell its closest to expiry contracts and buy the next dated contracts. The purchases are often at higher prices if the curve is in contango, thus losing the spread amount between the two contracts that are rebalancing.
There are some periods when volatility spikes higher and the near term futures will trade at the premium to the later dates on the; this is known as ‘backwardation.’ It is based on the notion that at some point in the future volatility will subside back to normal levels. Again, the concept of VIX being mean reverting.
During the financial crisis the VIX hit extreme levels and the futures went into steep backwardation as can be seen below.
Even in the above backwardation in which the near term futures are now at a premium there is downward pressure on the futures as must ultimately converge towards the “cash” VIX which in this instance trade at a discount.
During the financial crisis the VIX futures remained in backwardation for an extended period of nearly 8 months, but typically these spells are much shorter and usually last just a few days to a week or two. Again, the notion being that eventually VIX reverts to its mean near the 20 level.
So, even though the rates of decay in the VXX can vary depending on the overall movement of the SPY and the term structure of the VIX futures, it definitely heads lower over time. The chart below give a graphical history of their decay rates. Each data point is computed using the cumulative gain or loss over the previous six months and a monthly compounding period. None of these ETPs existed before 2009 (the first one, VXX started in January 2009), so the data prior are based on a model from the CBOE.
Trade One: Catch the Drift.
Now, given the above one might ask, “why can’t I just short the VXX or sell calls, sit back and watch them go down?”
The issue is when volatility spikes in volatility, which it does inevitably and unexpectedly 3-4 times a year, the move tend to be vicious with 30%-50% increases within a matter of days out not out of the ordinary.
That might work for an institution that can do some sophisticated multi-market hedging or a deep pocketed investor with a high risk tolerance who could ride out the pain but for most of us such a move could a create a loss wiping out several expiration cycles of gains.
What if use a spread to limit risk? We are not the first to think this way and the option prices reflect the known risks and pricing behavior. The problem here is the drag of cantango decay is well known and fairly well priced into the options.
For example, with the VXX trading $37.30 the 38/40 call spread (1.8% out-of-the-money) and $2 wide between strikes with 30 day’s until expiration would be worth approximately $0.50.
Conversely a similar vertical put spread, the 34/36 put Spread (3.4% out-of-the-money) trades at $1.00 or double the value despite it being even further out of the money.
The conclusion being this “Decay Premium” is priced in and generally speaking basic vertical spreads are not the most efficient way to make a bearish speculation.
My approach is to use a butterfly spread as a lower cost, higher reward way to target the expected drift lower.
A standard butterfly spread uses a 1x2x1 construction. On a long butterfly you buy the outside or “wings” and sell the middle strike or “body.” The maximum profit is realized if shares of the underlying at the middle strike on expiration.
Based on the knowledge the VXX can be expected drift approximately 4%-5% lower per month all else being equal I want to target the $33 level (a 10% decline from the current) in 60 days.
In mid-August with the VXX trading around $37.30 the specific trade would look like:
-Buy 10 contracts October 36 Put.
-Sell 20 contracts October 33 Put.
-Buy 10 contracts October 30 Put.
For a $0.35 Net Debit or $350 for the 10x20x10 contract position.
As you can see from the risk graph below the maximum loss is the cost ($350) and would be incurred if VXX is above $36 or below $30 at the October expiration.
The maximum profit is $2,650 and would be realized if shares are at $33 on expiration.
The presents us with a very attractive 7.5x profit to risk ratio.
Now, it is unlikely VXX will be exactly at $33 on expiration but given the known downward directional bias there is a high probability that it be within the profit zone of $30.40 and $35.70.
And given the attractive risk/reward profile this a strategy when can repeat on a three to four week expiration cycle on the expectation that over time the downward drift of the VXX will land you in the profit zone more often than not.
Trade Two: Mean Reverting Trade: Sell Call Spreads.
My other approach is based on the concept volatility is mean reverting and that spikes higher will be relatively short lived.
It needs to applied on a very selective basis only when a certain set of criteria are met. Nomeadamente:
The VIX has climbed at least 35% within the past 5 trading sessions The VIX is above 25% level Implied volatility of the VIX or VXX options is above the 95% level.
As you can see these criteria often coincide and typically only occur 3-4 times a year.
If the above situation presents itself then:
Sell a call credit spread in which:
The lower strike sold is at least 10% out-of-the-money. Two - three weeks until expiration. The Net Credit is at least 30% of the width between strikes (ie $0.30 per $1.00 wide).
Over the last 20 occurrences in when the above criteria have been met this strategy has delivered the maximum profit 19 times. The lone loss was incurred during the September, 2018 when the sequestration led to a government shutdown. .
Trading volatility products can be tricky but if armed with the knowledge of how the price and products behave can be profitable when the appropriate strategies are applied.
Learn How to Trade Options Simply, Effectively and Profitably.
Stop wasting time using bad methods for finding trades. Put that time back into the enjoyment of your life A trick to get rid of low probability trades will make you more successful The one key component you need to be more profitable no matter what you trade.
Steve Smith is an expert options trader with 25 years’ experience in the markets.
Steve was a seat-holder of the Chicago Board of Trade (CBOT) and the Chicago Board Option Exchange (CBOE) from 1989 to 1997. He joined YOLO publishing in 2018 and is currently the editor of The Option Specialist and runs the 20K Portfolio Program, which provides all types of options trades for all types of traders.
The 4 Step Trading Process.
By Sean Kozak, GoldenZoneTrading.
In the following video Sean Kozak, founder and head trader at the Golden Zone Trading, walks you through his 4-step trading process during a recent live trade. We use this process to help deal with market volatility while trading a rules based strategy. We’ve outlined the play-by-play explanation of each step below for your convenience.
# 1. Identify Directional Bias.
When entering into a trade, you will first need to assess the direction of the market. We encourage all of our traders to trade WITH the markets instead of against it, as we find this makes trading much simpler. We assess market structure, order flow and volume while using scanners to identify sentiment prior to trading. Keep in mind, we avoid trading into news at all costs, as this poses unhealthy trading climates.
Once you’ve determined the direction of the market, you’ll want to identify your entry point for the trade. Whether buying in demand or selling in supply, it's all relative to our directional bias determined in step #1. It's important to have a variety of setups to choose from, so that you can adjust the trade choice based on market conditions. We implement various trades that can be used on both trending an oscillating markets.
Planning the trade involves mapping out several aspects of the entry, exit, probabilities and qualifiers. Prior to execution, we always approach the trade from a proactive state not a reactive state. This makes for less emotional interference while providing a stronger trading plan for entry and exits. Sometimes the market will allow for ample time to asses trade planning while other times we will be forced to make a quick decision. Knowing your strategy and practicing beforehand makes for steady aim!
It can be argued that trade management is the most important part of any trade, because it’s the exit that gets you paid! The management phase involves two aspects:
● Managing the stop loss and targets for risk while attempting to lock in as much profit as possible, and.
● Managing your emotions and expectations of the trade based on what the market is actually showing you is possible at that time.
It's important to accept hitting base hits is just as important as home runs. We will trade for small wins, large wins, breakevens as well as small losses, BUT NEVER LARGE LOSSES !
In conclusion, this 4 step trading process is the backbone to how we prepare for our trading day. Without structure or a plan of attack it's extremely hard to trust your abilities to remain consistent.
Join us in our live Trade Room to see how we trade every Wednesday and Thursday from 9:00 AM to 11:30 AM ET. CLICK HERE to register for your FREE GUEST PASS!
Sean Kozak is a global assets trader specializing in Order Flow® & volume strategies for day & swing trading. His passion & experience for the markets has influenced him to develop comprehensive software products & training programs designed to teach others his techniques and strategies.
He is the Founder/Head Trader of Golden Zone Trading whose chief aim is to provide turnkey software solutions & live market training for active traders. His success in both trading and software development, led him to work with traders globally as a mentor, strategy developer, and trading educator.
He has held positions at private trading firms, holds industry licenses and was mentored by former market makers on the CME (Chicago Mercantile Exchange) & CBOE (Chicago Board of Options Exchange) allowing him to hone his trading skills and become a respected leader & educator in the industry.
Naked Put-Writing: A Strategy for All-Hours.
By Lawrence G. McMillan, McMillan Asset Management.
The sale of a naked put is often a very attractive strategy that is conservative, can out-perform the market, can have a high-win rate, and can be analyzed and sometimes constructed in non-market hours. In this article, we’re going to look at some of the background on put writing, show a systematic way to select which puts are best to write, and finally explain how you can implement them into your trading arsenal “outside normal hours.”
The methodologies described herein are ones that I have confidence in, for they have produced profitable results in actual recommendations and in trading accounts that we manage over time. However, there may be other profitable approaches as well. I am not maintaining that this is the only way to analyze put writes – only that this is one viable way.
Option Selling is Conservative.
The basic concept of option writing is a proven investment technique that is generally considered to be conservative. It can be implemented as “covered call writing” or, alternatively, “naked put writing” which is the equivalent strategy to covered call writing.
In either case, one is selling a wasting asset, and over time the cumulative effect of this selling will add return to a portfolio, as well as reducing the volatility of a purely equity portfolio.
People sometimes stay away from uncovered put writing because they hear that it is "too risky" or that it doesn't have a sufficient risk-reward. The truth is that put selling, when secured by cash, is actually less risky than owning stock outright and can out-perform the broad market and the covered-writing index over time.
Covered Writes vs. Naked Put Sales.
First of all, it should be understood that the two strategies – naked put writing and covered call writing – are equivalent. Two strategies are considered equivalent when their profit graphs have the same shape (Figure 1). In this case, both have fixed, limited upside profit potential above the striking price of the written option, and both have downside risk below the striking price of the written option.
One very compelling, yet simple argument in favor of naked put writing is this: commission costs are lower. A covered write entails two commissions (one for the stock, the other for the written call). A naked put requires only one. Furthermore, if the position attains its maximum profitability – as we would hope that it always does – there is another commission to sell the stock when it is called away. There is no such additional commission for the naked put; it merely expires worthless.
Nowadays, commission costs are small in deeply discounted accounts, but not everyone trades with deep discount brokers. Moreover, even there, it doesn’t hurt to save a few dollars here and there.
So, a naked put sale will have a higher expected return than a covered call write, merely because of reduced commission costs.
Another factor in utilizing naked puts is that it is easier to take a (partial) profit if one desires. This would normally happen with the stock well above the striking price and with a few days to a few weeks remaining before expiration. At that time, the put is (deeply) out of the money and will generally be trading actively, with a fairly tight market. In a covered call write, however, the call would be deeply in-the-money. Such calls have wide markets and virtually no trading volume.
Hence, it might be easy to buy back a written put for a nickel or less, to close down a position and eliminate further risk. But at the same time, it would be almost impossible to remove the deeply in-the-money covered call write for 5 or 10 cents over parity.
The same thinking applies to establishing the position, which we normally do with the stock well above the striking price of the written option. In such cases, the call is in-the-money – often fairly deeply – while the put is out-of-the-money. Thus the put market is often tighter and more liquid and might more easily be “middled” (i. e., traded between the bid and ask). Again, this potentially improves returns.
The above facts regarding naked put writing are generally known to most investors. However, many are writing in IRA or other retirement accounts, or they just feel more comfortable owning stock, and so they have been doing traditional covered call writing – buying stock and selling calls against it.
But it isn’t necessary, and it certainly isn’t efficient, to do so. A cash-based account (retirement account or merely a cash account) can write naked puts, as long as one has enough cash in the account to allow for potential assignment of the written put. Simply stated, one must have cash equal to the striking price times the number of puts sold (times $100, of course). Technically, the put premium can be applied against that requirement.
Most brokerage firms do allow cash-based naked put writing, however, some may not. Some firms may require that you obtain “level 2" option approval before doing so, but that is usually a simple matter of filling out some paperwork. If your brokerage does not allow cash-based putselling, you can always move the account to one that does, like Interactive Brokers.
Once you write a naked put in a cash account, your broker will “set aside” the appropriate amount of cash. You can’t withdraw that cash or use it to buy other securities – even money market funds.
Most put sellers operate in a margin account, however, using some leverage (if they wish). One of the advantages of writing naked puts on margin is that the writer can gain a fair amount of leverage and thus increase returns if he feels comfortable with the risk (as a result, we have long held that naked put writing on margin makes covered call writing on margin obsolete). That is not the case with cash-based naked put writing, though. The returns are more in line with traditional covered call writing.
In summary, put writing is our strategy of choice over covered call writing in most cases – whether cash-based or on margin. Later, when we discuss index put selling, you will see that there are even greater advantages to put writing on margin.
Put-Selling Can Outperform the Market.
The Chicago Board Option Exchange (CBOE) has created certain benchmark indices so that investors can compare covered call writing ($BXM), naked put selling ($PUT), and the performance of the S&P 500 Index ($SPX). Figure 3 compares these indices, with all three aligned on June 1, 1988.
It is clear from the Figure 2 that naked put writing ($PUT) is the superior performer of these benchmark indices. For this reason, naked put writing is the preferred option-writing strategy that we employ in our newsletter services.
Since covered call writing is equivalent to naked put selling – and since Figure 2 merely shows dollars of profit, not returns – you might think that the covered call writing graph and the naked put writing graph would be quite similar.
But there is something more to index put writing – especially writing puts on the S&P 500 index ($SPX or SPY, or even e-mini S&P futures): out-of-the-money puts are far more expensive than out-of-the-money calls.
This is called a “volatility skew,” and it has been in effect since the Crash of ‘87. Institutional put buyers want to own $SPX (and related) puts for portfolio protection, and they don’t seem to care if they constantly pay too much for them. Conversely, other large institutions may be selling covered calls as protection, thereby depressing the prices of those calls. Some institutions do both – buy the puts and sell the calls (a collar). Thus, the main reason that $PUT outperforms $BXM by so much in Figure 3 is that the out-of-the-money puts being sold are far more expensive (in terms of implied volatility) than are any out-of-the-money calls being sold.
We recommend put ratio spreads and weekly option sales in The Daily Strategist newsletter as a way to take advantage of this. Moreover, we have put together a complete strategy – called Volatility Capture – that we use in our managed accounts.
In the Volatility Capture Strategy, we blend all aspects together to produce a reduced volatility strategy that can make money in all markets (although it will not keep pace on the upside in a roaring bull market). The primary focus of the strategy is selling $SPX puts, but there are two forms of protection in place as well.
McMillan Analysis Corp. is registered as both a Registered Investment Advisor (RIA) and as a Commodity Trading Advisor (CTA), so we are able to offer the strategy to both non-retirement and retirement accounts.
Our complete track record and other pertinent details are available by request. For preliminary information and a summary of our track record, visit our money management web site: mcmillanasset.
For more specific information, email us at the following address: info@optionstrategist, or call us at 800-768-1541.
Positions Can Be Hedged.
One of the main arguments against put-selling is that the draw-downs can be large in severe market downturns. One way to mitigate these draw-downs would be to hedge the entire put-sale portfolio. For example, one may attempt to offset the market risk that is inherent to option writing by continually hedging with long positions in dynamic volatility-based call options as we do in our managed accounts.
This is really a topic for another article, but the gist of this protection is to buy out-of-the-money $VIX one-month calls and roll them over monthly. Buying longer-term $VIX calls does not work, for only the front-month contracts come anywhere close to simulating movements in $VIX (and in $SPX).
The Odds Can Be in Your Favor.
As evidenced by the $PUT Index, naked put-writing is a conservative strategy that has the potential to out-perform the broad market over time. When implemented correctly, the strategy can have high rates of success and can also be hedged against large stock market-drawdown. For example, The Daily Strategist and Option Strategist Newsletters have produced a combined 89.4% and 85.6% winners in their index and equity naked put-selling/covered-writing trades since the newsletter started recommending them in May of 2007 and April of 2004 respectively. Investors looking for put-selling trading ideas and recommendations on a daily or weekly basis may be interested in subscribing to one of those services.
Trading Outside Normal Hours.
Naked put-selling is an especially attractive strategy for do-it-yourself investors who do not have time in their day to watch the markets since positions do not need to be monitored closely all day. Put-writers can sit easy so long as the underlying stock remains above the strike price of the option sold. If the stock is above the strike price at expiration, the option simply expires. The option-seller then realizes the initial credit and no closing action needs to be taken. If the position needs to be exited early, usually due to the fact that the stock has dropped below the strike price of the short option, the position can be closed out automatically via a contingent stop loss order.
You cannot trade options outside of standard stock market hours; however, depending on your brokerage, you may be able to place your opening limit order outside the stock market hours. In this case, your order would simply be placed in a queue for processing once the market opened. If your broker doesn’t allow you to place an order outside market hours, you would only need a couple of minutes during the day to either call your broker or hop on your trading software to place your trade.
Another big benefit to naked put-selling is that it doesn’t take much analysis to find good potential trading candidates. In fact, as we do for our newsletters, all of the initial analysis can be done at night with computer scans and a little bit of discretion. The following section will discuss our approach to finding naked put-sale candidates for our newsletters each night.
Choosing What Put To Sell.
For the most part, we choose our put-selling positions for our various publications based on data that is available on The Strategy Zone – a subscriber area of our web site consisting of various data scans and lists of potential trades compiled by our computer analysis. One could do the same sort of analysis yourself, as a subscriber to “the Zone.” On top of that, our Option Workbench provides additional analytical capability for that data.
Our computers do a lot of option theoretical analysis each night – from computer Greeks to analyzing which straddles to buy to graphs of put-call ratios. The Zone was started about 10 years ago, when I decided to make the outputs of our nightly programs available to anyone who was interested in paying a modest amount of money to view them. These analyses are still the basis for almost all of our recommendations.
Expected return is the crux of most of these analyses. For those of you not familiar with the concept, I will briefly explain it here.
Expected return is a logical way of analyzing diverse strategies, breaking them down to a single useful number. Expected return encompasses the volatility of the underlying instrument as a major factor. However, it is only a theoretical number and is not really a projection of how this individual trade will do. Rather, expected return is the return one could expect to make on a particular trade over a large number of trials.
For example, consider a fair die (i. e., one that is not “loaded”). There is an equal, one-sixth chance that any number will come up on a particular roll of the die. But does that mean if I roll the die six times, I will get one once, two once, three once, etc.? No, of course not. But if I roll the fair die 6 million times I will likely have rolled very nearly 1 million ones, 1 million twos, etc.
We are applying this same sort of theory to position analysis in the option market.
For naked put selling, the first thing I look at is the file of the highest potential returns. These are determined strictly mathematically, using expected return analysis. This list is going to necessarily have a lot of “dangerous” stocks listed as the best covered writes. Typically, these would be biotech stocks or other event-driven small-cap stocks.
Next, I reduce the size of the list. I have a program that screens out a subset of these, limiting the list to stocks in the S&P 500 Index only. Individual investors might have other ways of screening the list.
If returns at the top of the list are “too good to be true,” then one can assume that either 1) there is a volatile event on the horizon (meaning the lognormal distribution assumption is wrong), or 2) the volatility assumption used in the expected return analysis is wrong. Throw out any such items. These would likely have annualized expected returns in excess of 100% – an unrealistic number for a naked put write. However, weekly put sales might sometimes be in that range. Those would have to be looked at separately. In general, if the underlying stock is going to report earnings during the week in question, the put sale should probably be avoided.
At this point, I select all the writes with annualized expected returns higher than 24% (my minimum return for writing puts on margin), and re-rank them by probability of profit. Once that is done, I select those with a probability of profit of 90% or higher, and re-rank them by annualized expected return. In other words, I am still interested in high returns, but I want ones with plenty of downside protection. This screening process knocks out most of the list, usually as much as 90% of the initial put writing candidates.
From there the analysis calls for some research, for at this point it is necessary to look at the individual stocks and options to see if there is something unusual or especially risky taking place. Some stocks seem to be on the list perennially – Sears (SHLD), for example, perennially has expensive options due to its penchant for drastic moves.
Another useful piece of information is the Percentile of Implied Volatility. That is listed in the data, and if it is low (below the 50th percentile), then I will likely not write that particular put. Recall that expected return needs a volatility estimate – and for these naked put writes we use the current composite implied volatility. However, if there is the possibility that volatility could increase a lot (i. e., if the current composite implied volatility is in a fairly low percentile), then there is a danger that actual stock movements could be much more volatile than we have projected. Hence, that is not a naked put that I would want to write.
I also look at the absolute price of the option. I realize that is taken into account in the expected return analysis, but I personally do not like writing naked options selling for only 20 cents or so, unless it’s on a very low-priced stock.
The expiration date of the option is important to me as well. I would prefer to write one - or two-month options, because there is less time for something to go wrong. Occasionally, if there is a special situation that I feel is overblown on the downside, I will look into writing longer-term options but that is fairly rare.
These further restrictions reduce the number of writing candidates down to a fairly manageable level. At this point, it is necessary to look at the individual charts of the stocks themselves. It’s not that I am trying to predict the stock price; I really don’t care what it does as long as it doesn’t plunge. Consequently, I would not be interested in writing a put on a stock, if that stock is in a steep downtrend. More likely, the chart can show where any previous declines have bottomed. I would prefer to see a support level on the chart, at a price higher than the striking price that I am considering writing. This last criterion knocks out a lot of the remaining candidates.
Some may say that the stock chart is irrelevant, if the statistical and other criteria are met. That’s probably true, but if I have my choice of one that has chart support above the strike and one that doesn’t, I am going with the one that does every time.
The potential put selling candidates that remain at this point are generally few, and are the best writing candidates. But I will always check the news regarding any potential write, just to see if there is something that I should know. By “news,” I mean earnings dates, any potential FDA hearing dates, ongoing lawsuits, etc. You can easily get a lot of this information by looking up the company on Yahoo Finance or other free financial news sites.
The reason that this news check is necessary is that these puts are statistically expensive for some reason. I’d like to know what that reason is, if possible. The previous screens will probably have weeded out any FDA hearing candidates, for their puts are so dramatically expensive that they would have alarm-raising, overly high expected returns.
But what about earnings? Studies show that the options on most stocks increase in implied volatility right before the earnings. In general this increase is modest – a 10% rise in implies, or so. But sometimes the rise is much more dramatic. Those more dramatic situations often show up on volatility skew lists and are used as dual calendar spreads in earnings-driven strategies. But as far as naked put writing goes, if the expected return on the put is extraordinary, then that is a warning flag.
If a position meets all of these criteria, we officially consider it acceptable to establish and may recommend it in a newsletter.
I realize that many put sellers (or covered call writers) use a different method: they pick a stock they “like” first, and then try to find an option to write. By this “fundamental” approach, one is probably writing an option that has a very low expected return – a la the calls on almost every “dividend stock” in the current market. They compensate for this by writing the call out of the money, so that they will have some profit if the stock rises and gets called away.
To me, that is completely the wrong way to go about it. If you like the stock, why not buy it and buy a put, so you have upside profit potential? What is the obsession with writing a covered call?
Rather than that “fundamental” or “gut” approach, the use of expected return as a guide to the position makes this a “total return” proposition – where we are not overly concerned with (upward) stock movement, but rather more concerned with the combination of option premium, stock volatility, rate of return, and probability of winning. To me, that is the correct approach.
Selecting Naked Put Writes From OWB.
Option workbench makes finding actionable naked put-sale trades that fit all of the criteria in my aforementioned approach quite easy. Once you are logged into the software, one would first access the “broad” scan of potential candidates by hovering over “Spread Profiles” and clicking on Naked Puts.
A list of all the naked put writes that have annualized expected returns of greater than 4% will be shown (that 4% threshold would move higher if T-Bills ever yield anything besides 0%!).
Using the closing data from June 17, 2018, there were 14,449 such put writes! Obviously, one has to cut that list down to a more workable size.
There are a lot of 32 column headings here, and most are statistical in nature. To me, the two most important pieces of data are 1) annualized expected return, and 2) downside protection (in terms of probability – not percent of stock price). Both of these are volatility-related, and that is what is important in choosing put writes. You want to ensure that you are being compensated adequately for the volatility of the stock.
If you click on “A Exp Rtn” (which is Annualized Expected Return), the list quickly sorts by that data. However, in my opinion, it is not a good idea to just sell the put with the highest expected return. The computer calculations make certain assumptions that might not reflect the real world. For example, if there is a large possibility that the stock might gap downwards (an upcoming earnings report, for example), the puts will appear to be overly expensive. Any sort of upcoming news that might cause the stock to gap will raise the price of the puts. You probably don’t want to write such puts, even though the computer may “think” they are the best writes to establish.
In order to overcome these frailties, one would use the “Filter Editor” function of OWB. You can construct a filter to include or exclude writes that do/don’t meet your individual criteria.
If you click on the button (above the data) that says “Profile Filter Editor,” a box will appear. Figure 3 shows the box as it appears in my version of OWB. On the left are three filter names: DTOS Noearnings, DTOS w/ earnings, and TOS No Earnings (mine). In the center of Figure 3, the actual formulae for the filter “ TOS No Earnings " are shown.
To apply the formulae, merely click the “Apply” button (lower right of Figure 3). In this case, the list of 14,449 potential naked put writes shrinks to 64 candidates!
Here are the formula that appear in Figure 3:
InList (‘S&P 500'): include only stocks that are in the $SPX Index. This way, we are not dealing with extremely small stocks that can easily gap by huge amounts on corporate news.
Days>2, days <= 90: include only writes whose expiration date is between 2 and 89 days hence.
Aexprtn >= 24%: only include writes whose annualized expected return is at least 24%
PrDBE >= 90%: only consider stocks that have less than a 10% chance of being below the downside breakeven (DBE) point at expiration.
PutPrice >= 0.25: only consider puts that are selling for at least 0.25.
expdate < nextearnings: only consider put sales on stocks that are not going to report earnings while the put sale is in place. Stocks are far too volatile on earnings announcements, and this will avoid the main cause of downside gaps: poor earnings.
These criteria produce a strong list of put writing candidates. There will be no earnings announcements to cause downside gaps. There is a 90% chance of making money. Over time, writes such as these should produce returns in line with the expected returns – greater than 24%, using this formula.
You can add many other filters (or delete some of these if you wish). It is easy to do within OWB, and I encourage you to experiment with it.
Once the list has been filtered, there is still work to do. Why are these remaining puts so expensive? One might have to look at the news for certain stocks to see why. At the current time, health care stocks have very expensive options: ET, HUM, THC, for example. Not only are these inflated because of takeover rumors, there is also supposedly some Medicare-related pricing edicts coming soon from the U. S. Government. Those things could cause downside volatility; however, one may feel there is enough downside protection to warrant selling the puts. If that were the case, you would have found your trade!
Placing Your Trade.
After you have found your trade the next step would be to determine how many puts to sell. Generally, for a margin account, most brokerages have a margin requirement of 25% of the strike-price of the short put you are selling less the premium received for the sale of the put less the out-of-the-money amount, subject to a 10% minimum. We generally write out-of-the-money puts and set aside enough margin so that the stock has room to fall to the striking price – the level where we generally would be closing the position out. This conservative approach decreases the risk of a margin call if the stock moves against your position.
For example, if you sell a naked put with a strike price of 50 for a credit of 1.00, the margin we would set aside would be $1,150. The formula below illustrates this:
For cash accounts, one would have to set aside 100% of the strike price less the put premium. So, for the prior example, the cash collateral would be $4,900 (50 x 100 – 100).
We generally suggest that one puts no more than 5% of their total portfolio value in any particular put-sale for margin accounts, and 10% for cash accounts.
If you had a $100,000 margin account, you would want to allocate no more than $5,000 to any particular put sale. Using the prior example, you would then sell 4 naked puts ($5,000 / $1,150 = 4.35). Cash based accounts would sell 2 contracts (($100,000 x 0.10) / $4,900 = 2.04).
The next step would be determine your stop. Generally, we like to set our stops at the downside break-even level at expiration. This level can easily be calculated with the following formula:
However, if you cannot watch your position throughout the day, it may make sense to set your intraday stop at the strike price. This means that if the stock trades below the strike price you are short, the position would be automatically closed. That way, there would be no risk of assignment if the stock were below your strike at expiration.
Now that you have determined your quantity and stop, the final steps would be to enter your order (before the open with your brokerage’s order queue if possible), set your stop (via a contingent stop order if your brokerage allows) and monitor. Those who cannot generally participate during normal market hours and whose brokerages don’t allow order queuing and contingent stops, would only need a few minutes to initially place the trade. Furthermore, they would only have to monitor the trade near the market close each day to see if the stock is below their stop. If it were, one would simply buy back the put to close the position.
Do-It-Yourself with Option Workbench.
Those looking to analyze potential naked put-writes themselves, can do so with ease with our Option WorkBench (OWB).
This is the overlay service to our Strategy Zone, and it provides the ability to sort the reports in various ways. More importantly, it allows one to construct his own analysis formulae.
For information on the various features and capabilities of OWB, WATCH THIS VIDEO HERE!
THE SPECIAL OFFER.
Find naked put-sale candidates on your own with a free 30-day trial to Option Workbench. Feel free to use my filter or create one of your own!
Scroll to the bottom and select the one month subscription ($135) and enter the Coupon Code FREEOWB at checkout. No credit card is required. Subscription will not automatically renew upon completion.
Lawrence G. McMillan is the President of McMillan Asset Management and McMillan Analysis Corporation, which he founded in 1991. He is perhaps most well-known as the author of Options As a Strategic Investment, the best-selling work on stock and index options strategies. The book – initially published in 1980 – is currently in its fifth edition and is a staple on the desks of many professional option traders.
His career has taken two simultaneous paths – one as a professional trader and money manager, and the other as an educator and proponent of using option strategies. In these capacities, he currently authors and publishes "The Option Strategist," a derivative products newsletter covering options and futures, now in its 24th year of publication. His firm also edits and publishes three daily newsletters, as well as option letters for Dow Jones. He has spoken on option strategies at many seminars and colloquia, and also occasionally writes for and is quoted in financial publications regarding option trading. Mr. McMillan is the recipient of the prestigious Sullivan Award for 2018, awarded by the Options Industry Council in recognition of his contributions to the Options Industry.
How to Trade Your Retirement Account.
By Kirt Christensen, Trading Science.
The financial crisis in 2008 brought to the fore the delicate balance of saving as you earn, and building up your retirement account. Accounts that were taxable suffered tremendously, and the market need for alternatives became distinctly acute. Counting down to your retirement can be thrilling if you have put aside a tidy sum in your individual retirement account (IRA). The reason that you should opt for an IRA rather than a typical savings account comes down to tax benefits, which ensure that you get a better return than simply following the traditional route. Take a look at Figure 1 for clarification.
Figure 1: Individual Retirement Accounts and Tax Deferrals.
This figure shows you how your investment value from $10,000 can vary in a period of ten years, based on whether you choose an account with a tax deferral and one without. Clearly, the benefit of a tax deferral is excellent, as the benefit exceeds a return of $25,000!!
It is estimated that when you retire, your expenses will take up 85% of your pre-retirement income. Think about how you are saving now. Even when you have a 401(k) that your employer is sponsoring, and you are faithfully contributing to your IRA, it may not be possible to accumulate enough savings to maintain your standard of living.
There are options that you can explore if you want to increase the bottom line of your retirement account. Considering these options will bring you peace of mind, while helping you possibly increase your account balance to more than you had initially anticipated. Amongst the most favorable options you can consider is the Exchange Traded Fund (ETF).
All You Need to Know About ETFs.
To grow your retirement account, an exchange traded fund is a good option. It works as an investment fund which is used for trading on stock exchanges. It goes beyond typical stocks and bonds, as it also includes commodities and other assets, and it is able to track an index. This type of fund also has the advantage of being lower in risk by having a vast array of items in its portfolio, so the investor is not vulnerable to extreme market forces. This diversification can also be spread over a range of sectors within the economy, which allows for an element of balance.
The first surviving ETF was founded in 1993, and within a decade, in 2005, there were 204 ETFs that were operational. Move forward six years to 2018, and there were in excess of 1,100 ETFs, managing more than one trillion US dollars. The progression of ETFs is illustrated in Figure 2.
Figure 2: Growth of ETFs over eighteen years.
Money managers have taken to using ETFs since they are so simple to understand, and give excellent returns. They have even been nicknamed “hands-off” investments, since the money manager is saved from having to track them continuously in order to get a good return. Consider the direction you take when investing in stocks. You would be constantly trying to beat the market. This creates more situations where you could take a considerable loss. Instead, you should aim to perform with the market, which reduces your friction and vulnerability. The result is that over time, you will begin to make excellent gains.
When making a decision on what to trade, it is likely that you will consider mutual funds with the belief that they are the same as ETFs. There are some distinct differences, and understanding them will clarify why ETFs are the more attractive option. Mutual funds and ETFs both hold a portfolio of stocks, bonds and commodities. Both have rules which affect the balance of assets that they can have. However, when you make an investment in a mutual fund, it is owned by the mutual fund management company. The prices of the assets are based on what price the market will close with on a given day. Trade orders which are placed at the end of the day are valued at the closing price of the next day.
Should you make the decision to sell your shares in a mutual fund before the typical 90-day deadline, you will be charged a penalty. However, when you are dealing with ETFs, you are able to sell them short, which enables you to capitalize on your investment, particularly when you notice that it may be losing value.
With ETFs, rather than trading on common stocks through a management company, you deal directly with another investor and you trade on the exchanges. You are not restricted to purchasing your stocks at a certain time during the day. Instead, you can transact at any time that you wish. This enables the investor to take advantage of international trade opportunities as well as new markets. In addition, ETFs are considerably more flexible than mutual funds as it is possible to purchase them on margin, hold them long term, or sell them short, much in the same way as you would with common stock.
Cutting out the middleman and trading directly with other investors means that ETFs are more efficient than mutual funds. The processes are reduced, and therefore trades can happen faster. It is even possible to carry out all the trades using a computer, which lessens trading issues and costs considerably.
Why ETFs Are Excellent for IRAs.
Stock trading is associated with incredible risk, and with good reason. During periods of financial crisis, even the most astute investors have made incredible losses, and struggled to bring themselves back up financially. When you are looking at growing your retirement fund, the last thing that you want to do is risk it all in the hope that you get a return. What happens if your investment fails? That’s something to think about.
Furthermore, when trading in stocks, there are a range of fees that you have to pay, including charges for every trade that is conducted. This is also true for mutual funds. With ETFs, the fees are much lower, which means that they will eat less into the existing funds or the gains in your retirement account. Consider the simple comparison in Figure 3.
Figure 3: Comparing Unit Trust Costs and ETFs Costs.
NB: Unit Trust is the British Term for a Mutual Fund.
Then there is the benefit of lower taxes. The reason is due to minimal internal trading within an ETF. This results in fewer taxable events, and coupled with trading using an IRA which is tax-favored, it is even possible to have taxable gains. If you want to avoid taxes completely, all you need to do is hold on to your shares for as long as possible as you will only have to deal with tax once you sell them. This means that you can control your capital gains tax. Other types of investment, such as mutual funds, will lead to capital gains tax as long as there is a profit, whether or not a sale has been executed.
If you are hands-on with your money and your IRA, you do not need to have extensive knowledge in financial management and trading to make a decision that will yield you a good return. With simple knowledge of the money markets, and some common sense, you can make decisions that will turn out to be highly profitable.
Two different types of ETFs are ideal for trading your retirement account. The first type, “put ETFs,” have excellent growth potential and they do not need you to make payments on income taxes for the amount that you earn, or the existing principal within the account. It is assumed that the money which you have placed in the account and are using for investment purposes has already been taxed.
There are also “buying ETFs,” which are an excellent option if you have considerable time before your retirement. Ideally, these will fund your retirement and are highly time dependent—meaning they should be long term in nature. The time that you have between when you start investing and when you will retire will determine whether your portfolio will be made up of primarily stock ETFs or bond ETFs. Keeping this in mind, you can select an ETF from one of the following markets illustrated in Figure 4.
Figure 4: Different ETF markets.
There are a range of ETFs available for you to choose from. These include simple ETFs, single commodities, niche ETFs, complex investing instruments, and so on. They also have various attributes, including being commission free, having low expense ratio and the potential to outperform the best indices. The key to making an excellent choice is to identify an ETF that is well diversified. This means that it should reflect a major index such as the S&P 500. If it is an ETF that is focused on just one sector, then it means that you are only covered financially within that sector. Should the sector be highly volatile, such as stocks, then you will have increased your risk.
There are also ETFs that are focused on small sectors, and those that take into consideration the entire stock market. You want to focus on the ETFs that are trading in the entire stock market over a period of time, as these are likely to give you the best returns. As long as you have made the decision of an ETF that covers the entire market, there will be no need to split hairs over the happenings in a specific sector.
When selecting your preferred ETF, ensure that you know what the investment goal of the ETF is. Even though they are typically an excellent choice for trading in your retirement, they have different goals and you want to capitalize on an ETF that will give you the return you desire to boost your IRA.
You should also ensure that your select ETF is liquid. A good benchmark is a common threshold of no less than US $10 million. Anything below this is an indicator that the ETF is up and coming, and therefore, there is every chance that you may face issues getting access to your funds as and when you need them. In retirement, when your sources of funds are limited, this could spell disaster.
If you start to trade your retirement account early, then you will be spoiled for choice when it comes to selecting your preferred ETF. Excellent options to consider are real estate and commodities, which are relatively stable and increase in value for the most part. Remember that when you make your choice, you should base it on solid research. Do not be tempted to give in to your emotions or gut feelings when it comes to your investment decision. Also, avoid taking on an investment because public opinion considers it to be viable. Find out everything that you can about that investment, and then you are able to make an informed decision.
Step-by-Step Guide to Trading your Retirement Account.
The best place to start is by identifying an investment management company that has ETFs. There are several that are leading in the market. The ones that have ETFs that are geared towards retirement accounts include Vanguard, SPDR and iShares. Their ETFs cover several markets including indices, bonds, stocks (US), international stocks and so on. For this step-by-step guide, Vanguard shall be used as an example. Once you have identified your preferred company, open a brokerage account with them.
Review the existing options on the site and select an IRA brokerage account. This will ensure that you are properly set up to begin trading. Once this is done, you should select a settlement fund. For IRA accounts, you do not need to look for an account that is exempt from taxes, as this will automatically occur by virtue of being an IRA account.
Browse through the available ETFs on the investment management company’s website. There should be more than 50 for you to choose from. As you browse through, remember to keep in mind your overall goal, the risk that you are comfortable with and the duration that you shall be trading with the account. You should keep in mind that choosing a minimum of two ETFs would be good for a varied portfolio, though increased diversification from three to four ETFs is even better in the long run. Your primary criteria will be the asset class, then you can narrow down your choice even further based on your final goal. You will be able to compare information as in Figure 5.
Figure 5: Vanguard ETF List.
In your portfolio, you may choose to select the Vanguard Total Stock Market ETF. This will give you the option of investing in the entire US stock market index, where you will find a good balance of viable stocks. This is especially ideal for any investor who has limited experience in trading and wants to be saved from a range of expenses. Furthermore, if you have considerable time before you need to use your retirement account, having this within your portfolio will lead to a higher return.
The Vanguard Total Bond Market is a good second option as you diversify from just the stock market to also include bonds. If you have only started considering trading your retirement account when you are close to retirement, then this would be the safest option to include within your portfolio. The expenses and fees are considerably lower and minimal effort is required to maintain trading.
The Vanguard Europe Pacific ETF is a good third option for your ETF portfolio. In addition to featuring several ETF stocks, one can benefit from its international stocks from emerging markets.
Figure 6 is an example of what a balanced ETF account looks like.
Figure 6: Balanced ETF Portfolio example.
Having a mix of stocks and bonds will help you create an excellent portfolio. This is because the stocks will drive your portfolio towards greater returns and growth, whereas bonds, though less profitable, offer an excellent amount of security. As explained, the security becomes more important the closer you get to your actual retirement.
The Benefits of Trading your Retirement Account.
With more individuals looking to trade with their retirement accounts, an increase in unscrupulous vendors has become the order of the day. Therefore, careful research is required before settling for just anyone who wants to trade your retirement account. The reason is that often, these vendors are looking for ways to generate higher commissions by active trading. ETFs help to slow these people down, because the way that the trades are executed limits the role that these middlemen play.
Another advantage of ETFs is the appeal that they have for all types of investors. With hundreds to choose from, you will find an investment that you are comfortable with for growing your retirement account. This includes investments that have high risks and high returns, as well as those that are stable and will grow your account consistently over time. Due to the nature of diversification in the account, there is no need to worry about putting all your eggs in one basket.
Maintaining your retirement account when trading is relatively easy because, for the most part, you do not need to carry out constant trades. Once or twice a year, you should take the time to review your asset classes so that you can determine which ones are doing well, and which are not doing well. Then, make the decision on what you must buy and sell so that the account is able to rebalance well, while keeping you close to your goal. Doing this review will also help you to identify whether there are any increases in the fees or expenses that you are charged.
There are nominal fees that you pay to a broker when you chose to trade through ETFs on your retirement account. However, these fees remains flat, no matter how many shares you are buying and selling. This means that when you choose to trade more shares in an ETF, the fees that you pay become less important as they make up a much smaller percentage of the overall trade.
With all this information at your fingertips, there is only one thing left for you to do, and that is to utilize ETFs while trading your retirement account.
CLICK HERE to reserve your spot in Kirt’s webinar and learn his flawless system that will get you the results you are looking for.
Kirt Christensen is an internet entrepreneur and stock market investor who started his first company in 1996, at the age of 23. Since then, he's generated over $29 million in online sales, and placed thousands of trades in ETFs, stocks, futures and options. In the past few years, he's spent over $95,000 to perfect his own stock market systems, after ditching "main-stream" advice and methods. His goal and passion is developing trading rules and systems that the retail investor can use to profit five to 10% a month, in less than an hour a week.
Intro To Forex With A Simple 123 Strategy.
By Jody Samuels, FXTradersEdge.
Welcome to this mini Forex Foundation course, your roadmap to trading the Forex Markets. My name is Jody Samuels and my trading career began on Wall Street in the early 80’s. Today, I run fxtradersedge, a comprehensive program that offers courses and numerous coaching and trading services.
TradingPub asked me to explain what makes Forex a great market to trade so I thought I would start with some basic terminology and history, to show you how the market has evolved as one of the fastest growing markets to trade. I will then switch gears completely and talk about a strategy which is very easy for a new Forex trader to grasp. (It is even good for advanced traders!) The strategy is called the 123 continuation and reversal pattern and we will show how to use it during trend and end of trend cycles.
Foreign Exchange Trading is known as Forex, or by the acronym FX.
Today we are going to talk about the transactions of the foreign exchange market known as the spot market. This market involves a worldwide electronic network of banks, brokers and other financial intermediaries.
Unlike the stock exchange markets, Forex has no physical location – it’s completely electronic. This ensures that transactions happen in seconds directly with the market makers. All profits are settled immediately in cash.
Figure 1: The Forex Spot Market.
The Lingo in Forex is about pips and lots. O que é um pip? If we look at the EURUSD at 1.1355, the pip is the last decimal place. When we talk about a move in the EURUSD of 5 pips, we are referring to a move from 1.1355 to 1.1360. The pip is 1/10,000 of a decimal place. A 100 pip move is from 1.1300 to 1.1400. If we look at the USDJPY at 117.30, the pip is also the last decimal place. If the USDJPY moves 1 pip in the market, it moves from 117.30 to 117.31. The pip is 1/100 of a decimal place. Nowadays, brokers quote to 5 decimal places in the EURUSD and to 3 decimal places in the USDJPY. For example, the EURUSD would be quoted as 1.13556 and the USDJPY would be quoted as 117.308.
Currencies used to only be traded in specific Lot or Unit sizes. If the unit is USD, a standard lot is $100,000. A Mini lot is $10,000. And a Micro lot is $1,000. Today, brokers allow traders to vary the Unit size without sticking to the standard Lot sizes. If you are wondering how a small investor can trade $100,000 without depositing that amount of money, it’s because of Leverage. The broker where you set up your trading account will require a margin to trade $100,000. That margin will vary according to the leverage the broker is willing to offer. At 50:1 leverage, the amount required to trade $100,000 is $2,000. The broker “lends” you the rest. Of course, any losses or gains on the position will be added to or deducted from the balance in the account.
The Forex market has evolved faster than any other financial market in history. According to the Bank for International Settlements, the central bank for central banks, average daily turnover on the world's foreign exchange markets reached almost $1.5 trillion in 1998, increased to $1.9 trillion of daily trading in 2004, and skyrocketed to an unprecedented level of almost $5.3 trillion in 2018.
However, foreign exchange transactions existed a long time before that. Let’s learn a little history together.
Between 1876 and 1931 currencies gained a new phase of stability because they were supported by the price of gold. The Gold Standard replaced the age-old practice in which kings and rulers arbitrarily devalued money and triggered inflation. The Gold Standard was a commitment by participating countries to fix the prices of their domestic currencies in terms of a specified amount of gold. The Gold Standard prevailed until WWI, was reinstated in 1925, and broke down again in 1931 following Britain’s departure in the face of massive gold and capital outflows.
Beginning in 1944, countries operated under the Bretton Woods Accord. A total of 44 countries met in New Hampshire to design a new economic order. The Bretton Woods Conference of 1944 established an international fixed exchange rate regime in which currencies were pegged to the United States dollar, which was based on the gold standard at a fixed value of $35 per ounce.
However, heavy American spending on the Vietnam War led to persistent U. S. balance-of-payments deficits and steadily reduced gold reserves. Finally, on August 15, 1971, President Nixon announced the suspension of converting dollars into gold, unilaterally devaluing the U. S. dollar and effectively ending the Bretton Woods Accord.
After the Bretton Woods Accord, the Smithsonian Agreement was signed in December of 1971. This agreement was similar to the Bretton Woods Accord, but it allowed for a greater fluctuation for foreign currencies. The US trade deficit continued to grow, however, and the US dollar needed to be devalued beyond the parameters established by the Smithsonian Agreement, and this resulted in its collapse in 1973.
In 1978, the free-floating system was officially mandated. This had occurred by default because no new agreements surfaced. At the same time, Europe gained independence from the dollar by creating the European Monetary System. This lasted until the introduction of the Euro in 1993.
Finally, the first online trade happened in 1997, which marked the beginning of the retail market.
An acronym I developed is the Be RICHeR network and this network trades Forex.
Figure 2: Who Trades Forex?
The Banks were involved in the Forex markets at its inception in the 1970’s.
The Retail Forex Brokers came on the scene after 1997.
Investment Management Firms have foreign exposures from their stock and bond portfolios and they transact with the banks.
Corporations in their daily, monthly and yearly foreign exchange transactions deal with the banks. The Central Banks are also key players managing their currency exposures and dealing with investment banks.
Hedge funds manage a variety of asset classes, including currencies, and they transact with Banks.
Finally, we have eRetail, dealing electronically through a trading platforms of retail Forex Brokers.
When you take your first currency trade, you too will become part of this Be RICHeR Network! Bem vinda.
Tradable Markets on a Forex Platform.
In the Forex market, there are a great number of currency pairs to trade, which include the USD pairs and the Crosses. On the majority of Forex trading platforms, one can trade CFD’s as well as currencies. A CFD, or contract for difference, is a product whose price is based on the underlying instrument and is considered an over-the-counter (OTC) product, which is not traded on any exchange. CFD’s include stock indices, metals and energy products. For most brokers, the lists of offered instruments continues to grow. Now, Forex trading platforms are beginning to add CFD’s on stocks and ETFs as well. As retail traders, we have the ability to trade all of these instruments on Forex trading platforms. The number of markets quoted will vary from broker to broker.
Once we understand which markets can be traded on the trading platform, how do we decide which markets are trending? One way to do that, is to look at several markets at once to compare them. In this example we are looking at the major USD pairs to see if there is a particular trend in these pairs. Then we can do the analysis and decide which pairs to trade and when. Scanning charts like this is done to capture the “Flavor of the Day or Week” in order to stay with the trend. In the example below, the USD pairs that have the cleanest price action include the commodity currencies, the USDCAD, NZDUSD and AUDUSD. The three other pairs – the EURUSD, USDJPY and the GBPUSD - illustrate choppy, sideways markets which are not high probability charts for the upcoming trading session.
In addition to scanning the charts for clean price action, it is necessary to review the news releases to be prepared for events which could move the markets. An understanding of the fundamentals is key to relating the price action to the economic backdrop affecting the markets.
Figure 3: Scanning the USD Pairs for Opportunities.
The 123 Pattern as a Reversal Trading Strategy.
Now we are going to move into the trading strategy section of this course. The simple trading strategy that I have selected is the 123 strategy for continuation trades and end of trend trades. First we are going to look at the 123 pattern as an end of trend, or reversal trading strategy, also called the 123 top and bottom pattern.
The 123 top and bottom pattern is a very powerful pattern that signals a trend reversal. It can also be used as a trend continuation, which will be described shortly. First, the reversal pattern.
Scenario 1: In an uptrend, the market hits a new high, labeled point 1. Price then pulls back to a short-term support level, labeled point 2. Finally, price moves up to an area between points 1 and 2, labeled point 3. It then reverses down again and begins a trend in the new direction.
Trade Entry: The pattern is complete when the price trades below point 2. At a 123 top, the strategy is to sell on a break of point 2. The measuring objective is the distance between point 2 and point 3, projected below the break at point 2. The stop loss is set just above point 3 but a more conservative stop loss is above the start of this move, at point 1. This is a choice that the trader must make and only by trading it over and over again will the trader feel comfortable with the choice of a stop loss.
An optional sell is at point 3, only if point 3 is at the 50% retracement level of the move from 1 to 2. Also watch for reversal candlestick patterns at point 3 to trigger the entry.
Figure 4: 123 Reversal Trade Entry.
Figure 5 summarizes the 123 top and bottom trade. We just looked at scenario 1 which is the 123 top. Now we will discuss the opposite scenario of a 123 bottom.
Scenario 2: At a 123 bottom, the market hits a low at point 1, trades up to point 2, trades back down to point 3, and back up through point 2 to begin a new uptrend.
I like to see point 3 retrace at least 50% of the move down from point 1 to point 2. I also learned that if the pattern has between 10 and 20 bars between points 1 and 3, it is more likely to succeed. What I have to say about that is back test and see for yourself. I take most of my trades based on this pattern alone. It is very powerful. You can also use this pattern on a smaller time frame once the market reversal is identified. You will get a closer entry to point 1 and will therefore be able to take a larger position, using the same money management rules.
Figure 5: 123 Top and Bottom.
The 123 formation is classified as a major reversal pattern and is one of the best indicators of a trend reversal. They are found on every time frame. The swing or position trader will look for these patterns on the weekly, daily and 4-hour charts. The day trader will look for 123’s on the hourly and 15-minute charts. The momentum trader will trade these patterns on the 5-minute, 1-minute and tick time frames. Stop losses for 123 tops should be set above point 1 initially, and positions need to be sized accordingly so as not to exceed the risk limit for the trade. Another option is to place stops above point 3. However, the odds are increased of being stopped out early. It is better to take a smaller position and leave the stop above point 1. Stop losses for 123 bottoms are set below point 1, or alternatively, below point 3. Optional: On a 123 reversal using any time frame, wait one or two candles for confirmation. Ideally price will come back and retest the breakout or breakdown point for a safer entry. This helps to avoid whipsaw.
At this point in the video we look at more 123 reversal examples using market data.
The 123 Pattern as a Trend Continuation Strategy.
We have just completed the section on the 123 reversal pattern as confirmation of the end of the trend. However, while the end of trend 123 top and bottom is a great entry method for taking reversal trades, most of your trades as swing and day traders will be trying to get into a trend move – getting into the trend in the middle of it. You may have heard that “the trend is your friend”, so now we will learn a method to get into a trend move using the 123 trend continuation pattern.
How do you get into the trend in the middle of it? The safest trades you can make are the ones where you are trading in the direction of the current trend. In other words, if the trend is up, you should be long – and if the trend is down, you should be short. If you miss the start of the trend, you still need a method to enter a confirmed trend during its progress. I am going to suggest two entry methods using the 123 pattern for trend continuation called internal 123’s.
Figure 6: 123 Trend Continuation Trade Entry.
Draw your 123 points as price moves in the direction of the new trend.
Enter on a break of the newly established point 2 with a stop above point 3.
Follow the market up or down, depending on the trend.
Draw your 123 points.
Enter at point 3 (once price turns down) with a stop above the new point 1.
Figure 7 illustrates both the 123 reversal and the 123 continuation, back to back, on the same market, the 4-hour USD/CAD.
Figure 7: 123 Trend Continuation Trade Entry with 123 Reversal.
When the “Trend is your friend”, we need to make sure we get into the trend at various points along the way. Por quê? The safest trades are taken in the direction of the current trend. Trade entry is easily done with the internal 123 formation. In a trend, the first 123 pattern is the reversal pattern that occurs at market tops and bottoms. The second and third sets of internal 123’s continue to confirm the uptrend or downtrend. Take note how each point 3 becomes the new point 1 for the next internal 123 pattern. In a very strong trend, point 3 will not always retrace to at least the 50% mark, and that’s ok. It is more important for that to occur with reversal 123’s. In a strong trend, the retracements can be as shallow as 23.6% or 38.2%. If you miss the initial reversal 123 pattern, look to get into the subsequent internal 123’s. Preferred entry is on the break of point 2. However, alternatively, you may enter at point 3. And, wait for the candles to start trending again before entering. Profit taking is recommended along the way for day traders. Position and swing traders may hold the positions and trail the stop every time we trigger a new trade. The stop would then be placed above the new point 1, and previous stops would be moved to the new point 1. These positions would be considered “add-ons” for position and swing traders.
At this point in the video we look at additional 123 continuation examples using market data.
The Forex markets offer an opportunity to trade various currency pairs and CFD’s as well. Once a trader understands that all of the markets are related in some way – currencies, commodities and stocks – and that correlations exist between certain markets, the excitement comes in understanding these relationships in order to confirm market moves day in and day out. Learn the fundamentals, scan the markets for the best markets to trade, and select a simple strategy such as the 123 Strategy to stay with the trend, or find the end of the trend for a market reversal.
Get Jody’s special offer of her Back to Basics Seminar with 1 Month of her Premiere Market Analysis!
Jody Samuels is one of North America’s leading coaches for successful traders, and the creator of The FX Trader’s EDGE™ Program. She works with members of her program in group and private coaching sessions and is passionate about teaching individuals how to trade the market cycles and use entrepreneurial skills and habits to effectively manage their businesses.
Jody Samuels, a professional trader with 15 years’ experience trading currencies with a New York international investment bank, successfully made millions of dollars using the proven theories of Elliott Wave analysis. The Elliott Wave Ultimate Course, Jody’s latest accomplishment, illustrates the convergence of Elliott, Fibonacci and Harmonics in a ground breaking program to combine precise analysis with a simple strategy.
Options Trading and Market Profile / Auction Market.
By Tom Alexander, AlexanderTrading.
Options traders are keenly aware of, and sensitive to, TIME. There is no methodology that highlights the aspect of time in how a market develops than Auction Market Principles, and no charting format that better highlights the present Market Condition of the state of Market Development than Market Profile.
The worldview of Auction Market Principles and the charting format of Market Profile can be powerful tools in the option trader’s decision making process. Below is a very brief description of Auction Market Principles and the Market Profile graph.
The Auction Market Process and Underlying Principles.
The Market Profile™ graphic IS NOT what one is trading. Market Profile™ is a graphical depiction of a specific type of activity: the organizational activity of a freely traded auction market. It is a concept based on Value as determined by the buyer and seller through a free market medium – an auction process. A profile graphic organizes trading activity on a chart in a format that is the best available visual depiction of the process of an auction market in progress. What is being traded is the Market Development (macro activity) and Market Structure (micro activity) that is formed in an auction market process. The profile graphic is a charting format that enables the trader to read this activity and make informed consistent decisions about what is happening at a given price level and why.
Key Reference Areas are formed as a result of the trading that occurs within the profile graphic. These Key Reference Areas are inflection points created by the activity of market participants that carry specific meaning and therefore can be read, interpreted and used to make trade decisions. It is critically important to understand certain basic precepts about an auction market and how the activity of an auction market is displayed through the profile graphic in order to derive practical, actionable information at the trade execution level.
Market Profile™ IS NOT a trading system. It provides a platform of tremendous depth and breadth around which a rules based trade plan can be developed. An example of a specific rule based trading system is outlined in detail in Don Jones’ book, Value Based Power Trading .
The purpose of a market is to facilitate trade. In an auction market for objects of fungible value, as with a stock or a stock index, or a financial futures or commodity contract Value as defined by the actions of buyers and sellers can be closely determined. Value resides in a range that is determined by the buyers and sellers. Within this range there are areas of more or less value.
The greater activity or volume the greater the value, and near areas of less value to either the buyer or seller there is less activity or volume. In this value determining process the market will drive prices higher until there are fewer and fewer buyers to the point at which there are no buyers.
The same process will see the market driving prices lower until there are fewer and fewer sellers until the point there are no sellers. These two opposite actions are necessary parts of the auction process of probing and discovery in a search for value and to confirm value. The driving of price higher until there are no more buyers and lower until there are no more sellers establishes the range of the auction in progress.
The very highest prices represent the area that is least fair to the buyers and the very lowest prices represent the area that is least fair to the seller. Because the purpose of the market is to facilitate trade and because the market is constantly in a probing mode searching for and confirming value, price usually moves sharply away from either extreme of the unfair high price level of the unfair low price in search of the fairest value.
It is logical that most of the trading will occur at what are the relative fairest prices to both the buyer and seller. In other words, the most activity, or volume, will occur where there is the greatest consensus of Value and the least volume will occur where there is the most unfair level of pricing to either the buyer (the highest prices) or the seller (the lowest prices). It is important to note that the area of concentrated activity within a profile unit is created by a rotational process; buyers and sellers do not just “sit” in one small area and trade back and forth. The testing and probing for Value is a rotational process during which the market will trade back and forth from one extreme of a range to the other and in the process creating an area usually near the mean of the range where the area of most activity lies.
Market Profile™ Graphic Basics.
The traditional Market Profile™ graphic uses letters to depict the vertical range of each specific thirty-minute time period in a trading unit (the day session of the stock index futures, for instance). The trading session of a given asset is divided into thirty-minute time periods with each time period being assigned a letter.
The initial instance during the trading session within a designated thirty-minute time period the market trades at a price a letter designated for that thirty-minute period is placed on the chart. Only one letter per time period will print regardless of how many instances price trades at that level within the thirty-minute period.
When the thirty-minute period completes the next time period begins as the chart shifts one column to the right and the letter designation changes. Another way of stating this is that each letter is basically a thirty-minute bar, but instead of a straight line the bar is a vertical line of a single letter representing a designated time period.
The letters used to designate the trading activity are referred to as TPOs, which stands for Time Price Opportunity (per Steidlmayer), or That Price Occurred (per Jones). A TPO signifies that a market traded at least once at a specific price within that designated time period.
A profile’s rotations, or designated time periods can be any length of time. We quite often look at daily profiles where each letter will represent one day’s trading. Because Market Development and Market Structure occur in all degrees of time all the time, the same objective analysis can be applied in the timeframe most useful to the individual trader.
A very important point is that regardless of the timeframe one chooses to trade, all the way down to the very short-term day trader, because the processes of Market Development and Market Structure are occurring across all timeframes all the time, the context of the present phase of development within the larger phases of development can provide a huge edge, and is one of the primary benefits of using this methodology as a model to develop a trading plan.
Two other components of the traditional Market Profile™ chart are the Initial Balance period and the Value Area. The Initial Balance Period is the range of the first two half-hour periods of the trading day or session for that particular contract. The Initial Balance Period was extremely important in the early days of Market Profile™. It was used to help define potential range as well as help identify when the institutions or other big money participants (often referred to as “other timeframe players”) were initiating positions.
The theory was that most of the range in the first hour of trading was determined by the floor traders. If the floor was in control of the market the range would be relatively narrow and there would not be much extension outside of the first hour range. Because floor traders had negligible transaction costs and could make money while price stayed in a relatively narrow controlled range, there was no incentive for range extension as long as the floor traders were in control of the marketplace.
If the range suddenly extended outside the range of the first hour it was most often because the off floor traders of institutions were imitating positions and their size would push the market directionally outside the range of the first hour of trading, or Initial Balance Period . The amount of buying or selling the off floor trader conducted during the day would determine the form of one of several typical Market Profile™ day-type patterns. This will be discussed in greater detail a bit later.
It is important to note that in Market Profile™ literature through the mid 1990’s the Market Profile™ concept emphasized each day as a discreet event, but one that had predictive value regarding near term market direction based on an interpretation of the particular day type that was formed.
The other component found on a traditional Market Profile™ chart is a vertical line denoting the Value Area. The Value Area represents the area that contains 70% of the trade activity of a given profile unit. This can be a measurement of TPO activity, or volume. The overwhelming majority of the time a Value Area calculation is extremely similar regardless of whether volume or TPOs are used to calculate the Value Area.
Below are several days of trading displayed in the Market Profile™ format.
One of the obvious differences between a Market Profile™ chart and a bar chart is the information that is available on the horizontal scale of the chart. It is easier to see the amount of activity that occurred at a given price or area of prices on a Market Profile™ chart than a bar chart. As we will explain in detail later, this is a critical and defining difference.
Trading Market Development and Market Structure.
Market Development and Market Structure has as its basis Don Jones’ Auction Market Value Theory©. The gist of Auction Market Value Theory© is that all free markets exist for the purpose of facilitating trade and that market participants - buyer and sellers, identify value, or lack thereof, by their actions. An auction is a price discovery process between buyers and sellers. Bids and offers are made between buyers and sellers until they reach an agreement on price. Prices that are too low will not have many sellers (offers) and prices that are two high will not have many buyers (bids). If prices are too low or high they are generally “unfair” to the buyer or seller and will not do a good job of facilitating trade. Price will gravitate to the area in which there is the greatest agreement on price. A profile graphic displays this process of Market Development. The area of greatest value is that area where trade most easily occurs between buyers and sellers. This is usually where the greatest volume will be and where a market spends the most time trading. Where and how much buyers and sellers conduct their business describes the present state of Market Development and is the determinate of what Value is in a given timeframe.
The primary tenet of Market Development is one of Value; markets constantly rotate between two cycles, or phases of development, either Horizontal Development (Balance) or Vertical Development (Imbalance). A market in Horizontal Development is one in which there is general agreement among buyers and sellers as to what is fair Value. A market in Vertical Development is a market in search of Value. A profile graphic visually displays both forms of development. Everything about Market Development is quite logical. The various threads that weave together to form the larger concept of Market Development are logical, consistent and simply “make sense”.
Markets are in constant development between Balance and Imbalance. Balance occurs when market participants generally agree on value. Imbalance occurs when there is disagreement and the market is trending in search of value. The conviction of one side of the market (either the buyer or seller) overwhelms the other during Vertical Development. Balance is reflected visually in a profile graphic as consolidation and Imbalance is reflected visually as trend. Balanced markets are efficient markets, and Imbalanced markets are inefficient markets. “Efficient” and “inefficient” is being used in the context of how effectively trade is being facilitated. All consolidations (Horizontal Development/Balance) eventually end when there is no longer an agreement on what is “fair” Value between the buyers and the sellers. All trends (Vertical Development/Imbalance) end when price reaches a level at which there is a relatively balanced agreement between buyer and seller as to what constitutes a “fair” preço. The above is true across all time frames.
Balance (Horizontal Development)
Below are year profiles of the S&P cash (each letter represents a weekly range).
Imbalance (Vertical Development)
Below is a profile displaying the Vertical Development of the S&P cash during January, 2018 (each letter represents one day’s range).
Steidlmayer in Steidlmayer on Markets, Trading with Market Profile™ ….. describes the Balance to Imbalance cycle as taking four steps:
This market-generated continuum can be clearly explained using what is called the four Steps of Market Activity. It is the process markets go through to factor out inefficiencies. Inefficiencies are defined as the directional move, money flow, or distribution that propels prices sharply higher or lower within a defined amount of time . This viewpoint can be from a micro or a macro perspective. In other words, one can monitor a 5-minute, 30-minute, daily, or any duration in between and visualize this phenomenon. It is one of the most important, if not the most important, skill a trader must learn and apply to be successful. The four steps are:
Series of prices in one direction Trade to a price to stop the market Develop around that stopping price Move to efficiency (retracement)
The above description of how markets transition from Balance to Imbalance is a key to understanding the link between early the early profile literature of Steidlmayer and the evolution of the concept represented by Don Jones’ trabalhos. Steidlmayer’s newer work is very much in line with the conclusions of Don Jones’ research that began in the late 1980’s and that continues to this day.
Markets very closely follow the above Four Step process with one important exception: The process is most often a three-step process without the deep retracement and “filling in” of the entire vertical range established in Step 1. For practical trading purposes it makes little difference because a completed Step 3 is simple a mini Balance Area (an auction of small degree) from where the market will transition into a Vertical Trend and the process will begin again.
It is important to understand the Four Step Process and some of the surrounding trade concepts that were subsequently derived from it.
Steidlmayer’s Four Step process is his description of the life of an auction from beginning to end. This is a process (auction process) that is occurring all the time in all degrees of time, so we see auctions within larger auctions.
Step One establishes the vertical range of the auction. Step Two is when the market begins to become two-sided - buying and selling begin to even out. Step Three establishes a smaller range of trading within the larger high and low extremes established in Step One. Step Four is a probing and further “development” of the entire range established in Step One. Step Four typically involves the forming of “mini” auctions, or small consolidations that subsequently breakout but stay within the extremes established in Step One. Step Four involves the “maturation” of the larger auction and leads to the inevitable transition to Step One and the process begins again. Implicit in this description is that most of the volume in the vertical range will eventually be established near the midpoint of the range and will have the look of the bell shape of a statistical distribution. The highs and lows will eventually form the 1st and 3rd standard distributions and the mid-point the 2nd standard distribution.
Step 1 is a vertical trend that is dominated by what Steidlmayer labels as “Minus Development”. Minus Development is an area in which strong conviction on the part of either buyer or seller overwhelms the other side of the market. It is called “Minus Development” because it is a range that has not yet been probed by the market in two-sided trading – it lacks development. The underlying assumption is that such an unexplored range will eventually be “developed” and trade will occur throughout the vertical range established in Step 1, though the amount of trade at a given point within the range will vary.
Steidlmayer further describes Step 2 and Step 3 as forming the look of either a “P” or a “b”. Price establishes a range extreme in Step 2, then in Step 3 price begins to develop (a two-sided market begins) and establishes a trading range near one of the larger range extremes. This process forms the look of a “P” if Step 1 was a vertical move to the upside. It forms a “b” if Step 1 was a vertical move to the downside. Steidlmayer incorporates the statistical distribution concept into this process by labeling the forming of a P a 3:2:1 and a b a 1:2:3. The “1” and the “3” represent the third standard deviations and the “2” the mean. Step Four involves the market developing the bell shape and thus is labeled a 3:1:3 where there are the more typical tails (3rd standard deviations) of a statistical distribution with the most occurrence of activity near the mean or 1st standard deviation.
The underlying assumption from the above is that the market is imbalanced in Steps 1-3 and will come back into balance in Step 4. In today’s markets Step 4 is often truncated or skipped altogether. This is a very important concept that addresses the ever evolving nature of markets. The market is a dynamic organism. As a result, a dogmatic approach with any methodology is doomed to fail. The beauty of understanding Market Development and Structure is that it allows one who is open to seeing what is happening in the evolutionary process of the markets to adapt and prosper. This is because the underlying basics and concepts of Market Development and Structure have not changed. They have simply sped up. This may seem to be a minor change, but it is being missed by most traders, and that includes professionals.
In summary to this point: Balance, Horizontal Development, Consolidation are synonymous terms and represent one phase of market development. Markets spend the vast majority of their time in this phase. This is perfectly logical and consistent with the underlying principles of an auction market we discussed earlier. The purpose of a market is to facilitate trade – to allow buyers and sellers to efficiently conduct their business. Most business will be conducted at the fairest prices as agreed upon by the buyer and seller and as verified by their actions. This “force” results in a range of fair prices in which an auction will develop and mature. This is what we refer to when we say we are trading Market Development. “Development” infers a time component – time is a requirement for anything to “develop”.
Imbalance, Vertical Development, and Trend are synonymous terms that represent the other phase of market development. This phase results in the majority of net price change. Markets spend the least amount of time in this phase.
These two phases are occurring all the time in all degrees of time.
An understanding of the immutable and consistent processes of how Auction Markets develop can greatly assist the options trader in determining the best strategy to employ depending on the present condition of the market. Just a basic understanding of Market Development can give the option trader a huge edge. This market worldview is based on time, which is the biggest piece of the puzzle for most options traders.
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Tom Alexander is the founding partner of Alexander Trading, which was founded in 2003 as a trading and research firm serving both institutional and retail investors and traders. Tom has 27 years of trading experience, and actively trades stocks, options futures and commodities. Within the trading industry Tom has been a stockbroker, commodities broker and owned a commodities and futures brokerage firm. He has been a CTA (Commodity Trading Advisor). He has also been involved with institutional trading and advising. He traded large private accounts for over ten years. He has been published in several well-known trading magazines, and is frequently quoted by Reuters, Dow Jones and Bloomberg. He is the author of Practical Trading applications of Market Profile Ö. He has traded through market crashes (1987, 2008), financial crises (1998), bull markets (1990’s), bear markets (early 2000’s) and wars (Gulf and Iraq).
He has learned the only constant in the markets is change, and he has been able to successfully adapt his trading methodology to a broad range of market conditions. Tom has spent his entire twenty-seven year career as a screen-based trader and is intimately familiar with all screen-based tools and techniques. As a trading mentor, Mr. Alexander has achieved extraordinary success helping traders with the transition from the floor to the screen, helping successful traders further along their goal of achieving their maximum potential. A common theme among his clients is that the methodology being taught, and how it is taught, dramatically lowers the typical stress levels a trader feels while increasing their profitability.
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