Hello again and Happy Thanksgiving from the Bond family. |
 | Our Goldens love the dog show |
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I have an assignment for you while watching football. More on that below. |
This email is training #5. |
Advantage 1: The odds are always in your favor |
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Why, you ask? |
A three-year study came to three major conclusions: |
On average, three of every four options held to expiry, expire worthless; The puts and calls that expired worthless played off the primary trend of the underlying; Option sellers still come out ahead even if they go against the trend.
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In fact, of put options alone, 82.6% expired worthless. |
In some of the studies, up to 96% of puts or calls expire worthless if sold favoring the trend. |
This sounds like common sense, but a lot of traders bet against the trend. |
When it comes to selling options, the old adage most definitely holds true: The trend is your friend. |
Sell options with the trend and you boost your odds the options will expire worthless. |
Source: The Complete Guide To Options Selling 3rd Edition by Cordier and Gross |
Advantage 2: You don't have to pick market direction anymore |
The hard part of buying options is you must get the direction right and predict when the move will occur. |
Predicting where prices will go is like trying to predict the direction of a hurricane. |
Smart option sellers bet that the storm will not make a 180-degree turnaround into the wind. |
That's ALL! |
They don't play the game of guessing where the storm will hit. That's a low odds game. Guessing where it will not hit is much easier. |
Short-term trading (day trading) is too difficult. Markets can be sporadic over short-term periods. As a seller of options 1-2 weeks out, day to day market gyration does not concern me.
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Advantage 3: Accrued profits can be large |
Taking time to learn a strategy and allocating capital likely means you want a bigger payoff. |
Most traders don't know this strategy and that's fine, but option selling has the horsepower to deliver. |
On November 13 I started a fresh $2,000 balance. |
10-days later on Thanksgiving the balance has grown to $6,093 or 205%. |
 | Results not typical. Trading is hard. Nothing is guaranteed. |
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My best performance so far is $2,000 into $32,000 in about 4-months before a draw down, at which point I took profits. |
And subscribers' smartphones get every alert before I enter and exit. |
My goal is to get one of these $2,000 balances to $100,000. |
Advantage 4: Time is on your side |
As an option seller, the passage of time is your greatest ally. |
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As a seller of an option, you are like a football team that plays defense for an entire game. |
How much time is on the clock when you start the game is up to you. |
You give yourself a predetermined point lead and your opponent so much time to beat you. |
For example, give yourself a 50-point lead and give your opponent two quarters to beat you. |
Point is. The option buyer works against the market and time. Same as the offense, trailing, has to work against the defense and time left on the clock. |
Advantage 5: Taking profits becomes simple |
Most books on trading tell you not to be emotional about your trading. How can you not be emotional about your trading? This is your money that we're talking about! You're going to be emotional about it no matter what you tell yourself. |
As the seller, the decision of when to take profits generally becomes one that you no longer have to make. |
The market makes it for you. |
If the option is not in-the-money, the value will deteriorate to zero at expiry. |
I teach taking 30% early in the trade or 50% halfway through expiry. It's that easy. |
Advantage 6: Perfect timing is no longer necessary |
In a bull trend, sell far beneath the market, allowing for wide price fluctuations. |
For this I teach the 10-day EMA, inside bar breakouts, and Keltner Channels. |
Training #5 is how I use Keltner Channels in the $2,000 Small Account Journey. |
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Click here to watch training #5. |
Advantage 7: Many methods of risk control |
When entering a bull put, like this example on TSLA, I know exactly what I can make or lose. |
My risk on this TSLA bull put was $3,870 to try and make $2,130. |
I took home $1,248 overnight or 59%. |
This is an actual trade I alerted subscribers to recently. |
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My entry was $3.55 on a $10 wide spread which tells me my probability of profit was ~65%. That means the buyer had ~35% probability of profit. |
Stop loss strategy #1 is to get out if the stock breaks below the sold strike of $250. |
A more aggressive stop loss strategy, #2, is to exit on a break of the bought strike. |
As you eat turkey and watch football today I want you to ponder this. |
Ever wonder why there are so many insurance commercials on TV? |
It's because they are making billions of dollars a year by selling policies to people like you and me. |
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What a fantastic business! |
And if you have a billionaire uncle, I would suggest you start an insurance company. |
Next best thing? |
Learn how to sell options to other traders. |
Insurance companies make calculated odds against people making claims. |
Option sellers bet against buyers making profits. |
And in the $2,000 Small Account Journey that's my edge! |
We're 4 trainings into this email service and if you're ready to: |
Get ALL the education! Get ALL the daily watchlists! And get ALL the trade alerts, before I enter and exit, like a text, on your smartphone.
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Moreover, get 40% savings right now. |
CLICK HERE and APPLY Coupon Code: SAVE40 |
And START YOUR JOURNEY this week. |
Jay |
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Questions or concerns about our products? Email support@ragingbull.com |
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