Humble

Profits come in bunches. The trick when going sideways between home runs is not to lose too much in between - Michael Covel I keep repeating this quote again and again, just look at latest Simple Spreads performance. Every drawdown in S&P 500 was followed by a monster rally (it is now up over 30% from its April lows in just 3 months). Every time SO was "underperforming" for a few months, was following by a monster year.

Yes, IV still reflects future expectations. But for many stocks, those future expectations have been very different from the previous cycles. Macro events like tariffs can add or remove uncertainty to the global markets. This is why VIX jumped to 30+ when Trump first announced the tariffs, and this is why it kept going down gradually when the markets realized that things are not as bad as initially thought. And now it's back to the mid teens after few major deals have been announced. But even when this macro uncertainty is removed (or significantly reduced), there is still specific event risk like earnings. In case of SOFI, all previous cycles priced at least 14-15% move. So why this cycle would price only 10% move, even with reduced macro risk? The earnings are still there. And btw, if you look at the morning of earnings, SOFI moved 17% at the open (it retreated later, but this is not the point). So the market was very wrong in pricing earnings so low. Also, when you enter a straddle during periods of high VIX and VIX goes down during the life of the straddle, it has a negative effect on the straddle price. This kind of "mispricing" happened a lot in the last few months, and this was the main challenge.

I always like to use the analogy of the whole stock market. The stock market indexes produce average return of 10-12%, but that included several drawdowns of 20-30%. Some of those drawdowns lasted months or even years. Nothing goes up in a straight line. So, if you joined the stock market based on a long time return of 10-12%, would you quit if you experienced a 30% drawdown? If the answer is yes, then the stock market is not for you. If the answer is no, then SO is no different. We all would like all our trades to be winners, but we know this is not possible. We know some of the trades will be losers. Many traders think that if a trade has lost money, it was a bad trade. They try to identify what errors they made that lead to losses. Why? "Because I lost money! So surely I have made a mistake somewhere?” Was it the right conclusion? Is any losing trade necessarily a bad trade? The answer is no. No matter how well he executed his trade, there will be losing trades because we are playing a probability game. Trading is a business based on probability. And probability means that sometimes we get what we want, sometimes we don't. And that's the nature of this business. The sooner we accept this, the better we can operate it as a business. To put things in perspective, our model portfolio was up 10% in the first half of 2025. We had few bad trades in July and those put us back few percentage points. While those returns are way lower than expected, they are not the end of the world. We will refine our strategies going forward and I encourage everyone to look at the big picture. It is important to note that consistency in trading is important rather than changing everything when you get an adverse movement. Adaptation rather than revolution over time is the right way to go. Have our strategies lost their edge? This question has been asked many times over the years, basically every time we have a period of dull returns, and the answer each time has been "no, they have not". I believe this time is no different. Profits come in bunches. The trick when going sideways between home runs is not to lose too much in between - Michael Covel Since inception we had 13 months that produced 20%+ returns, and over 30 months that produced 10-20% returns. To win you've got to stay in the game. Our strategies worked very well for us for over a decade, and we have full confidence that they will continue working in the future. Those who have the patience will be greatly rewarded, like in the last 13 years. Members who have been with us from the very beginning know it very well.

This is what we posted on SOFI discussion topic: SOFI is a good example why many of our trades have not been performing well this year. Take a look at the RV chart: 2024 SOFI trades 2023 SOFI trades Strangle (11.10%) 2022 SOFI trades You can see how low RV was this cycle compared to previous cycles. It was already very low when we entered, and it became even lower in the last 2 days. Remember: we are trading probabilities. Nothing is certain in the stock market, but playing probabilities works well in the long term. As you can see, we trade the odds based on prior cycle behaviors and our losing trades have been opened with good analysis. Nothing has changed with this - but the market dynamics has.

To provide a few examples to show how our strategies have zero correlation with the markets: Apr.2024: S&P 500 -4.2% SteadyOptions +4.6% Dec.2022: S&P 500 -5.9% SteadyOptions +2.9% Sep.2022: S&P 500 -9.3% SteadyOptions +1.7% Apr.2022: S&P 500 -8.8% SteadyOptions +4.8% Jan.2022: S&P 500 -5.3% SteadyOptions +5.7% Mar.2020: S&P 500 -12.4%, SteadyOptions +3.3% Feb.2020: S&P 500 -8.2%, SteadyOptions +26.6% Dec.2018: S&P 500 -9.2%, SteadyOptions +17.3% Feb.2018: S&P 500 -3.9%, SteadyOptions +3.7% Jan.2016: S&P 500 -5.0%, SteadyOptions +10.6% Aug.2015: S&P 500 -6.3%, SteadyOptions +11.7% Jan.2014: S&P 500 -3.6%, SteadyOptions +22.9% In 2022, S&P 500 was down 18.2% while SteadyOptions was up 90.5%. As one of our members mentioned in 2020 during the Covid market meltdown: "I would rate the 3% profit for March as even MORE successful than the 25% profits for Jan/Feb. If someone can make a profit in a month when there was total carnage in the markets, then that shows resilience and security in the trading strategies. It shows that even during a black swan event, the system works, and the account will not be blown." To provide some perspective, we already had periods of sideways returns and drawdowns in the past, followed by periods of outsized returns. Traders should think in terms of years and decades instead of weeks and months.

In the name of full transparency, I would like to address some issues regarding SteadyOptions recent performance. I will separate the analysis into several separate posts. Our performance in the recent months is not in line with our long term returns, as everyone can see on the performance page. The main reasons for the recent underperformance: We are struggling with a change in the fundamental behavior of volatility at the moment. Our trades rely on RV and therefore also IV and this has not been acting as expected. Periods of extended VIX decline have always been some of our worst performers. The main problem now is that we have been in a long period of VIX decline that’s been going for months - there have been a few spikes but in general VIX has gone from 30+ to the 20’s to the mid teens (and making things worse is many periods of minimal stock price movement during this timeframe). Our core trades do well when volatility is stable or rises. When volatility started to drop, it created some large percentage losers on a few trades that had an oversized negative impact on the portfolio performance. We had much less trades in 2025, which made the impact of those larger losses bigger. We had less trades because some options became very expensive, so it became difficult for many trades to fit into a $1K allocation, and for many stocks with moderate liquidity in normal times, now had less liquidity and very wide bid/ask spreads. This made them much more risky to use for options trades as slippage was a big concern. We used some directional trades, and the stocks did not follow historical patterns in those trades. When a directional trade goes against you, losses can grow very quickly. This is what happened with TTD, XYZ, KO, FL etc. Some of the non directional trades also experienced outsized losses. We will reduce the number of directional trades going forward. We used less calendars than usual because many of them were way too expensive compared to previous cycles. Now with VIX in the mid teens, we expect to trade more calendars, which is one of our best performing strategies. We are having extensive internal discussions on how to adapt to the current environment. Our strategies are designed to make money in any market. They are not guaranteed to make money, but our long term objectives are still in place. No strategy works all the time. There’s no room for ‘never’ or ‘always’ in the financial markets.

I guess it depends how you spend your screen time..

You might want to PM the tools creators to ask about any discounts or trials. I know that our members are using both tools, they should have a similar functionality.

This post is gold. I don't have monthly returns of SPY in a table form, but I assume they would look similar relative to historical returns. So someone who entered the stock market in January 2025 based on long term return of 10-12%, would be way below those returns now. If they quit now, they will most certainly miss very solid returns in the next 10-20 years.

If I had to select one thing that causes most traders to fail, it would be wrong expectations. I know I sound like a broken record, but consider this: when someone wants to become and engineer or an accountant, do they expect to achieve this in a few months? No, they fully expect spending at least 4 years and tends of thousands of dollars in University (not to mention becoming a doctor or a lawyer). And yet, many people read all the hype and expect becoming experts after a few months. When I just started SO, I got an email from one of my Seeking Alpha readers. He told me that he is a big fan of my articles and asked how he can learn more. He wanted to make it his new career. He asked me if I can recommend any books or internet sites to learn/practice the options strategies. Then he said that he is new to trading options, he set aside a small amount of money in hopes of doubling it at least yearly. Don't you find it amazing? The guy admits he is new to options, but wants to double the account "at least yearly". My reply was: "There is a lot of hype surrounding options trading. Some "gurus" out there will make you to believe that doubling your account every 6-12 months is an easy task. If it was, we all would be millionaires by now. My advice to you: if you just start options trading, preserving your capital during your first year of trading would be a great achievement" I didn't hear from him since then. He probably went to one of those charlatans who promise to double your account in one month and charge you few thousand dollars for a week of “one on one consulting”. Many people will tell you what you want to hear to get your hard earned money. Here is another email from one of our former members: "I'm new to options trading. I'm retired and am hoping to make $1.25 million per year by trading" This member cancelled after just 2 weeks. Why I'm not surprised? And honestly, I would be very interested to know the psychology behind people thinking they can have no experience with something, probably not even know how to place an order, and start making money with options right away. A 7 figure income in this case. But maybe it's the same psychology that makes people to believe that they can lose 50 pounds in 2 months without any effort..

And this is exactly the key - Why Simple Isn’t Easy

90% if success of failure in trading/investing is related to psychology, human emotions and discipline. Even investors who simply buy an index fund or a mutual fund will have very different results, depending on how they do it. Here are some articles that might help: Probability Vs. Certainty Trap Are You EMOTIONALLY Ready To Lose? Are You Ready For The Learning Curve? Why Retail Investors Lose Money In The Stock Market Why Simple Isn’t Easy Thinking In Terms Of Decades Can you double your account every six months? Is Timeframe Your Biggest Mistake? Are You Following "Tharp Think" Rules? Top 10 Mistakes New Option Traders Make Price Of Options Trading Education How To Become A More Profitable Trader 5 Stages Traders Go Through 10 Fatal Mistakes Traders Make Learning To Win By Learning To Lose How To Avoid Emotional Mistakes In Trading 10,000 Hours Of Trading Bitcoin: The Greater Fool Theory? Investor Discipline Is The Key To Success Buy High, Sell Low: Why Investors Fail How To Control Losses And Protect Profits 10 Tips: Trade Options Like A Pro And Keep Your Day Job

Yes, it is active. @cwelsh has to update the numbers.

I came across an excellent article explain Why Most Traders Lose Money. Key facts: 95% of all traders fail. 80% of all day traders quit within the first two years. 60% of all day traders quit within the first month. Trading is a profession and requires skills that need to be developed over the years. Yes, there is a steep learning curve in trading, like in any area in life. It takes 4-7 years to become an engineer, a lawyer or a doctor. Why people expect it to be different with trading? Can you become a doctor by following a skillful group of doctors? 'If you are not willing to learn, no one can help you. If you are determined to learn, no one can stop you.' - Zig Ziglar

No, I don't think IB ever negotiates commissions. Maybe with institutional customers.

The service has been restarted in July. Those are the returns since July, and I can assure you that they are 100% accurate. You can find the previous return under discontinued strategies, link on the performance page.

Thank you. I was a bit surprised by the question, as we always post all returns of all services on the performance page. SY is a completely different service now. Different managers, different risk management, different trading philosophy. Our goal is to keep the drawdowns to 20-25% maximum.

Yes, and remember that we usually don't use more than 50-60% of the capital. So when you look at performance, ROI is much higher than reported because we have almost half of the portfolio in cash.

Yes, $10k.

Yes, $10k.

Yes. Just subscribe from the subscription page and send me a quick note.

Yes always.

Member of the month award for August goes to @Chuck451 and @TraderSL for their continuous contribution of trading ideas and analysis.

Those are ongoing discussions on a topic that started 5 years ago. It's only natural to have many comments, but I believe the first post has all the necessary information to start. If you believe the first post can be improved to have a better description, just contact Chris, I'm sure he will be more than willing to help, as long as the questions don't fall into personal financial advice category.

From your welcome email: Please make sure to read the following topics: The Anchor Trades Strategy - the strategy general introduction. Leveraged Anchor - the current implementation How to Start a Leveraged Anchor - practical guidelines on how to implement the strategy.