Humble

Thanks @Vancouver Members like you is what makes our community the best options trading resource.

Yes, 100% loss is based on margin, not credit received. This is something that is worth clarification in the software otherwise it could be confusing.

Strange - when I check margin before entering calendars, they show 0 change in margin. Maybe rules are different in each country?

In ONE, you need to do the backtesting manually while in CMLviz it is much more automated. But ONE give you intraday prices in 5 minute intervals and has much longer history (around 7 years). Also, in ONE it is easier to see the prices. But of course CMLviz is much more advanced in terms of setting a strategy and seeing results in just few seconds.

@thanitpYou can say the same about ONE software and optionslam. But still the demand for SO service is so strong that I need to close it 3-4 times per year (will be closing again in few weeks). For every member who cancels we have 2-3 new subscribers. And most members who cancel come back after few months (or years). I believe that no software can replace live trading and discussions that we have on the forum. Most members still consider it very valuable, but of course it's up to members. The software is supposed to be a supplement to live trades and trade discussions that we have on the forum.

Yes, we receive a percent of sales and also get a say into development to make sure the strategies we discuss at Steady Options are covered. As our long time members know, I rarely recommend any product, and if I do, It's only ones that I'm using myself (like ONE and optionslam), regardless of compensation that I get or don't get.

You are right. But you still have an option to indicate different deltas, compare naked puts to put spreads, set different price target and stop losses etc. Question I got by email: I liked this video. Will I be able to back test our earnings and non-earnings SO strategies? Will this also help back test our new RUT strategy? I remember that you back tested this manually quite recently. Will you be using this software going forward yourself? Answer: Current, no. But Ophir mentioned to me that they are developing an option to do custom strategies where you can do virtually whatever you want - open x days before earnings, close y days before/after earnings, define custom strategies etc. And yes, I will be using the tool.

Before ever entering a trade, we need a plan. For example, we want to know whether we should avoid earnings, or trade with earnings. Knowing where to place a stop loss, and even a limit gain. Knowing which strike to trade. Knowing whether to trade the monthly or weekly options. But it even goes further – even if we know which direction we think the stock will go – do we sell puts or sell a put spread? Do we buy calls or a call spread? Should we be net owners or sellers of volatility? Has there been measurable edge in the trade in the past, or not? This is how people profit from the option market — it’s preparation, not luck. All of these questions were designed to be answered with the CMLviz Trade Machine, which is an option back-tester created by Capital Market Laboratories (CML). I have been in the same circle as this company’s founder for years. CML is in fact a member of the famed Thomson First Call roster. Their research sits side-by-side with Goldman Sachs, Morgan Stanley, Barclays and the rest of the bulge bracket banks, but they have a different goal: To break the information asymmetry that exists between the top 0.1% and the rest. To learn more about the product, you can tap on the link below. You will see a 4- minute video demonstration. I think, for many of you, it will become a valuable tool to supplement your trading and the analysis that Steady Options provides. Tap Here to Watch the Video and Sign Up P.S. Our members know that I rarely promote other products. But this one really got me excited. I encourage you to give it a try. They plan tons of additional functionality in the upcoming months, including custom strategies to trade around earnings which can be a great benefit for us. CMLviz Trade Machine is constantly adding new features, and the price will be increasing as new features are added. Those who sign up are grandfathered at the price they signed up even as the prices increase.

@BschulzIf you refer to spread prices - IB actually doesn't show the mid correctly. Look at my IB topic Trading and getting fills with Interactive Brokers. I have never had any issues with pricing. To take it offline, whenever you see mispricing, send me a message and I will look at it in real time. I'm very curios how this is possible as I never heard any complains about the pricing.

Thanks for sharing. I'm not sure why you say that IB pricing is inaccurate. I get data from IB and find it very accurate during market hours (maybe you referred to after hours - yes, real time data is inaccurate after hours, but you can always go to previous days). I cannot comment regarding entering orders via IB as I don't use it, but to me, it would definitely not be a deal breaker. As for historical data, TOS has only EOD data while ONE has 5 minutes intervals data. To me, this alone is more than worth the price. If you compare it to any competitor, only for the data you would probably pay double. Windows only is definitely disadvantage to some users, so if you use MAC only, it could be a deal breaker.

Selling naked puts is a good strategy, but you need to be aware of the risks. Only sell the number of contracts based on number of shares you are willing to own. If you do it, even if the stock tanks, you still will do better than owning the stock. As for calculating gains - yes, you are right. I had a discussion with someone who claimed to have 100%+ gains around 90% of the time. Turned out his "secret" strategy that makes "100%+ gains around 90% of the time" was selling naked puts. According to him, "100% gains is keeping the entire option premium that I received as the result of the option contract expiring worthless." However, there is a "small" problem: when you sell a naked put, there is margin requirement. And the only way to calculate gains is return on margin. Depending on the stock and the expiration, your return on margin is usually around 10-15% if your sell slightly OTM puts. Nowhere close to 100%+ gain. Yes, you can win 90% of the time if you sell far OTM puts with deltas of 10-15, but in this case your maximum gain is usually 3-5%. Unfortunately, internet is full of hype from people that will tell you what you want to hear. And this is what gives options a bad name. Edited February 27 by Kim

When you have such terrible risk reward, the trick is to limit the losses when you lose. This specific trade has maximum gain of ~11.7% (0.21/1.79). So you cannot afford to lose more than 25-30% in losing trades. As for calculating gains - yes, many services record 100% gain when they sell credit spread and it expires worthless. The correct way to calculate it is "return on margin" - which is 11.7% in this case.

Well, the disadvantage of naked puts is that if the stock rallies more than the premium you got for the puts, then you miss all those gains. But overall, you are right, buying naked puts is usually better than just buying the stock. The fact is that CBOE PUT index outperforms the S&P 500 with less volatility. Again, I believe it's mostly ignorance.

Very good question. I guess many investors just consider options too risky. Maybe they tried it at some point without full understanding what they were doing and were burned. But ignorance is not an excuse. Take Seeking Alpha as an example - they discontinued option category because "their site is for longer term investors"?? Don't they know how options can boost returns for all kinds of investors?

Yes it is.

First, it is important to understand that when you are short call that are ITM at the expiration date, you are GUARANTEED to be assigned. So I'm not what what the purpose of the trade and why it was structured this way. If you wanted to play volatility crash, the short leg should have been with this week expiration (after earnings). To close, it is best to build one custom order. If you close separately, you are exposed to directional risk. I'm not sure about the current P/L. Going forward, if you consider a trade and want a feedback, it is usually better to post before you make the trade, not after.

This is similar to what we do with VXX strategy.

IB don't make deals and don't bargain. Their rates are already low enough. Another thing that I like about them - you don't need "negotiating" skills to get a great rate.

I don't use WebTrader, but I wouldn't use stop losses anyway. The MMs will eat you alive. Just place a mental stop if you want to, and sell when it reaches it.

Not sure if you had a chance to look at our performance page, but we publish full track record. Each and every trade is there, winners and losers, and each trade is based on real fills and comes with screenshots of my broker fills.

Yes, paper account does not give reliable indication about fills. It would be very different in a real account.

For members, there is no change - you post your questions on the forum. You will just have the mentors answering them, and you will know that those are members you can trust. Of course I'm still here and will be available as well, but it will allow for more active and prompt responses (in case I'm not near my computer, there will be a mentor to provide a prompt response). And members will get more diverse responses.

We are pleased to introduce a mentoring program where experienced members will help newer members to get up to speed. The mentors will provide guidance and answer questions on the forum. This program will provide new members with more diversity, more opinions, and let older members to contribute from their experience. Traders who have been SteadyOptions members for considerable period of time, have a good understanding of options and the strategies we use, and are willing to help, are good candidates to become mentors. Potential candidates would need to build some history of contributing on the forums and responding to members questions. We currently have the following members as mentors, and will be looking to add more in the following weeks and months: @Yowster - Steady Options Contributor @krisbee - Steady Options and Simple Spreads Contributor @TrustyJules - SteadyOptions contributor @cwelsh - Anchor Trades Contributor @Marco @Paul @luxmon @rasar @Djtux @zxcv64 @Peeyotch - SteadyVol mentor Mentors will have "Mentor" title and brown color. Please note that this is NOT one on one mentoring. I encourage members to post their questions on the forums so everyone can benefit and learn, instead of PM the mentors.

So basically your charts confirm what I suggested: if the stock stays close to the strike, you can get a nice winner. But all it takes is 3-5% move - and it can easily lose 50-90%.

Was it for Aug 2016 cycle (earnings on Sep29, so Sep29/Sep30 calendar)? I believe you are getting those results because your software is looking at ATM calendar value every given day. So the strikes change. I just backtested the calendar for that cycle, and depending when you entered, the loss varied between 30% and 90% because the stock moved. Unlike our pre-earnings calendars, this setup is not resilient to stock move, and COST can easily move 3-5%.