Humble

After further consideration, we will provide everyone who contributed to this post by suggesting a name to the new service 2 months of a free access as a token of our appreciation.

What are Simple Spreads? The strategy description has been provided by Chris Welsh. One of the challenges of Steady Options relates to the amount of time the trades take and the difficulty understanding them. We have listened to our members and are creating a new strategy for the space called “Simple Spreads.” Simple Spreads is just that – much simpler trades, that take less management, easier to enter, and easier to manage. The Simple Options Service highlights 2-3 trades per month Trades which are not as time sensitive as the core Steady Options strategy Ideal for smaller accounts Targets trades with a large margin of safety with an average profit target of 5% to 10% per trade Trades that naturally hedge against each other (e.g. profit by markets moving in different directions) The Strategy Simple Spreads is made up of leveraged covered calls (our version of diagonal spreads). The leveraged covered calls is basically what some traders call Leverage With A Poor Man’s Covered Call. The strategy is similar to covered calls, but the stock is replaced with DITM calls. The model portfolio is $25,000. The Strategy is structured to run on accounts of $25,000 and greater, but many (if not most) of the trades will work on smaller accounts. Leveraged Covered Calls (2x to 4x the position size of the Vertical Put Spreads) / Also known as Diagonal Spreads Step 1 – Identify a stock that meets our metrics and setup Step 2 – Purchase a deep in the money long dated call (near 90 delta or higher and 6-9 months out) on an identified stock Step 3 – Sell a call against the deep in the money long dated call 3-6 weeks out Here is how a typical setup would look like: Assignment risk One of the frequent questions is: what happens if the stock rises and the short calls become ITM? Is there an assignment risk? The answer is that assignment risk becomes real only when there is very little time value in the short options. This will happen only if they become deep ITM and we get close to expiration. When it happens, we will usually roll the short options or close the trade. In any case, this is not an issue because even if we are assigned short stock, the short stock position is hedged by the long calls. In case of the upcoming dividend, there is some assignment risk only if the remaining time value of the short calls is less than the dividend value. Of course there is no assignment risk if the calls are OTM or around ATM. Why Simple Spreads? There are dozens of services that identify covered calls and vertical put spreads to trade. We’re different in that (a) by pairing it with vertical put spreads we reduce market risk as the two trades profit in different market conditions, (b) by using leveraged covered calls, we increase potential returns, widen our profit window, and reduce the amount of capital necessary for such trades when compared to traditional covered call spreads, and (c) we use more than just simple “filters” to pick our stocks, using a combination of fundamental analysis, technical analysis, and momentum in picking trades. The forums will also provide an ideal location for new options traders to begin grasping and trading both introductory and more complex options strategies without having to be tethered to a computer. Where can you find the trade and the trade discussions? Simple Spreads Trades Simple Spreads Discussions Here is the trading history of 2020 (before Simple Spreads was launched): The current list of all trades since inception is available on members forums. Here is the summary of all subscription options: Simple Spreads (SS) is a separate product. If you want to have it as a standalone subscription, please use of of the links on the subscription page. SS is included in the Lorintine Bundle along with Anchor and Collars. The 2 services bundle includes any 2 services of your choice. It does NOT include all the services from the Lorintine bundle.

Thank you everyone for posting, highly appreciated! The name will be "Simple Spreads". Everyone who suggested a name that includes "Simple" will still get the 2 months of a free access.

We will be posting the details shortly.

I was thinking about something not too complicated. Our first choice was Simple Options. We cannot use it, so my next idea was Simple Spreads.

While I agree that Steady prefix is our trademark, we want to avoid confusion. We already had few members signing up for Steady Momentum thinking that they sign up for Steady Options.. This is designed to be a simple service, tailored to traders who are busy with their daily jobs and cannot spend much time on a time consuming service like SteadyOptions. Our first choice was "Simple Options", but since there is a service called "Simpler Options", we cannot use the name even if we wanted to. The names I like so far are "Easy Options", "Lazy Options" or something similar. Lets keep trying.

And if you compare options prices for NKE during usual week (Dec.17 at close): with prices on Dec.18 at close: you will see that after hours move does count. When earnings were after hours on Friday, even options $3-5 OTM still had decent value.

Matter of few weeks probably.

We want tp avoid names including "Steady" not to be confused with the main SteadyOptions service.

Simple Options was actually considered, but it would cause confusion with "Simper Options" service.

Hello everyone. We are about to launch a new service that will be managed by our long time partners from Lorinitine. The new service will have much simpler trades, that take less management, less time to enter, and with performance that is easier to understand. The Simple Options Service highlights: 4 – 6 trades per month Trades which are not as time sensitive as the core Steady Options strategy Ideal for smaller accounts Targets trades with a large margin of safety with an average profit target of 5% to 10% per trade Trades that naturally hedge against each other (e.g. profit by markets moving in different directions) It will be made up of two “core” trades, a leveraged covered calls (our version of diagonal spreads) and vertical spreads. At this point we are looking for a name for the new service. Members are welcome to offer names, and as an incentive, a member who will suggest the winning name will get 2 months of a free access to the new service. Lets come up with a killer name!

If you are assigned, you are not short the calls anymore - instead, you are short 100 shares for each call you were short. What to do with the short shares is up to you, you can close the position anytime.

I completely agree. And obviously different people have different goals, different perspectives and different priorities. If someone spends some time learnings the strategies, becomes proficient and makes 50-80% on a $100k portfolio (which is completely doable, many veteran members make more), that's an extra $50-80k a year. For some people it might not be worth the effort, for others it can be a second salary (many people in the US don't make that much as a first salary, not to mention many developing countries). btw, many trading ideas shared by members are scalable far beyond the $100k limit we recommend, and this is where treating it as a trading community and not an alert service can be really useful. Many members told me that a single trading idea shared by another member covered their subscription fee for 5-10 years..

@zxcv64 this post definitely qualifies as "post of the month". Maybe even of the year. Thank you so much for sharing your experience!

This is pretty much correct. Theoretically, you can be assigned at any time by someone who "doesn't know any better" and giving up all the time value. If and when this happens, it would be a gift. Realistically, the assignment risk becomes high when time value becomes really low. And for the record, anyone who is long the option can exercise it at any time.

Break even means the same as for the stock prices - the price is the same as your purchase price. P.S. Don't assume that "as soon as the stock goes up by couple cents, options turn green and you start to make money". This will depend on how fast the stock goes up, Implied Volatility etc. If the stock goes up, IV can decrease and you can still lose money. If it goes up not right away but after few days, the negative theta will negatively impact the options price. There are many factors involved here.

So.. it's the end of the month, time for a decision. Since this is our first award, we have to take into account contribution of the last few months, not only one month. And this time it will be not one member but three.. surprise surprise.. The award goes to The Three Musketeers ( @gf58, @TrustyJules, @FrankTheTank) Thank you for your contributions, we all appreciate it very much!!

I'm pleased to introduce a "Member of the Month" award. This award will be given at the end of every month to a member who had the most significant contribution during the month. The award will be equal to a monthly subscription fee, refunded to the PayPal account. How we will determine who get the award? One way to do it is based on members reputation - each time you like someone's post, their "reputation" gets an extra one point. Thank you everyone for your contributions! We appreciate it very much and hope that more members take part in our forum discussions. This is the whole purpose of SteadyOptions. Many thanks for @Ringandpinion for this excellent idea!

I think it's probably a good idea just to watch the spreads for a while and try to enter at the low end of the recent range. I'm not sure there is any time which is better than other.

Generally speaking - yes. But it has to be done on case by case basis. Specific straddle RV is more important than general market IV, and in some cases RV might be still reasonable even on a big down day.

Additional subscription, but some might be part of Anchor or Momentum.

@fakka I think you need to look at the total performance, not just income. A gain is a gain, no matter if it comes from selling covered call, dividend or stock appreciation. So overall, you are correct. As I said, I believe it's a good strategy overall - but we need to be aware that it's not a holy grail, and in some cases, just holding the stock might produce better results. So we don't really disagree - I'm just trying to show that there are no free lunches in trading, and each strategy has its advantages and disadvantages.

Sorry.. here is the table that illustrates the AAPL scenario: As we can see, the stock would produce a respectful 25% gain in the last 10 months. Selling covered calls would turn this gain into a 3% loss.

You are right, my example was not the best scenario to illustrate the risks. The main risk is this: when a stock goes up sharply, the covered call significantly reduces the gain. When it goes down, the gain from the sold call is not enough to offset the lost gain from the period when the stock went up. Here is a better example from one of my old SA articles: Why Writing Covered Calls On Apple Might Be A Bad Idea

@fakka Covered call is similar to naked put and it's a very good strategy that in many cases allows you to get similar returns to owning the stock with less volatility. However, there are no free lunches. The most obvious downside is as you mentioned limiting your upside. So consider the following scenario: 1) Stock goes up by $50. Since you sold a covered call at $5.60, this was your gain (plus the difference between the stock trading 56 and the strike, so total around $7). 2) Now you sell another call at similar price. The stock goes down $50 back to $56. The call protected you only by $5.60 (or whatever price was), so you lost around $44. Your total loss is around $37 while the stock is unchanged. The bottom line: this strategy is not performing well during periods of high volatility. You get only limited upside, but much higher downside if the stock starts to jump around.