Humble

You might want to read the Best Practices/Tools topic. As I mentioned there: In my opinion looking at SO subscription cost (or the cost of any tool or course) as percentage of your account is a mistake. You invest in your trading education. You invest in your future. You expect that what you learn will help you to improve your trading and your profitability going forward. In the same way as people who pay $5-10k for educational course don't expect an immediate return on their investment. Or people who pay tens of thousands per year for college education are fully aware that they are investing in their future.

Regarding the rates, we are very competitive in the market place and provide a substantial value over other services unless your sole purpose is to purchase the lowest price product possible. We recognize that is the goal of some traders, however, many traders appreciate the value we provide in terms of performance, community, education etc. We encourage everyone to do their due diligence and compare us to other services. Many members tell us that we could charge double and still be the biggest bargain in the industry. We believe in work and long term commitment, not in "get rich fast" schemes. Like any professional education program, our programs require work and discipline. We are only interested in serious traders dedicated to their professional development. If after browsing our website you believe that $4/day for a service like SteadyOptions is "really high", then you probably shouldn't subscribe.

The strategies are scalable up to $100k. If you make even "only" 30%, that's $30k. Pretty good ROI on your subscription fee I would say. Do you know any (legal) business or income outside of a retirement account that you don't need to pay taxes on?

@Yowster mentioned the tools few posts ago.

OptionNET Explorer Software Webinar Not sure about Oct.2019, you will have to ask them.

I'm using 2.0.54. Hope you used our link to get the discount.

All the tools are listed under Promotions and Tools forum. In my opinion, the most essential tool for any options trader is ONE software. It really shows you the P/L charts and lets you do some backtesting.

Brokers and commissions

As mentioned in all trade alerts: "The number of contracts is per 10k portfolio and represents the closest number of contracts for 10% allocation." Since we cannot buy partial contracts, this is the best we can do in terms of allocation and reporting. Some trades will be slightly less than 10%, some slightly more. To answer your question for 14k portfolio, you don't have to do the exact multiplier of the trade. You can use (for example) 7:3 ratio instead of 5:2. The goal is not to replicate exactly our trades and our performance. The goal is to learn the strategies, so you can understand them and make slight modifications, based on your risk tolerance, portfolio size etc. And yes, you will always have some percentage of the funds in cash. Even our official model portfolio is never allocated 100%. This is what we mean when we say "We use a Total Portfolio approach for performance reporting, including cash reserve." I believe the goal of all new members should be to learn the strategies. This should be the first and most important step

Please read the topic I linked for details about Tradier. Brokers and commissions topics has a lot of information about brokers, you can also post some questions there. Personally I'm using IB because other brokers wre not available in Canada. Please make sure to read the Welcome to SteadyOptions post and Frequently Asked Questions. It should answer most of your questions.

1) There is currently a very wide range of brokers. Some use Robinhood which is completely free. Some use Tradier and take advantage of our Tradier Brokerage Special Offer at $10/month. Even with more traditional brokers like IB or tastyworks commissions now are much lower than they used to be, so impact of commissions should be no more than 1-2% per month, much less with Tradier or other cheap brokers. 2) For 10k portfolio, each trade is around $1k. 3) Correct - assuming no commissions. In reality it is less, depending on how much commissions you paid.

Billionaire investor Bill Ackman turned $27 million into $2.6 billion by betting that the coronavirus would tank the market The mysterious trader nicknamed ’50 Cent’ made $200 million last week as the market blew up There are more examples of "monstrous wins" by different traders. But in all cases, they were part of a bigger portfolios, usually a small part. We are in a full agreement that Taleb is a very smart man and a great trader. This is not the point. As you pointed out yourself, he is probably allocating 10-15% of his account to tail risk strategies. Which was exactly my point all the way - this is not a standalone strategy. You cannot allocate your whole account to the strategy and still make money during normal times. This is why I still believe the headline is misleading. But I enjoyed the discussion regardless. 😊

I would be glad to be proven wrong. But I think there is a good reason why they recommend placing only 3.3% into the fund.

You are missing my point. A standalone strategy that can produce over 3,000% in one month cannot make money in normal times. Period. By definition. And I never said he is full of shit. On the contrary - as I mentioned, I consider him one of the smartest people I know. And no, not everyone can produce same results. But he must be investing in a mix of strategies, including tail strategies. So let me clarify it one more time: If you have $1M and put all of it into Universa’s fund on Jan.1 2020, you will have over $30M on March 30, 2020. But you would be losing money big time during normal years. If you placed 3% of the same $1M into Universa’s fund and the rest into S&P 500 as they recommend, you would be flat in March, and outperform S&P in the long term. Outperforming S&P over time by few percentage points per year while being hedged against catastrophic event is an excellent result - very few can do it. But it's not the same as making 3,000%+ during crisis on the whole portfolio AND being able not to lose much rest of the time.

"mostly around tail strategies" is not the same as put the whole portfolio into those strategies. And "long stretches of unimpressive returns" is not the same as losing money 95% of the time. There is no magic. Tail strategies are designed for a small part of your portfolio. They are lie lottery tickets. A strategy cannot make thousands percent of returns during crisis and make money during normal times. Even Taleb cannot do it. I would assume that he is putting a larger percent of his portfolio into those strategies compared to "average" investor. Were you able to find returns of the Universa’s fund in "normal" years (excluding 2008-2009 and 2020)?

You mean that Taleb puts all his portfolio into Universa’s fund like strategies? I highly doubt it. Exactly.. no matter what any of those guys is telling us, there are only 2 ways to protect your portfolio: stock/index puts or VIX calls. Familiar with 50 cents trader? Take a look: https://www.cnbc.com/2018/02/12/the-mysterious-trader-nicknamed-50-cent-made-200-million-last-week-as-the-market-blew-up.html https://www.reuters.com/article/us-usa-stocks-volatility/big-volatility-options-trade-points-to-mystery-investor-50-cent-idUSKBN1ZS0HW The strategy involves buying next month OTM VIX calls around 50 cents. Now, if you bought those calls on Feb.1, this would be your return on March 16: However, you would be losing the whole premium 95% of the time. Same is true for far OTM puts. You spend maybe 2-3% of your portfolio on Universa’s fund like strategies, and it helps you to protect the portfolio during big drawdowns. But can you say that you made 4,000% (or 7,000% in case of VIX trader)? btw, I implemented a similar strategy with SPX puts. This is how it looked on Mar.18: (Posted on twitter on March 18 - https://twitter.com/SteadyOptions_/status/1240315512229376001) Some of them gained over 1,000-1,500%. But I never claimed to make those returns.

P.S. My comments don't mean in any way any disrespect for Nassim Taleb. He is one of the smartest people I know, and I have a tremendous respect for him. I just think that those headlines are misleading. Which is not surprising - the financial media was never interested in facts, it's more about ratings. Exactly like CNBC who host clowns like Cramer and Najarian brothers only because they are entertaining.

Exactly my point!! Nobody in their right mind would invest in this fund as a standalone fund. It's always a small portion of the overall investment. While technically the fund did made those returns, advertising it that way is like saying that if you invested 1M in the fund on January 1st, you would have now $40M+. But nobody would invest it that way because most of the years you would be losing money big time. Another way to look at it is like us advertising that Anchor "hedge fund" made 1,000%+ because the hedge part (the long puts) increased in value 10 times. Nobody would do that because nobody would buy those puts as a standalone investment - they are part of a broad portfolio.

Because event like 2020 (35% down in just few weeks) might be a one in a lifetime event, and it might be another 20-30 years till the next one. As I mentioned, if you are losing money year after year, you might not have enough capital when an event like 2020 comes. IF it comes at all. You know what they say - more money has been lost in preparing to corrections than corrections themselves. And again, why they recommend placing only 3.3% into it?

Of course. But we also need to put things in perspective. How the fund itself (not the 3%/97% mix) performed during "normal" years? They don't provide those numbers. The performance they mentioned included the huge gains in 2020 (4,144%), and probably some nice gains in 2008-2009. But if it was losing around 10% per year during normal years, someone who joined in 2010 wouldn't even have enough capital to enjoy that 4,144% gain. and again, if it is so good, why they recommend allocating only 3.3% to it?

Here is some data: https://www.investopedia.com/news/black-swan-investors-lose-big-stocks-thrive/ "after hitting peak performance in September 2011, these funds have fallen by about 55%, according to data from CBOE Eurekahedge reported by the Journal."

When they are saying "96.7% in the S&P 500 and 3.3% in Universa’s fund would have produced a compounded return of 11.5% a year since March of 2008 versus 7.9% for the index." - this is an excellent result, but don't forget that this period starts at the beginning of the 2008-2009 financial crisis, and ends at the period when indexes were down big time, and the Universa’s fund component had huge returns. I can assume that the Universa’s fund itself would be losing a lot during "normal" periods, otherwise why they recommend allocating only 3.3% in this fund?

They say that they recommend their customers 3% allocation in the fund. When Taleb says "if nothing happens, I make a little, If something happens, I lose a little, if something big happens, I make a lot" - does he mean those are returns of the fund itself? I would be really interested to know what exactly the strategy is. Because if this is the case, why they recommend their investors only 3% allocation, and the rest in S&P 500? Investing in the fund as a standalone seems like a holy grail.

Very interesting, thanks for sharing. So they say "the fund returned 3,612% in March". And then: "Spitznagel included a chart in his letter showing that a portfolio invested 96.7% in the S&P 500 and 3.3% in Universa’s fund would have been unscathed in March, a month in which the U.S. equity benchmark fell 12.4%. The same portfolio would have produced a compounded return of 11.5% a year since March of 2008 versus 7.9% for the index." This is not exactly apples to apples comparison. I assume the fund itself would be losing money all years, but the mix is what makes it so attractive. It's some kind of hedge, but the one that doesn't lose in up markets. Using similar terminology, we can say that the "hedging" part of the Anchor made over 1,000% in March. Of course this would be a bit misleading because it was part of a portfolio that had other components.

No, your breakeven is at 1030. But those calculations are at expiration. The P/L chart before expiration is different. Also, IV changes can effect the P/L dramatically.