Humble

The number of contracts is usually to fit into 10% allocation. If you have slightly more than 10k, it is reasonable to do 2 contracts on trades that cost around $6.

"1.) I haven't yet matched his performance - I've come to believe simply following his alerts, you will NEVER match his performance - you must learn to anticipate and make this system your own (and the folks in this community are more than happy to help you do that) 2.) Losing streaks are expected (which is what I'll discuss for now)" Absolutely agree on both. But to make this system your own, you need more than few weeks or even months. Those articles might help: Why Retail Investors Lose Money In The Stock Market Are You Ready For The Learning Curve? Can you double your account every six months? How to Calculate ROI in Options Trading Performance Reporting: The Myths and The Reality Are You EMOTIONALLY Ready To Lose? "This STATISTICALLY allows a worst-case losing streak of about 7." Agree. "To be conservative, let's assume each loser loses 50% - that's nearly a 35% draw-down on the account." This is where I would have to disagree. While we did have one 7 losers streak since inception - https://steadyoptions.com/performance_2013 (January 2013), it was nowhere near 35% drawdown. Our average loser is around 13%, so 7 13% losers with 10% allocation gives you 9% drawdown. We had few 5 losing streaks, and I believe the largest drawdown since inception was around 20%. For a system that produces triple digit gains year after year, that's completely acceptable. Does it mean that 7 50% losers is impossible? No, it is possible, just extremely unlikely. But if you are still not ready, then yes, reduce the allocation. To demonstrate my point, I will use the Steady Condors strategy. The reason is that this is a simple and totally reproducible system (so there is no question of missing some good trades), and we also report performance on the whole account including commission. SC produced 24% average annual return since 2008. But it had pretty bad year in 2014, producing almost 19% drawdown. Guess what? In 2015, it produced 47% return (best year ever). First 2 months of 2016 have been tough so far. Imagine someone who joined in 2014, lost 15-20% (depending on timing), cancelled just to see the system producing 47% return in 2015, then rejoined just to be down another 10%+ in 2016.. Not a pretty experience. But if you believe in a system in general and it suits your trading style, you should stick through good times and bad.

I experience this as well. It should catch up tomorrow. We will close the trade as separate spreads anyway (call and put).

Are you referring to straddles?

This demonstration shows how to execute some of our trades in Interactive Brokers. Download video: Executing Orders in Interactive Brokers.wmv

Great post Chuck, thanks for sharing! Learning from our mistakes is the best way to become better traders. Position sizing is one of the keys to success. I cannot stress it strong enough. No matter how confident you are in a specific trade, DO NOT OVERALLOCATE. "Kim’s performance is phenomenal, but that’s because he knows what he’s doing." Not only that, but because I'm doing it for a LONG time. I started trading/investing in 2002, and have been trading options exclusively since 2008. It took me a long time to become consistently profitable. But when you find your niche and keep doing the same setups time after time, you become very good at it. There is no magic here, no holy grail and no shortcuts. Practice and hard work will do the trick. People see all the hype and think it is an easy task. To become an engineer you have to study 4 years, and probably another 4 years (at least) to become a good one. Why people expect it to be different in trading? So my advise to all members is: if you believe in this trading philosophy and it suits your style, just be patient. Practice, learn and the results will come. btw, if you haven't seen it yet, I provided an update on My 2015 Personal Account that produced 80.2% return, after commissions, trading exclusively SteadyOptions and Steady Condors strategies.

I see your point regarding trade management. But there are ways to automate the rolling by setting GTC orders at our usual credits. And even if you miss some of the rolls, it's not ctitical and sometimes it can work in your favor. But considering short holding time and low risk, I think it is still worth to do those trades. Also, remember that they can be very profitable during IV spikes. We missed the August spike, and things would look much better if we held 2-3 trades in August and got 25-30% gains on each.

Thanks Yowster, very good analysis as usual. My comments: Overall, I'm very pleased with the results. We are getting more selective, and it shows up. Straddles produced 4.26%, which some will call "mediocre gains", but we need to put things in perspective. First, average holding period of those trades is usually around 6 days, so 4.25% average return is 258% annualized return. Doesn't look so mediocre all the sudden. Second, it hedges our theta positive trades very nicely. To me, this is very decent result. Could be better, but I will take it. The performance was also impacted by big QIHU loss, which was completely unnecessary. SPY/TLT combo is a new strategy introduced this year. The results could probably be slightly improved with better management, but on a year when both SPY and TLT were down, this is an acceptable result, especially considering that TLT volatility was much higher than usual, which is not good for this trade. VIX trades: I agree regarding the broker, but most of those trades can be done with other brokers with slight variations. For example, the put calendar could be replaced with put credit spread. The only trade that was problematic executing with other brokers is the VIX call calendar. The theta positive index trades is where I see room for improvement. The SPX calendar and fly big losses impacted the overall performance negatively.

Thanks for posting. I have absolutely no problem discussing other strategies or competitors. Our goal is to learn as much as possible and expand our offerings. Any discussion has a potential to help.

I need to do some more backtesting, but the idea actually looks very interesting. They are selling short options that still have some premium left after earnings (even after IV collapse). The long options have 2-3 months to expiration, and in some cases they catch next earnings. He is buying strike slightly below ATM which seems to work pretty well. The short strike can be rolled week after week, creating more income. I think it has potential.

Which setup have you used for AAPL?

Well, if you open on Thursday like NFLX, all you have is a one day. And it's true that if the stock doesn't move after the initial move, you will make 5-10%. But negative gamma works against you and if the stock does move, the trader will be a loser.

Interesting. Generally speaking, I don't like trades with shorts expiring only one day to expiration. The gamma risk is still too high. In this case, the stock stayed relatively close to 100 strike, which made the trade a winner. Did he explain why he went with 95 as long strike? He is selling lower strike so it requires $500 in margin, plus the debit. Looks to me that going with simple calendar (100 strikes both long and short) would provide better risk/reward.

And the stock was near the short 120 strike?

I didn't watch the webinar. However, "minimizes risk by using multiple time frames and several other edges that are available when using weekly options correctly." sounds very misleading. "using multiple time frames" is nothing more than some kind of calendar or diagonal. Being short weekly options still has huge negative gamma and does NOT minimize risk. Edwin, do you remember the exact setup of NFLX trade?

This video examines the relationship between risk/reward and probability of success in options trading. Usually good risk/reward means lower probability of success and bad risk reward means high probability of success. You will have to choose between a good risk-reward and a high probability of success. You cannot have both. Options Trading - Risk Reward vs. Probability.wmv

This video describes a trade on NFLX before earnings. The rationale was to take advantage of the increased volatility in our option by initiating this earnings play. We will show you in this video why this trade had a bad risk/reward despite inflated IV. Download video: How NOT to Trade $NFLX Earnings.wmv

This video describes Delta and shows how Delta impacts options pricing. It examines few live examples of different options strategies. Download video and slides: Options Greeks - The Delta.wmv Options Greeks Delta.pptx

This video describes Gamma and shows how Gamma impacts options pricing. It examines few live examples of different options strategies. Download video and slides: Options Greeks - The Gamma.wmv Options Greeks Gamma.pptx

I uploaded the PDF. The charts are posted each week in the list of candidates topic under Earnings discussion forum. The chart at the end of the video is the same chart.

The following video shows how the Vega impacts options pricing. It examines few live examples of different options strategies. Download video and slides: Options Greeks - The Vega.wmv Options Greeks Vega.pptx

The following video shows how the Theta impacts options pricing. It examines few live examples of different options strategies. Download video and slides: Options Greeks - The Theta.wmv Options Greeks Theta.pptx

Thank you very much guys! Planning to stick around for many more birthdays!

Thank you very much!

We are pleased to invite you to live "Trading Earnings Straddles" Webinar. Trading Earnings Straddles is one of our favorite strategies, and it's time to do a Webinar about this strategy. Trading Earnings Straddles Wed, Nov 18, 2015 3:00 PM - 4:00 PM Eastern Standard Time Please join my meeting from your computer, tablet or smartphone. https://global.gotomeeting.com/join/638603213 Recording: 2015-11-18 Trading Earnings Straddles.wmv PDF File: Trading straddles.pdf