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Thank Bret. Here is the podcast:

The OptionAlpha is a highly respected publication managed by highly dedicated and extremely knowledgeable editor, Kirk Du Plessis. I had the privilege to be interviewed by Kirk recently for his highly successful podcast. The Podcast was created and dedicated to options trader, stock market investor or trading wannabe. Click here to view the article

First of all, you should never use market orders. Some options have penny increments, some don't. For example, OVTI doesn't - however, you can trade the spreads with penny increments. So I got filled at 1.71 bug I could not trade penny increments on the individual legs.

Options Trading is a business. As in any business, there are costs. One of the major costs is commissions that we pay to our broker (other costs are slippage, market data etc.) While commissions is a cost of doing business, we have to do everything we can to minimize that cost. This is especially true if you are an active trader. The impact of commissions on your results can be astonishing. This excellent article by Business Insider is asking the right questions (and also answering some of them): Click here to view the article

Here are the main differences between fly and IC: IC has wider profit zone, but less potential gain (if used wings wide enough) Fly is likely to require more maintenance because there is profit zone is more narrow. Fly will provide better results if the stock remains close to the middles strike. Overall, there is no real advantage for one strategy over another. It all comes to risk management.

Our long term followers know that buying premium into earnings is one of our favorite strategies. I wrote about the strategy in my Seeking Alpha article Exploiting Earnings Associated Rising Volatility. IV (Implied Volatility) usually increases sharply a few days before earnings, and the increase should compensate for the negative theta. We have been using this strategy in our SteadyOptions model portfolio with great success. However, not all stocks are suitable for that strategy. Some stocks experience consistent pattern of losses when buying premium before earnings. For those stocks we are using some alternative strategies like calendars. Click here to view the article

Any weekly trade can get 10-15% if the stock remains in the range for few days. That applies to calendars, ICs, flies. I don't see any real advantage to flies compared to ICs. Capital use depends on strikes. I listened to Dan webinars as well, even did few full courses. It looks very nice on paper, but not always so smooth in practice. We did some RUT and SPX weekly calendars when IV was much lower. Those trades are tough to do as part of a newsletter because the adjustments have to be very timely if the stock starts to move. The losses can be brutal if you "fall a sleep" and don't adjust on time.

Alex, there is a negative correlation between risk/reward and probability of success - https://steadyoptions.com/articles/post/general/risk-reward-or-probability-of-success-r91. Fly is basically a narrow IC. IC can also have different risk/rewards, depending where you place the strikes. The wider the strikes - the higher probability of success, and worse risk/reward. IC has good risk/reward, but to book those fantasy land returns that you see on the P/L chart, the stocks needs to stay exactly at the middle strike, while IC can have much wider profit zone. As you mentioned, it ultimately comes to risk management. You should never look at those trades as income generators. Bank interest is income generator. Dividend is income generator. Those trades are NOT. The fact that you get a credit, is irrelevant because you have no guarantee that this credit will stay in your account. When you say flies - could you please clarify which flies do you mean? On indexes? Or stocks? In context of earnings?

We are doing ICs when IV is high. Both are vega negative and are expected to balance the calendars and the straddles. Flies are a good strategy, but it doesn't really have any big advantages compared to ICs.

Thank you Alex. Minimizing drawdowns is our main goal. “In trading/investing it's not about how much you make, but how much you don't lose" - Bernard Baruch. I'm very grateful and thankful to all members of our trading community. I believe this is what makes SO unique. I'm sure with proper effort and commitment and help from our members, everyone has a good chance to become a better trader and improve their results.

Dear Alex, Not sure if you had a chance to read my previous comment, but yes, I specifically mentioned that commissions are higher with cheaper spreads. I also mentioned that on average, monthly gain is reduced by 1-1.5% if you are using IB. Exchange fees can work both ways - in some cases, I paid 0.10/contract because of "adding liquidity". Average is still around 0.75/contract. Brokers and Commissions topic has more about this. Not sure why slippage can take "serious effect" as those are real fills and not "hypothetical" returns. I don't know if most traders will have "substantially lower returns", but I know many members that actually get better returns, by being more proactive, taking some trades that are not part of our official performance etc. As I mentioned in the article, 50% gain in SNDK, 30%+ gain in INTC, 30%+ gain on YELP, 25%+ gain on AMZN, 15%+ gain on YUM are just few examples. Also, please remember that unlike most other services, we post returns on the whole account and non-compounded. Commissions are part of trading, and all our updates and performance page mention that returns don't include commissions. To compare our performance reporting to other newsletters, I would suggest reading Performance Reporting - The Myths And The Reality article. I believe that our numbers are completely realistic and our performance reporting is among the most transparent in the industry, but I realize that no matter what we do, we cannot please everyone. To put things in perspective, I would like to quote one of our long term members who posted review on Investimonials - http://investimonials.com/newsletters/reviews-steadyoptions.aspx#4profit "I've been a member of Steady Options for almost 2 years and I have been a trader of every strategy, vehicle, and time frame imaginable for over 15 years. I have not only been a member of most every site out there but also ran a trading platform with over 400 members. We had quite a few months that netted over 100% in performance through auto trading. These were based on real fills and we often posted our personal fills online. That being said, it never ceased to amaze me how a few people would nickel and dime and nit pick when it came to performance. Heaven forbid that someone's fill was a dime different than what we posted. Suddenly we where liars who were out to get everyone. Get real. I encourage everyone to take look at other option sites out there and understand how their published performance is tracked and reported. In reality most sites out there are completely off with what they post and what is actually obtained. In fact, most sites simply send an alert and that's where it ends. Management and exit is on you. As an example, here is a description of another option site explaining how they post performance: " ....posting results that indicate what was possible for traders to achieve on every single trade, good or bad. We realize that it is highly unlikely to achieve these results, but it is incredibly important to track the performance of our trades in this manner." They post the HIGHEST "what was possible" return and count every trade that popped at least 10% to the upside a winner. Even if it went up 10% and then fell 50%. But this is what people want to see ... and makes them sign up. Now let's turn to SO. I would be willing to bet that Kim and his site to be one of ... if not THE most accurate, concise, realistic and transparent sites out there, ESPECIALLY when it comes to performance reporting. However, I'm sure a few of you out there will argue back and forth the minor details in this area, so let's look at it a different way. I've owned a few businesses and whenever you look at the potential profit it is prudent to include a margin of error. Typically, it's 10% to 15%. Let's do that here and ramp it up even more so that there is no confusion. Let's use a 50% margin of error. Sound fair? So we are going to use only HALF of what is reported. SO achieved 89.7% in 2013. If we include a 50% margin of error he still would have returned over 43% which means he would have OUTPERFORMED the S&P 500 by over 11% in it's best year since 1998. I might also add the stock market achieved these returns simply because it headed straight up. It was directional. Let's remember Kim has a non-directional strategy approach with the ability to enhance returns even more during a choppy or negative market. Through running my own site I am well aware of the time and patience it takes to run a membership program like this. You are limited on vacations, and flexibility of time, and have to deal daily emails and those with unrealistic expectations."

All spread strategies are commissions consuming. This is why it is so important to use a cheap broker like IB. I'm not sure what 7-8% refers to, but it is fairly easy to calculate the impact of commissions. If you use IB, you will pay ~$3 (0.75*4) per spread per calendar. So even with cheapest calendars like FB which costs 0.60, commissions reduce the gain by 5% (3/60). With $2 spreads it is 1.5%. Since we also trade higher priced spreads like RL, EXPE, AZO etc., average spread is around $2-3, so commissions reduce the gain by 1-1.5% per trade. If you make 10 trades per month and allocate 10% per trade, the overall monthly gain will be reduced by 1-1.5%. Using more expensive broker will change this. If you trade small account and use broker with ticket charge, the results will be impacted dramatically.

Dear Alex, Thank you for your kind words. You joined SO less than a month ago. I'm sure you missed some trades. Maybe you closed some trades too early (BABA is one example I remember). The track record also includes few trades that were open before you joined. I'm sure that over time you will learn to get better fills and improve the results

Numbers don't lie. Take a look how the major indexes performed in January, and compare it to SteadyOptions performance: S&P 500: -3.1% Dow Jones: -3.7% Russell 2000: -3.3% SteadyOptions: +20.7% ROI After booking 146% ROI in 2014, we closed 8 trades in January, producing an incredible 88% winning ratio and 16% average return per trade. Click here to view the article

Looks like VIX at ~20 become a new normal. This is a good news for options sellers who can get higher credits when trading strategies like ICs.

By Gery Nagy, optionsrules.com We discussed in the previous article that the risk graph of the stock market involves unlimited risk. That means despite using super good stop levels, there might be days when the market skips your limit order. Or, your market order could be executed at a price you did not expect. Consequently, a precise risk management cannot be achieved. Those who trade on the Forex market may groan now because this is not strictly true for them. Yes, the Forex market is not characterized by a gap up, gap down, therefore the STOP level can be more easily planned, as it is usually executed where we planned it. Click here to view the article

Just be aware that those weekly trades are relatively risky. As a general guidance, I would recommend to reduce position sizing and close at least 2-3 days before expiration. When the markets are calm and moving sideways, it might seem like an ATM machine, but when the markets start to move, especially in case of gaps, losses can accumulate very quickly. So I'm not saying people should not trade them, just be aware of the higher risks.

There is always a tradeoff. RUT IV is higher, but so is HV (historical volatility). So it's true that you can trade further strikes, but the probability to reach those strikes is similar because RUT tends to move more (on average).

Thanks for sharing Bret. What's your plan for those trades (profit target, maximum loss, adjustments etc.)?

Option is the contract or deal, that lets a person to sell (put) or buy (call), a certain asset before or on the specific date. There are about 72 options trading strategies. There three most commonly used options strategies: bullish, bearish and neutral or non-directional. The following infographic describes few basic options strategies. Click here to view the article

Here is an interesting article about current market conditions from someone I follow and respect - http://stateofthemarkets.com/report/50585/. So, in September/October the S&P 500 fell nearly -10% in 19 days. In December, the index dropped almost -5% in 7 days. And over the past week, the market dove -4.2% over a span of just 5 days. The bears suggest that with pullbacks becoming more frequent, the primary trend may be about to change. Our furry friends go on (and on) about global macro risk, the Russian currency crisis, the slowdown in Europe, the crash in oil, current valuations, where rates are headed next, etc. And yet, each time, the market has reversed higher within a single session and proceeded to dance merrily higher as if the worries that were behind the dive had suddenly abated. Among market technicians, such a move is referred to as a “V Bottom.” There is no waffling around the lows, no “testing” of support, and no second guessing about the validity of the worry. Nope, a “V Bottom” is simply a risk-on/risk-off type of situation. And the key point is that this type of action has dominated the stock market environment since the end of 2012. According to Dana Lyons of J Lyons Fund Management, the S&P 500 had produced just under 40 “V Bottoms” during the 62-year span between 1950 and 2012. This means that about once every year and a half, the market would fool everyone and put in a “V Bottom.” As such, one can easily argue that this type of action had been fairly rare. But apparently, this is no longer the case. Since the beginning of 2012, there have been a total of 9 “V Bottoms” – and we could be seeing the start of #10. So instead of the market “V-ing” a couple times a year at most, it is now reversing on a dime every three months or so on average.

We wll check XOM when we get closer to earnings date, but my guess is the the straddles will be expensive.

So... 5 down days in a row.. S&P down 100 points in one week. What's next? So far every dip has been followed by a spirited "V bottom." Will the history repeat or we are headed lower from here?

Yes to both questions. We might have more than 60% for short periods of time! but most of the time it will be 60% or less.

US Value Bundle should be sufficient. I also have CBOE futures for VIX futures.