Yesterday saw a nice advance on the S&P 500 and the market's other major averages. That's good for our bull put spread because it expands the distance between the market and the strike of our short put option. This trade is working out nicely and I'll start looking at March for trading opportunities.
The SPX has not really traded that far from where we sold our credit spread. Favorable directional movement will help us by decreasing the value of our spread, but the primary profit driver is theta. The reason directional movement is not as helpful as you might think is because by its nature a vertical spread is a hedged position.
Each option has its own set of greeks. When you buy one option and sell another, such as in a bull put spread, you have one position with a positive delta and another with a negative delta. The delta values will be slightly different, because one option will be a bit closer to the money than the other. Nonetheless, when the market moves both options are simultaneously effected.
When the market moved away from our bull put spread, the short option lost value which generates profits for us because we can close the position for less money than we received when it was originally sold. However, we also bought an option which is also worth less. Those losses on our long put option contract will offset most of the profits from the short option contract.
Because we are losing money on our long option, that favorable directional movement does not help us as much as you might otherwise think. Only an extreme directional move, that rendered both options essentially worthless, would allow us to exit the trade with the required profit. Absent an extreme market move, what we really need is for theta to whittle away at the position's combined time value.
So, the delta of the long and short option offset each other. If the deltas offset each other, why are we concerned about an unfavorable move toward our position?
We'll pick up with that tomorrow. If you are not a subscriber to our newsletter or mini-course, you can subscribe without cost or obligation to learn more about options and our trading methods.
Trade well and mind your risk!
Christopher Smith
TheOptionClub.com
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Wednesday, January 31, 2007
Tuesday, January 30, 2007
Credit Spread Trade Update with the SPX at 1,427
First, I need to do a little house keeping in follow-up to yesterday's post. At least one person was unable to follow the link, so I posted an alternative in the comments section but it was truncated. The full link is:
http://www.theoptionclub.com/quantum_swing_trader.php
Now, back to our trade.
Things looked good about this time yesterday, but as the day wore on stocks began to deliver mixed. Investors were tentative in advance of the Federal Open Market Committee's two-day meeting on the economy and interest rates.
The Nasdaq managed to climb 0.2%, the DJIA closed up less than 0.1%, and small caps advanced 0.4%. The S&P 500 lost some ground, down 0.1%. Volume was a mixed mixed picture, closing higher on the NYSE and lower on the NASDAQ.
We now have 16 days until our SPX options expire. We are too close to expiration for a call spread, so we will just need to be content holding our put spread.
Our short put option has a delta of about .08, which translates into an approximately 92% probability of the contract expiring out-of-the-money. The SPX is up about 6 points right now, so we'll just leave it alone and go about our day.
In a comment to a prior post, I was asked to expand up the greeks and why vertical spreads do not see big gains from favorable directional moves. I'll expand on that in my next post...
Good trading!
Christopher Smith
TheOptionClub.com
http://www.theoptionclub.com/quantum_swing_trader.php
Now, back to our trade.
Things looked good about this time yesterday, but as the day wore on stocks began to deliver mixed. Investors were tentative in advance of the Federal Open Market Committee's two-day meeting on the economy and interest rates.
The Nasdaq managed to climb 0.2%, the DJIA closed up less than 0.1%, and small caps advanced 0.4%. The S&P 500 lost some ground, down 0.1%. Volume was a mixed mixed picture, closing higher on the NYSE and lower on the NASDAQ.
We now have 16 days until our SPX options expire. We are too close to expiration for a call spread, so we will just need to be content holding our put spread.
Our short put option has a delta of about .08, which translates into an approximately 92% probability of the contract expiring out-of-the-money. The SPX is up about 6 points right now, so we'll just leave it alone and go about our day.
In a comment to a prior post, I was asked to expand up the greeks and why vertical spreads do not see big gains from favorable directional moves. I'll expand on that in my next post...
Good trading!
Christopher Smith
TheOptionClub.com
Monday, January 29, 2007
Swing Trading With Options
It's another day of fair sailing for our SPX trade. I don't have much to report in that regard, so I will take some time to talk to you about other things. I do trade other things than the S&P 500, you know!
Read on, because I will tell you how to get a free copy of my 1-hour audio presentation on Swing Trading With Options.
I have adapted many swing trading principles into my options trading. Most of what I have learned about swing trading, I have learned from Bill Poulos and his three trading courses. Yes, I've got all of them.
Of the three, Quantum Swing Trader is my favorite. However, his Super Divergence Blue Print course is a close second in that department. I'll explain why.
Quantum Swing Trader is a fully developed swing trading course and trading system. It follows the current trend, in expectation that the trend will continue. With solid money management it provides a positive expectancy and Bill Poulos works hard to make sure his students understand how to use his system properly.
Super Divergence Blue Print is what taught me how to really use Stochastics. This course address two issues. The blue print looks for a divergence on Stochastics, which you can check for every time you receive an entry signal from your trend following system; e.g., Quantum Swing Trader. If divergence is present, it is a signal to "stand aside" because the probability of the market moving where you want it to go is low. In short, it keeps you out of bad trades.
You can use that same information to place a counter trend trade, which means a trade that anticipates a change in the trend. Bill recently demonstrated exactly this with Apple, Inc., in a video presentation. He took the buy signals as APPL climbed higher and then got short once divergence identified the opportunity.
Quantum Swing Trader is released in limited production runs, which allows Bill and his team to properly service each new group of students. It has always sold out.
He is currently putting it back on the market with a bonus. He is including a free copy of Super Divergence Blue Print. It's a great deal (when I got my copies of each course they were sold separately), but I will "one up" Bill on this.
Purchase Quantum Swing Trader, let Bill give you a free copy of Super Divergence Blue Print, and then I'll give you a free copy of my one hour "Swing Trading With Stock Options" audio presentation. Use the link below to purchase from Bill, then forward a receipt to me at "chris (at) theoptionclub.com". I will reply to your e-mail and send my audio course.
...but you have to use this link!
If you need more information about Quantum Swing Trader, I have provided a link to a product review below which walks through its major features. I have also provided you with a link so you can watch Bill's AAPL video.
Quantum Swing Trader Review
AAPL Trade Using Quantum Swing Trader and Super Divergence Blue Print
Good trading!
Christopher Smith
TheOptionClub.com
Read on, because I will tell you how to get a free copy of my 1-hour audio presentation on Swing Trading With Options.I have adapted many swing trading principles into my options trading. Most of what I have learned about swing trading, I have learned from Bill Poulos and his three trading courses. Yes, I've got all of them.
Of the three, Quantum Swing Trader is my favorite. However, his Super Divergence Blue Print course is a close second in that department. I'll explain why.
Quantum Swing Trader is a fully developed swing trading course and trading system. It follows the current trend, in expectation that the trend will continue. With solid money management it provides a positive expectancy and Bill Poulos works hard to make sure his students understand how to use his system properly.
Super Divergence Blue Print is what taught me how to really use Stochastics. This course address two issues. The blue print looks for a divergence on Stochastics, which you can check for every time you receive an entry signal from your trend following system; e.g., Quantum Swing Trader. If divergence is present, it is a signal to "stand aside" because the probability of the market moving where you want it to go is low. In short, it keeps you out of bad trades.
You can use that same information to place a counter trend trade, which means a trade that anticipates a change in the trend. Bill recently demonstrated exactly this with Apple, Inc., in a video presentation. He took the buy signals as APPL climbed higher and then got short once divergence identified the opportunity.
Quantum Swing Trader is released in limited production runs, which allows Bill and his team to properly service each new group of students. It has always sold out.
He is currently putting it back on the market with a bonus. He is including a free copy of Super Divergence Blue Print. It's a great deal (when I got my copies of each course they were sold separately), but I will "one up" Bill on this.
Purchase Quantum Swing Trader, let Bill give you a free copy of Super Divergence Blue Print, and then I'll give you a free copy of my one hour "Swing Trading With Stock Options" audio presentation. Use the link below to purchase from Bill, then forward a receipt to me at "chris (at) theoptionclub.com". I will reply to your e-mail and send my audio course.
...but you have to use this link!
If you need more information about Quantum Swing Trader, I have provided a link to a product review below which walks through its major features. I have also provided you with a link so you can watch Bill's AAPL video.
Quantum Swing Trader Review
AAPL Trade Using Quantum Swing Trader and Super Divergence Blue Print
Good trading!
Christopher Smith
TheOptionClub.com
Friday, January 26, 2007
Credit Spread Trading and the Market Sell-Off
Yesterday was a bit ugly. This morning, the S&P 500 has opened up. What does this mean for our credit spread trade?
Nothing.
We're still well positioned with about 50 points between the market and our short strike. I did consider opening a call spread yesterday, concerned that further downside might eventually force an adjustment. If that happens, it would be nice to have some additional credit to work with. I will take another look at the call option chain later today.
Trade well!
Nothing.
We're still well positioned with about 50 points between the market and our short strike. I did consider opening a call spread yesterday, concerned that further downside might eventually force an adjustment. If that happens, it would be nice to have some additional credit to work with. I will take another look at the call option chain later today.
Trade well!
Thursday, January 25, 2007
Call Spreads - Option Premium Analysis
With a nice, robust gain yesterday I could not but help to take a look at the SPX option chain to see what was available in the way of call spreads. Premiums were thin and in order to get a decent credit, I would have to move closer to the market than I was comfortable.
Remember. The primary profit engine behind our credit spread strategy is time decay. Our goal is to sell spreads where we think the market is not likely to go. If all goes well, those spreads will erode in value and will be closed out, or expire, allowing us to keep our credit.
If you sell you spreads too close to the action, you're likely to spend some tense moments in front of your computer watching the index. It can be exciting, but this strategy favors the dull passage of time.
So, a call spread was not sold. With the market giving up some of yesterday's gains it is time to return to the porch swing and watch the grass grow, or the paint dry, or whatever... Just so long as our put spread stays safely away from the money.
Remember. The primary profit engine behind our credit spread strategy is time decay. Our goal is to sell spreads where we think the market is not likely to go. If all goes well, those spreads will erode in value and will be closed out, or expire, allowing us to keep our credit.
If you sell you spreads too close to the action, you're likely to spend some tense moments in front of your computer watching the index. It can be exciting, but this strategy favors the dull passage of time.
So, a call spread was not sold. With the market giving up some of yesterday's gains it is time to return to the porch swing and watch the grass grow, or the paint dry, or whatever... Just so long as our put spread stays safely away from the money.
Wednesday, January 24, 2007
Iron Condor Trading on the SPX
An iron condor is simply a combination of a bullish and a bearish credit spread. This week I sold a bullish put spread and the market immediately traded away from it, moving higher.
If I sell a call spread above the market, I will not increase my total risk because only one spread can lose money at any given time. My broker recognizes this and will margin both credit spreads as one trade; i.e., an iron condor.
That's not all. Because I receive a credit for both the call spread and the put spread, the combined credit further offsets my risk. I received .70 for the bull spread spread. If I were to sell a call spread for .50, my total credit would be $1.20. On a 10 point spread, that reduced my risk to $8.80. Of course, with the increased credit you'll also see additional profits!
A large index like the S&P 500 is especially well suited to trading iron condors because it is less prone to erratic moves. So, if I can sell both the call spread and the put spread I like to do so.
If I sell a call spread above the market, I will not increase my total risk because only one spread can lose money at any given time. My broker recognizes this and will margin both credit spreads as one trade; i.e., an iron condor.
That's not all. Because I receive a credit for both the call spread and the put spread, the combined credit further offsets my risk. I received .70 for the bull spread spread. If I were to sell a call spread for .50, my total credit would be $1.20. On a 10 point spread, that reduced my risk to $8.80. Of course, with the increased credit you'll also see additional profits!
A large index like the S&P 500 is especially well suited to trading iron condors because it is less prone to erratic moves. So, if I can sell both the call spread and the put spread I like to do so.
Tuesday, January 23, 2007
Stock Option Greeks and a Favorable Price Move
The SPX is trading higher today on positive earnings news. That's good for us because yesterday saw our bull put credit spread filled and the market is now moving away from our short option's strike price.
Now, the directional move will not, on its own, allow us to take the trade off. The reason is because the spread consists of a long and short position, both of which will be effected by the respective option's delta. We may see some profitability because the short option has a higher gamma than the long, protective put. Our real profits will come from theta decay and that just takes some time...
With continued upside in the market we will start looking for a call spread that can be sold for a decent credit. If we're successful in doing so, we will then be trading an iron condor. I'll follow up with more discussion about that in subsequent posts.
Good trading!
Now, the directional move will not, on its own, allow us to take the trade off. The reason is because the spread consists of a long and short position, both of which will be effected by the respective option's delta. We may see some profitability because the short option has a higher gamma than the long, protective put. Our real profits will come from theta decay and that just takes some time...
With continued upside in the market we will start looking for a call spread that can be sold for a decent credit. If we're successful in doing so, we will then be trading an iron condor. I'll follow up with more discussion about that in subsequent posts.
Good trading!
Monday, January 22, 2007
SPX Credit Spread Filled
Our SPX credit spread has been filled. We sold the 1,375 put and bought the 1,365 put for a .70 credit. This is a 10 point spread. The total risk is 10 - .70 = 9.30. The maximum return (before commissions) is about 7.5%.
The delta of the 1,375 contract was about .13, which means that there is approximately a 87% probability of the contract expiring out-of-the-money. We will not allow that contract to go in-the-money and will adjust or close the position before the market reaches the strike of our short put option.
Our goal now is 1.) to sit patiently and allow theta to erode the value of the spread while guarding against an adverse market move, and 2.) look for an opportunity to sell a call spread that meets our criteria. Right now the market does not offer a sufficient credit for a spread at any level we would be willing to sell. The S&P 500 will need to move to higher price levels to make it possible.
Our analysis of potential call spreads will follow in subsequent posts.
The delta of the 1,375 contract was about .13, which means that there is approximately a 87% probability of the contract expiring out-of-the-money. We will not allow that contract to go in-the-money and will adjust or close the position before the market reaches the strike of our short put option.
Our goal now is 1.) to sit patiently and allow theta to erode the value of the spread while guarding against an adverse market move, and 2.) look for an opportunity to sell a call spread that meets our criteria. Right now the market does not offer a sufficient credit for a spread at any level we would be willing to sell. The S&P 500 will need to move to higher price levels to make it possible.
Our analysis of potential call spreads will follow in subsequent posts.
Credit Spread and SPX Market Update
Friday saw the market rally after an initial sell-off. Volume expanded modestly on the NYSE, but the NASDAQ was showing signs of resistance among institutional buyers. Despite the rally, the week posted a loss.
The first full week of earnings season has been mixed. Positive earning surprises have outnumbered negative surprises by a ratio of about 1.5-to-1. During Q3 earnings season, positive earnings surprises outnumbered negative surprises by a ratio that exceeded 2-to-1. Earnings growth continues to rise, however it does appear to be slowing. Slowing earnings growth will eventually take a toll.
Looking at the chart suggested that the S&P 500 continues to trade within expected ranges and despite the softness we witnessed last week there was nothing to change our view of the current trend. This morning the markets have sold off, with the SPX now down about eight points. Our prior order should have filled as it is only about a dime away from the bid price, but it has just been sitting there.
With the market not touching the bull put spread order, I took the opportunity to re-examine the option chain. I did not want to shave anything off of the limit price because we are so close to what the market is asking and there is plenty of room for the market maker to make their day's wage. However, the sell-off today does allow me to move the spread a bit further away and still get a good credit.
My prior order has been cancelled and I've moved an additional five points away from the money. I'll shave a nickle or dime off of the asking price, which I am willing to do since I have additional cushion. That order is now open and at last check was within a nickle of the bid price.
The first full week of earnings season has been mixed. Positive earning surprises have outnumbered negative surprises by a ratio of about 1.5-to-1. During Q3 earnings season, positive earnings surprises outnumbered negative surprises by a ratio that exceeded 2-to-1. Earnings growth continues to rise, however it does appear to be slowing. Slowing earnings growth will eventually take a toll.
Looking at the chart suggested that the S&P 500 continues to trade within expected ranges and despite the softness we witnessed last week there was nothing to change our view of the current trend. This morning the markets have sold off, with the SPX now down about eight points. Our prior order should have filled as it is only about a dime away from the bid price, but it has just been sitting there.
With the market not touching the bull put spread order, I took the opportunity to re-examine the option chain. I did not want to shave anything off of the limit price because we are so close to what the market is asking and there is plenty of room for the market maker to make their day's wage. However, the sell-off today does allow me to move the spread a bit further away and still get a good credit.
My prior order has been cancelled and I've moved an additional five points away from the money. I'll shave a nickle or dime off of the asking price, which I am willing to do since I have additional cushion. That order is now open and at last check was within a nickle of the bid price.
Friday, January 19, 2007
SPX Bull Put Credit Spread Update
Well, no fill yesterday. This morning, the SPX was again in the red and my limit price was well below the mid point of the credit spread's combined bid/ask spread. Typically, I would expect to get filled on an SPX vertical spread once I am a dime or more below the mid-point.
The order remains open. Again, I'm cautious right now because of earnings being released. Apple, Inc., disappointed yesterday with their guidance and the stock tumbled taking the NASDAQ with it. It is off slightly again today. I do not want to get caught on the wrong side of a correction, especially if I settle for a cheap spread.
If I am not filled today, I'll review things over the weekend and post my thoughts here.
Good trading!
The order remains open. Again, I'm cautious right now because of earnings being released. Apple, Inc., disappointed yesterday with their guidance and the stock tumbled taking the NASDAQ with it. It is off slightly again today. I do not want to get caught on the wrong side of a correction, especially if I settle for a cheap spread.
If I am not filled today, I'll review things over the weekend and post my thoughts here.
Good trading!
Thursday, January 18, 2007
SPX Credit Spread Update
What you see above is a candle stick price chart of the S&P 500 from the Market Club service. I have been watching the index's price chart because the market is extended off of a recent pull-back to it's 50-day moving average and now seems ready to consolidate.
Yesterday, we had placed a limit order for a bull put, vertical credit spread. The limit price was at or below the quoted mid-price of the spread. That order was not filled, however. This morning, the market is again soft and our limit order is back on. At differing times this morning, the mid-price for the credit spread was well above our limit order price.
I am not chasing this trade by lowering the limit price on my order, although there is room for me to do so. The reason I do not want to reduce my limit price is because I believe that market may see some additional consolidation. The fact that earnings are being announced creates some additional uncertainty.
Patience is a virtue they say. I would much rather miss this trade and be sidelined this month, than jump into a trade out of frustration and find that the market continues to pull-back. In the meantime, the order is placed and I'll keep you posted.
Wednesday, January 17, 2007
Hunting an Iron Condor Options Trade for February
About midway through yesterday's trading day, I placed an order for the 1,370-1,380 bull put vertical credit spread. My limit order was placed at, or slightly above, the mark price in expectation that we might see some additional selling toward day's end. That selling did not materialize and the order was not filled.
With the market again soft today, I have renewed the order but shaved a dime off of the limit price. The mid-price on the spread has been trading at or slightly above my limit, so there is a chance for that order to fill. With earnings season around the corner, I am a little cautious and do not want to chase this trade by shaving anything more off of the order price.
The S&P 500 is consolidating, pulling back to its trend line and technical support. I have already identified the bear call spread I'm interested in opening but will wait to see if we get a bounce off of support. Once we see a decent up day I'll likely place the bear call spread order. If and when filled, that will complete the upper and lower wings of an iron condor position.
We will talk more about the position as it materializes and I will post updates here, so be sure to check back.
Good trading!
Christopher Smith
TheOptionClub.com
With the market again soft today, I have renewed the order but shaved a dime off of the limit price. The mid-price on the spread has been trading at or slightly above my limit, so there is a chance for that order to fill. With earnings season around the corner, I am a little cautious and do not want to chase this trade by shaving anything more off of the order price.
The S&P 500 is consolidating, pulling back to its trend line and technical support. I have already identified the bear call spread I'm interested in opening but will wait to see if we get a bounce off of support. Once we see a decent up day I'll likely place the bear call spread order. If and when filled, that will complete the upper and lower wings of an iron condor position.
We will talk more about the position as it materializes and I will post updates here, so be sure to check back.
Good trading!
Christopher Smith
TheOptionClub.com
Tuesday, January 16, 2007
Our First Credit Spread Option Trade for 2007
The New Year is off to a good start!
Today saw our first credit spread option trade on the SPX close out for a .10 debit. The trade was opened on December 29th for a .60 credit, leaving us with a net .50.
The spread was 10 points wide, so the total amount at risk was 10 - .60 = 9.40. Our net return is .50 / 9.40 = 5.3%. Considering that this trade was open a mere 18 days, that's not bad.
So we're now up over 5% year-to-date on our SPX trades. Considering that we're still in January and that the S&P 500 averages about 8% per annum, we are well ahead of the game.
This was not an accident or just "good luck", because there was a high probability of this being a successful trade from the moment it was opened. Once the credit spread was in place, we just left it alone until we could close it out for a modest profit.
If you are not familiar with credit spreads, or stock options for that matter, be sure to enroll in our free options trading mini-course. That mini-course will:
Oh, and right now you'll also receive our 2007 Stock Options Education Report. That report documents precisely what you need to do to master stock options, so you will not fall prey to high priced seminar promoters...
Good trading!
Christopher Smith
TheOptionClub.com
Today saw our first credit spread option trade on the SPX close out for a .10 debit. The trade was opened on December 29th for a .60 credit, leaving us with a net .50.
The spread was 10 points wide, so the total amount at risk was 10 - .60 = 9.40. Our net return is .50 / 9.40 = 5.3%. Considering that this trade was open a mere 18 days, that's not bad.
So we're now up over 5% year-to-date on our SPX trades. Considering that we're still in January and that the S&P 500 averages about 8% per annum, we are well ahead of the game.
This was not an accident or just "good luck", because there was a high probability of this being a successful trade from the moment it was opened. Once the credit spread was in place, we just left it alone until we could close it out for a modest profit.
If you are not familiar with credit spreads, or stock options for that matter, be sure to enroll in our free options trading mini-course. That mini-course will:
- Introduce you to stock options;
- Reveal why options are so important for your financial future;
- Explain what comprises the value of a stock option;
- Let you in on the secret to profiting regardless of market direction;
- Show you what a credit spread is and how to trade it; and
- Demonstrate how to explode credit spread results!
Oh, and right now you'll also receive our 2007 Stock Options Education Report. That report documents precisely what you need to do to master stock options, so you will not fall prey to high priced seminar promoters...
Good trading!
Christopher Smith
TheOptionClub.com
Monday, January 15, 2007
Credit Spread Trading on the SPX
At the present time, I am waiting to close my first SPX credit spread position for the 2007 calendar year. That position was opened before I started this blog, so I thought we might cover some basic concepts while we wait to jump into February positions.
The concept behind my trading on the SPX is to adopt high probability positions. To maintain positions with a high probability of being profitable, I want identify the prevailing trend of the market and favor that trend. The goal is not to predict where the market is headed, but simply to pay attention to where it seems to be going.
If I am successful at recognizing the direction in which the market is headed I then have the opportunity to sell options outside of its anticipated path. I will sell both put and call options, if the market conditions favor such sales.
Sell puts or calls carries certain risks. Those risks can be substantial and must be recognized and dealt with if you have any real expectation of being profitable over the long term. For this reasons I never sell options on the SPX without also simultaneously buying other options.
The result of my simultaneous purchase and sale is the creation of a vertical credit spread. These credit spreads may consist of calls or puts. If you would like to know more about credit spreads, be sure to enroll in our free option trading mini-course.
Christopher Smith
TheOptionClub.com
The concept behind my trading on the SPX is to adopt high probability positions. To maintain positions with a high probability of being profitable, I want identify the prevailing trend of the market and favor that trend. The goal is not to predict where the market is headed, but simply to pay attention to where it seems to be going.
If I am successful at recognizing the direction in which the market is headed I then have the opportunity to sell options outside of its anticipated path. I will sell both put and call options, if the market conditions favor such sales.
Sell puts or calls carries certain risks. Those risks can be substantial and must be recognized and dealt with if you have any real expectation of being profitable over the long term. For this reasons I never sell options on the SPX without also simultaneously buying other options.
The result of my simultaneous purchase and sale is the creation of a vertical credit spread. These credit spreads may consist of calls or puts. If you would like to know more about credit spreads, be sure to enroll in our free option trading mini-course.
Christopher Smith
TheOptionClub.com
Sunday, January 14, 2007
Iron Condor and Credit Spread Trading on the SPX
A recurring theme on our options trading discussion boards at TheOptionClub.com has been the topic of trading iron condor spreads and credit spreads on a major equity index such as the S&P 500. At various times over the past two years I have hosted a dedicated discussion board and have shared quarterly results of my personal trading. This year I plan to do something similar, here on Blogger.
At present, I maintain one open credit spread on the SPX cash index. The SPX tracks the S&P 500, which is commonly used as a bench mark for the health and vibrancy of the U.S. stock market. It is a weighted average, consisting of the 500 largest companies trading on U.S. exchanges. It's size, combined with the fact that many institutional traders utilize SPX options as market hedges, makes it an ideal choice for our particular style of trading.
I do not currently have specific parameters for this blog, but will allow it to develop on its own based upon feedback from readers. At a minimum, I hope this will be an exciting 12-month journey that brings both you and I new understandings and insights into how to minimize market risks in our portfolios, while achieving extraordinary profitability.
If you are not familiar with options trading, I encourage you to spend some time learning about these highly flexible financial tools. Their risk is over played, and with the proper education you can learn how to use them to actually limit risks in your accounts while also possibly enhancing profits from existing investments. There are a lot of companies that will offer to educate you, some are better than others.
To make your journey easier, I would like to offer you a free copy of the 2007 Stock Options Education Report. It will outline for you what you need to spend you time learning about and how to ferret out legitimate education providers from those others who will take your money but not satisfy your needs. Along with the guide, I will provide you with my stock options mini-course.
This should be fun! I'm looking forward to posting here over the next year and hope that you'll join me on a regular basis to share information, insights, and hard earned wisdom.
Christopher Smith
TheOptionClub.com
At present, I maintain one open credit spread on the SPX cash index. The SPX tracks the S&P 500, which is commonly used as a bench mark for the health and vibrancy of the U.S. stock market. It is a weighted average, consisting of the 500 largest companies trading on U.S. exchanges. It's size, combined with the fact that many institutional traders utilize SPX options as market hedges, makes it an ideal choice for our particular style of trading.
I do not currently have specific parameters for this blog, but will allow it to develop on its own based upon feedback from readers. At a minimum, I hope this will be an exciting 12-month journey that brings both you and I new understandings and insights into how to minimize market risks in our portfolios, while achieving extraordinary profitability.
If you are not familiar with options trading, I encourage you to spend some time learning about these highly flexible financial tools. Their risk is over played, and with the proper education you can learn how to use them to actually limit risks in your accounts while also possibly enhancing profits from existing investments. There are a lot of companies that will offer to educate you, some are better than others.
To make your journey easier, I would like to offer you a free copy of the 2007 Stock Options Education Report. It will outline for you what you need to spend you time learning about and how to ferret out legitimate education providers from those others who will take your money but not satisfy your needs. Along with the guide, I will provide you with my stock options mini-course.
This should be fun! I'm looking forward to posting here over the next year and hope that you'll join me on a regular basis to share information, insights, and hard earned wisdom.
Christopher Smith
TheOptionClub.com
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