Today, I have the third video in a three-video series about building an investment portfolio.
It covers a concept called "filtering." This is a technique that is not often discussed, but it can really help zero in on strong investment returns.
The concepts reviewed have application for the stock market, as well as the futures and foreign currency markets. There is no cost for the video and no need to register.
Just click, view and enjoy...
Trade well!
Christopher Smith
TheOptionClub.com
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Sunday, December 23, 2007
Tuesday, December 18, 2007
Profits Of 18% In December?
We have seen a very difficult market for both traders and investors. The current market conditions have been highlighted by increased volatility. It has not been uncommon for us to see the Dow Jones Industrial Average up 100 points one day, and down a couple hundred in next.
Volatility can be an option traders best ally, however. That is precisely what allowed me to generate more than 18% and profits for the December expiration. Yesterday, I closed my December iron Condor and acting in a nice profit after watching the index thrash within its trading range.
Back on November 23 I opened a bear call spread at the $830 strike for credit of $.95. a few days later the market had sold off, allowing me to sell a bull put spread at the $660 strike for a credit on $.70. The Russell 2000 was then trading at 748, giving me a significant cushion on both the call and the put side of the trade. From that point forward I did nothing, but watch the market gyrations.
Yesterday, I began buying back the position and exited for a net debit of $.10. This left me with a profit or dollar 55 on a 10 point spread, with a maximum risk of $8.35. A profit of $1.55 on risk of $8.35 translates into an approximate return of 18.5%. What made this trade especially sweet was the fact that it required very little in the way of monitoring or managing during a period of time that many market participants were struggling.
What this demonstrates is that as and options trader you are able to take you to the attention of any market condition and turn it to your advantage. So, rather than fighting the market you find yourself in a position of simply identifying current conditions and adapting to them.
Good trading!
Christopher Smith
TheOptionClub.com
Volatility can be an option traders best ally, however. That is precisely what allowed me to generate more than 18% and profits for the December expiration. Yesterday, I closed my December iron Condor and acting in a nice profit after watching the index thrash within its trading range.
Back on November 23 I opened a bear call spread at the $830 strike for credit of $.95. a few days later the market had sold off, allowing me to sell a bull put spread at the $660 strike for a credit on $.70. The Russell 2000 was then trading at 748, giving me a significant cushion on both the call and the put side of the trade. From that point forward I did nothing, but watch the market gyrations.
Yesterday, I began buying back the position and exited for a net debit of $.10. This left me with a profit or dollar 55 on a 10 point spread, with a maximum risk of $8.35. A profit of $1.55 on risk of $8.35 translates into an approximate return of 18.5%. What made this trade especially sweet was the fact that it required very little in the way of monitoring or managing during a period of time that many market participants were struggling.
What this demonstrates is that as and options trader you are able to take you to the attention of any market condition and turn it to your advantage. So, rather than fighting the market you find yourself in a position of simply identifying current conditions and adapting to them.
Good trading!
Christopher Smith
TheOptionClub.com
Thursday, December 13, 2007
Trading From The "Hard Right Edge"
One of the most challenging aspects of trading is to get your mind around "the hard right edge" - the unknown future that lies to the right of any chart.
It's one thing to go back and examine a particular chart's history and show how a trading method worked...
...but it's altogether different to examine the "current bar", or the current day, make a trading decision and then see what happens the next day.
That's why I am sharing this brand new "play-by-play" trading video that shows you the decision-making process a trader goes through each day, using a specific trading method that leaves nothing to chance.
The video is somewhat unique because it was recorded in daily segments, as the trade was playing out so you can get a real feel for the on-the-spot observations and decisions he makes each day...
...and it's all done without knowing what's beyond 'the hard right edge'.
This is a recent trade for the USD /CAD Forex pair... and it's still an OPEN TRADE, so watch it carefully and see what happens here:
When you're watching the video, notice how 'the hard right edge' doesn't bother this trader at all, and then imagine what it would feel like to trade with 100 percent confidence every time.
It's a pretty awesome feeling. Trust me.
I hope you enjoy this play-by-play video.
Trade well!
Christopher Smith
TheOptionClub.com
P.S. Did you know that it is now possible to trade the FOREX market using options? It is and I'm going to be talking more about it. I'll follow up with new content of Forex options and what it means for you.
It's one thing to go back and examine a particular chart's history and show how a trading method worked...
...but it's altogether different to examine the "current bar", or the current day, make a trading decision and then see what happens the next day.
That's why I am sharing this brand new "play-by-play" trading video that shows you the decision-making process a trader goes through each day, using a specific trading method that leaves nothing to chance.
The video is somewhat unique because it was recorded in daily segments, as the trade was playing out so you can get a real feel for the on-the-spot observations and decisions he makes each day...
...and it's all done without knowing what's beyond 'the hard right edge'.
This is a recent trade for the USD /CAD Forex pair... and it's still an OPEN TRADE, so watch it carefully and see what happens here:
When you're watching the video, notice how 'the hard right edge' doesn't bother this trader at all, and then imagine what it would feel like to trade with 100 percent confidence every time.
It's a pretty awesome feeling. Trust me.
I hope you enjoy this play-by-play video.
Trade well!
Christopher Smith
TheOptionClub.com
P.S. Did you know that it is now possible to trade the FOREX market using options? It is and I'm going to be talking more about it. I'll follow up with new content of Forex options and what it means for you.
Monday, December 10, 2007
Portfolio Diversification Explained
Let's talk a little bit about portfolio diversification.
Too often we find ourselves opening multiple positions within our portfolio, all of which tend to rise and fall with the stock market. When the market is safely trending upward, we feel confident and secure in the construction of our portfolio. However, a marker correction, such as that we are experiencing, can shake our confidence as we watch our account equity shrink with falling stock prices.
One of the concepts then we will want to incorporate into our financial planning is that of a portfolio diversification. This comes in many forms, but generally requires diversification among both markets and individual market sectors.
Utilize the link above to access a recent video on the subject of portfolio diversification. This video is the first in a series and I will follow-up with subsequent videos here on my blog.
Trade well!
Christopher Smith
TheOptionClub.com
Too often we find ourselves opening multiple positions within our portfolio, all of which tend to rise and fall with the stock market. When the market is safely trending upward, we feel confident and secure in the construction of our portfolio. However, a marker correction, such as that we are experiencing, can shake our confidence as we watch our account equity shrink with falling stock prices.
One of the concepts then we will want to incorporate into our financial planning is that of a portfolio diversification. This comes in many forms, but generally requires diversification among both markets and individual market sectors.
Utilize the link above to access a recent video on the subject of portfolio diversification. This video is the first in a series and I will follow-up with subsequent videos here on my blog.
Trade well!
Christopher Smith
TheOptionClub.com
Tuesday, December 4, 2007
Discover How You Can Avoid Trading Troubling Stock Market Corrections And Turbulent Consolidations, But Still Profit From Sustained Trends...
Over the last several months I have begun developing an interest in FOREX, and more specifically in FX options.
What is FOREX? What are FX options?
FOREX is the Foreign Exchange Currency market and an FX option is an option on a particular currency where the owner has the right, but not the obligation, to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date.
Very similar to equity options, right?
Several months ago I shared with you an extensive report issued by one of my trading mentors. He made the report available at no cost to anyone who wanted it. That report has now been updated.
This brand new December, 2007, update to the Forex report has just been released. The prior version challenged most everything that 90% of Forex traders hold to be true.
The idea behind the original report was to help you discover how to ride the "coat tails" of the big banks to maximize your "pip potential." If you already saw the first version, you already know what I am talking about, but wait until you see the new one...
HERE'S THE BACKGROUND ON THE REPORT
Bill Poulos is the trader who put this 77-page monster together after surveying over 50,000 traders to find out what their biggest concerns, questions, and challenges were around Forex trading.
And then he spilled the beans on the cold, hard reality of the Forex markets - to our benefit.
Here's why...
Not only does he reveal his answers to the top 20+ questions his readers asked him, but he tackles head-on and completely obliterates the confusion that seems to plague most Forex traders.
WHAT THIS REPORT IS ALL ABOUT...
Bill also shared how the he, and his students, spend just 20 minutes a day with TOTAL confidence in the Forex markets, identifying more pip potential in that time than most other traders who spend hours trying to trade their favorite Forex pairs.
You'll also learn:
** How to "shake out" the good Forex brokers from the unscrupulous ones. Many brokers won't be prepared when you ask
them these 5 questions (page 12).
** His "insiders formula" on how to determine the best mix of technical indicators to use when trading Forex pairs (page 23).
** Step-by-step tactics for applying his "Optimal Profit Exit Strategy". This is one of his favorite ways to enjoy profit-taking as quickly as possible (page 33).
** How he was able to drastically reduce his "time in the trenches" trading Forex by spending only 20 minutes a day. These 2 discoveries made it all possible (page 54).
** ...plus, there's a TON more you'll get to sink your teeth into when you get the report.
WHY HE'S GIVING IT ALL AWAY
I was provided with a preview copy of the original report, I thought for sure I'd see it for sale online in a few days. In fact, I thought it would sell very well.
That was not Bill's motivation, however. He wanted to de-mystify the Forex markets. There are too many myths, too many inaccuracies, and far too much misinformation out there.
As an educator, this only made his job more difficult.
Hey, it couldn't be easier! To get your copy, just visit this web page right now:
By the way, you also have the author's permission to give away copies of this report to anyone you think needs some help with their Forex trading. Even if you have a friend that has an interest in the subject, I would shoot them a copy, as well.
I hope you enjoy it as much as I have.
Good Trading,
Christopher Smith
TheOptionClub.com
P.S. This is a HUGE report. Take your time and read it all, but my advice is to download it quickly because it could be taken offline if the web server "bandwidth" is overused.
What is FOREX? What are FX options?
FOREX is the Foreign Exchange Currency market and an FX option is an option on a particular currency where the owner has the right, but not the obligation, to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date.
Very similar to equity options, right?
Several months ago I shared with you an extensive report issued by one of my trading mentors. He made the report available at no cost to anyone who wanted it. That report has now been updated.
This brand new December, 2007, update to the Forex report has just been released. The prior version challenged most everything that 90% of Forex traders hold to be true.
The idea behind the original report was to help you discover how to ride the "coat tails" of the big banks to maximize your "pip potential." If you already saw the first version, you already know what I am talking about, but wait until you see the new one...
HERE'S THE BACKGROUND ON THE REPORT
Bill Poulos is the trader who put this 77-page monster together after surveying over 50,000 traders to find out what their biggest concerns, questions, and challenges were around Forex trading.
And then he spilled the beans on the cold, hard reality of the Forex markets - to our benefit.
Here's why...
Not only does he reveal his answers to the top 20+ questions his readers asked him, but he tackles head-on and completely obliterates the confusion that seems to plague most Forex traders.
WHAT THIS REPORT IS ALL ABOUT...
Bill also shared how the he, and his students, spend just 20 minutes a day with TOTAL confidence in the Forex markets, identifying more pip potential in that time than most other traders who spend hours trying to trade their favorite Forex pairs.
You'll also learn:
** How to "shake out" the good Forex brokers from the unscrupulous ones. Many brokers won't be prepared when you ask
them these 5 questions (page 12).
** His "insiders formula" on how to determine the best mix of technical indicators to use when trading Forex pairs (page 23).
** Step-by-step tactics for applying his "Optimal Profit Exit Strategy". This is one of his favorite ways to enjoy profit-taking as quickly as possible (page 33).
** How he was able to drastically reduce his "time in the trenches" trading Forex by spending only 20 minutes a day. These 2 discoveries made it all possible (page 54).
** ...plus, there's a TON more you'll get to sink your teeth into when you get the report.
WHY HE'S GIVING IT ALL AWAY
I was provided with a preview copy of the original report, I thought for sure I'd see it for sale online in a few days. In fact, I thought it would sell very well.
That was not Bill's motivation, however. He wanted to de-mystify the Forex markets. There are too many myths, too many inaccuracies, and far too much misinformation out there.
As an educator, this only made his job more difficult.
HOW TO GET YOUR COPY
Hey, it couldn't be easier! To get your copy, just visit this web page right now:
By the way, you also have the author's permission to give away copies of this report to anyone you think needs some help with their Forex trading. Even if you have a friend that has an interest in the subject, I would shoot them a copy, as well.
I hope you enjoy it as much as I have.
Good Trading,
Christopher Smith
TheOptionClub.com
P.S. This is a HUGE report. Take your time and read it all, but my advice is to download it quickly because it could be taken offline if the web server "bandwidth" is overused.
Sunday, December 2, 2007
My Options University Strategist Experience, to Date
Last month, I had been fairly excited about the Option University Strategist trading service. It launched to the public last month, but they had actually started trading in October for a select group of "in-house" clients.
Now that I am almost a month into this, my enthusiasm still remains pretty high. I thought I would show you a couple trades that are now closed, just to give you an idea of what you might find as a subscriber.
The first trade that I will share with you is one that was open on the SPYder, an the ETF fund that approximates the S&P 500 index. The trade was opened October 10, 2007. This was the day before the index hit its recent peak, just prior to this latest round of selling.
The Strategist service recommended the purchase of 10 November $159 put options. With the underlying at about $156 per share, a stop was placed at $157.70, with a profit target setat $151 per share. These put options cost $4.25, so the cost to enter the trade buying 10 contracts was $4250.
The position was closed on October 24, 2007. The profit target had been reached and the puts were sold for $9 dollars per contract, or $9,000 in gross proceeds. This translated into about 111% return on capital. Not bad for two weeks ork!
Another trade during the month of October was on BRCM, consisting of a long strangle. The position was opened on October 8, 2007 with the purchase of the October $37.50 call option and the October $35.00 dollar put option. Earnings were scheduled for October 19, 2007. Implied volatility was low, allowing for an inexpensive entry, and a triangle pattern was present.
On October 19, 2007, the long call expired worthless. However, on October 11, 2007, the put option was sold for substantial profit producing little over 120% profit on the trade.
These are just two of many trades that have been identified by the traders at Options University. finding and planning trades such as this, picks a fair bit of skill and quite a bit of time. I know, because I've done it.
What options University strategist provides is an alternative, whereby professional traders will do the "grunt work" for you and issue to trade for your consideration. If it looks good do you and fits your particular needs, you need only place you're with your options broker.
You may find that the number of contracts being traded by the service may be too few, for too many, for your portfolio. I don't see any reason why most of these trades cannot be sized up or down. In other words, once receive a recommendation it is always your prerogative to decide how best to apply the recommendation in the context of your individual trading plan. If your plan calls for a maximum risk of no more than $1000, you might not trade and contracts but simply limit your position to one or two contracts.
Tomorrow's a start of a new month, so it is time to reflect back on your recent trades and determine how you have fared. If you find that you are in need of some assistance, you might want to consider enlisting these services of the traders at Options University.
Trade well!
Christopher Smith
TheOptionClub.com
Now that I am almost a month into this, my enthusiasm still remains pretty high. I thought I would show you a couple trades that are now closed, just to give you an idea of what you might find as a subscriber.
Generating More Than 100% Returns on the SPYder
The first trade that I will share with you is one that was open on the SPYder, an the ETF fund that approximates the S&P 500 index. The trade was opened October 10, 2007. This was the day before the index hit its recent peak, just prior to this latest round of selling.
The Strategist service recommended the purchase of 10 November $159 put options. With the underlying at about $156 per share, a stop was placed at $157.70, with a profit target setat $151 per share. These put options cost $4.25, so the cost to enter the trade buying 10 contracts was $4250.
The position was closed on October 24, 2007. The profit target had been reached and the puts were sold for $9 dollars per contract, or $9,000 in gross proceeds. This translated into about 111% return on capital. Not bad for two weeks ork!
Grabbing Over 120% In Three Days
Another trade during the month of October was on BRCM, consisting of a long strangle. The position was opened on October 8, 2007 with the purchase of the October $37.50 call option and the October $35.00 dollar put option. Earnings were scheduled for October 19, 2007. Implied volatility was low, allowing for an inexpensive entry, and a triangle pattern was present.
On October 19, 2007, the long call expired worthless. However, on October 11, 2007, the put option was sold for substantial profit producing little over 120% profit on the trade.
These are just two of many trades that have been identified by the traders at Options University. finding and planning trades such as this, picks a fair bit of skill and quite a bit of time. I know, because I've done it.
What options University strategist provides is an alternative, whereby professional traders will do the "grunt work" for you and issue to trade for your consideration. If it looks good do you and fits your particular needs, you need only place you're with your options broker.
Modifying Trade Recommendations for Your Portfolio
You may find that the number of contracts being traded by the service may be too few, for too many, for your portfolio. I don't see any reason why most of these trades cannot be sized up or down. In other words, once receive a recommendation it is always your prerogative to decide how best to apply the recommendation in the context of your individual trading plan. If your plan calls for a maximum risk of no more than $1000, you might not trade and contracts but simply limit your position to one or two contracts.
Tomorrow's a start of a new month, so it is time to reflect back on your recent trades and determine how you have fared. If you find that you are in need of some assistance, you might want to consider enlisting these services of the traders at Options University.
Trade well!
Christopher Smith
TheOptionClub.com
Saturday, December 1, 2007
Market Update for the Week Ending November 30, 2007
The best thing that we can say about this week is that we are off to our recent lows. Equities rallied on Friday morning, but gave up some of their early gains. The NASDAQ action closed lower for the day, producing a distribution day on increased volume.
However, the other major indices all closed higher. The recent buying has been fueled by growing expectations of a Fed rate cut. Yesterday, we also saw oil prices fall further from their highs. It is not all rosy out there, as we have continued concerns regarding the housing market and credit markets. Consumer confidence has been staggered. I have seen mention in a few places about possible recession.
All of this creates a great deal of uncertainty. There are some bright spots, with leading stocks showing some resiliency admits all the selling. When markets are trending the ability to pick strong stocks is not always necessary to make money, as most science will tend to rise with the overall market. These consolidations will typically batter the weaker companies, pushing stock prices lower.
You can take a look at leading companies such as Intuitive Surgic and Apple Inc., and you'll see how they have maintained an upward trend despite the recent correction. Paying attention to the trend in the stock's behavior, or that of an index, it's critically important if you hope to stay profitable during these difficult market transitions.
If you need some help assessing the trend of a particular security, I would encourage you to take advantage of of the complementary trend assessment service provided by the guys at Market Club. This free service also makes for nice second opinion before jumping in.
Trade well!
Christopher Smith
TheOptionClub.com
However, the other major indices all closed higher. The recent buying has been fueled by growing expectations of a Fed rate cut. Yesterday, we also saw oil prices fall further from their highs. It is not all rosy out there, as we have continued concerns regarding the housing market and credit markets. Consumer confidence has been staggered. I have seen mention in a few places about possible recession.
All of this creates a great deal of uncertainty. There are some bright spots, with leading stocks showing some resiliency admits all the selling. When markets are trending the ability to pick strong stocks is not always necessary to make money, as most science will tend to rise with the overall market. These consolidations will typically batter the weaker companies, pushing stock prices lower.
You can take a look at leading companies such as Intuitive Surgic and Apple Inc., and you'll see how they have maintained an upward trend despite the recent correction. Paying attention to the trend in the stock's behavior, or that of an index, it's critically important if you hope to stay profitable during these difficult market transitions.
If you need some help assessing the trend of a particular security, I would encourage you to take advantage of of the complementary trend assessment service provided by the guys at Market Club. This free service also makes for nice second opinion before jumping in.
Trade well!
Christopher Smith
TheOptionClub.com
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