The Option Alpha Podcast

Show notes: http://optionalpha.com/show106

As some point or another new option traders worry about their option contracts being assigned. Namely short call options getting short stock assignment. But it's never as bad or horrifying as it may seem and in today's latest show I want to walk through our TLT iron butterfly trade in which we ended up getting assigned 200 shares of short stock just days before expiration.

Show notes: http://optionalpha.com/show105

The further the markets continue to run higher, the greater the risk that another major market correction or market crash will happen in the near future. After all, as we pointed out in Show #15, the stock market has fallen 9 times at least 30% which is once every 10 years. Right now we're riding a 10-year bull rally that's losing steam fast. So, how do you protect your portfolio in a down market? That's the question and today's show will give you the answer.

Show notes: http://optionalpha.com/show104

On today's newest podcast I want to turn the conversation a bit and focus on pairs trading with options. And this isn't the traditional pairs trading that you might have heard about before where you short one stock and buy another related stock to profit from any trending differences or divergences in the underlying price. Instead, I want to talk about how you can use some very basic portfolio and stock beta concepts to make smarter, more efficient decisions about which securities you use for options trading. Moreover, I want to give you the knowledge to feel comfortable taking directional trades so long as you know how to create "paired trades" that still give you an overall neutral stance relative to some benchmark index. This show is a little more advanced but I think you'll find it helpful.

Show notes: http://optionalpha.com/show103

Even after discussing and outlining the general process for how to pick the right stock options strategy in previous podcast and videos, I continue to get members who are confused how it should work and the steps one might take. I ultimately believe that in most cases you might be over-thinking it especially when it comes to choosing tickers and market direction.

Today's podcast should help clear the air while also giving you concrete examples using a simple Iron Condor strategy. Finally, we'll talk in-depth about the new requirement to have a dynamic approach to your trading via our Trade Optimization Software to tweak and perfect your entries.

Show notes: http://optionalpha.com/show102

When selling options, often I get a question or inquiry from members of our community with regard to how far out of the money we should sell our options and set our positions. Now, I typically target around the 70% probability of success area for my short option selling trades, but others have often wondered that if given the choice why we don't just sell options at the 90% probability of success level? I mean if 70% is good, 90% has to be better right?

Well, it's clearly not that easy. As you go further and further out of the money selling options, the premiums you receive erode quickly. This begs the question, are you selling options too cheap or do you actually need to take more risk and come a little close in when selling? In today's show we'll dive deep into this question and present two different case studies which might help shed light on the topic. 

Show notes: http://optionalpha.com/show101

I believe that on some level every new trader dreams of trading options full time and not working a regular job. The reality is however, that you're need a lot of capital before you make the leap to full time trading and that means you'll have to learn how to effectively trading options while working your day job. Hard as it may seem at first, working full time and trading options is not that complicated nor is it impossible if you're smart about your time and the strategies you focus on. In today's show I want to cover 10 questions that our community members asked with my answers as to how I suggest working options trading into your busy work schedule. Note also that I also work a full time job as a stay at home dad to two little girls while running our massive community of 60,000+ traders. I've also had to learn to be incredibly efficient with my time actually making trades just like you.

Show notes: http://optionalpha.com/show100

Not only is today special because we're releasing our newest research report called The Profit Matrix but also because as soon as this show goes live we'll have crossed more than 1,000,000 downloads on the podcast. Crazy coincidence but it's true and very humbling, so thank you to all of you who have supported and listened over the last couple years. In this special show, we're going to talk in-depth about our new game-changing research report in which we analyzed and compiled results from more than 21 million backtested options strategies. Plus, I'll answer the biggest question that came out of this body of work on how we should (or shouldn't) change the way we trade options in the future.

Show notes: http://optionalpha.com/show99

The investing world in the next 5-10 years is going to look dramatically different. In fact, the shift to automated trading is already happening at the highest levels and with the biggest hedge funds. So, why is this happening? Why can't we just ignore it? And what can we do now to position ourselves to take advantage of automated trading systems now? Today's show is very high level but I think you'll enjoy the topic but it's a big wave of change that's coming our way and if you don't recognize the shift happening now you'll get washed up on the shore.

Show notes: http://optionalpha.com/show98

The markets are evolving faster and faster as the introduction and use of computer-driven or data-driven trading systems start to hit exponential growth rates. So, the question becomes, is this the end of systematic risk and market uncertainty? To put it bluntly, no - in fact, never will we reach a point at which there isn't some sort of systematic risk that we have to price into our options trading. And these future expectancy models are where the opportunity will be. I believe that markets will eventually become flatter and more volatile which means that the traders and investors who can harness these sideways markets will ultimately outperform everyone else. Those who can manage risk, not eliminate it, through the use of data-driven software tools and technology will be the ones left standing and in today's show, I want to dive deeper into these higher level concepts you need to recognize.

Show notes: http://optionalpha.com/show97

Today we're going to use our new Trader's Toolbox and options backtesting software to test win rates when selling options. Because the truth is many people have this huge "rub" with options trading and expected vs. actual win rates. They assume that if we place a new trade with an initial probability of success of 70% that the trade will win at exactly 70% over the long-term. As you'll see today, that's just not the case when you account for the implied volatility premium inherent in the options market. So tune in as we look at two different SPY short strangle backtests.