This blog is about trading, so what better to post about than 2 new trades that I just entered.

The first is  simple one, a credit spread, and the second is a Calendar.

At first I only wanted to talk about the calendar, but as I started making the video I showed the credit spread as well.

This video starts by me updating the 2 credit spreads I showed to members last month. I then show the new credit spread trade I put on. And then I get into the calendar.

I discuss, the trade, a possible adjustment, why I chose the strike I did, and what I think the stock will do.

If an adjustment or an update is needed I will post it in the members’ area of the site.

Enjoy!

New to option trading?

Not sure what the difference is between a butterfly, a condor, or a mouse?

(Hint: there is no strategy called “mouse”)

In this video I open up one of my personal trading accounts to show you 4 trades that are all of a different strategy. We have a naked put in oil futures options, a butterfly in Berkshire Hathaway, an iron condor in LVS, and a straddle in LVS. All four trades are doing well.

Watch the video to see how they look on the risk graphs as well as how they are made up and work.

In the optiongenius portfolio we do not do naked puts or straddles, but we do a lot of iron condors and some butterflies. In times of low volatility with the VIX below 30 these non directional strategies work wonderfully. In high volatility markets, they can work as well but with adjustments and a [...]

Happy Thanksgiving!

Hope you have a wonderful, happy, and well rested holiday!

Here is an update of the MCD and JNJ butterfly trades I showed you in my last video. Had to make an adjustment to each because of the strong down move in the market which also affected these stocks.

This is a video of myself looking for some option trades using one of my real money accounts. These trades are for example only and I may exit or change them at any time without telling anyone.

This is a sample of the types of videos that are produced for Option Genius members which anyone can join from our homepage.

With the VIX above 40 I do not have too many trades on right now, and so I got bored and went looking for a speculative trade. I think I found one. With the SPX having trouble getting back above 1100, it makes it a good time to sell some weekly Calls. Actually I was thinking of selling Weekly Puts this morning, but the market came back all the way to 1100 but couldn’t break it.

So here is what I did:

Sell Oct1 11 1145 Calls and Buy Oct1 11 1150 Calls for a credit of .55 each

85% Probability of Profit. 12% Potential Return.

I don’t want to hold these all the way to expiration (Friday). I am expecting SPX to drop after failing to raise above 1100 and will exit the trade with a respectable profit. If SPX breaks above 1100 to about 1110, I will probably exit the trade as well [...]

Here is a trade I just put on in my personal account.

The stock is NLY. The trade is a simple Put credit spread

Sell to Open Oct 16 Puts (.40)

Buy To Open Oct 15 Puts (.26) for a credit of .14 cents per spread.

Trade has a 74% probability of success. And can make 16.2% if left to expiration.

NLY is a financial company but a very boring stock. I love owning this one as well because it pays a little over 10% dividend right now.

So here is how the trade works: If NLY is above 16 on expiration day (right now it is trading at 17.68) I make the whole 16.2% minus whatever commissions I paid to get into the trade. If NLY is below 16 and above 15 I will be assigned the stock if I don’t exit the trade. Again, I don’t mind owning this stock. if NLy is below [...]

Here’s a trade if you are brave enough:

S&P500 is down about 2.5% today. Sitting at 1145.

I am taking a stab at some weekly Puts.

Sell to Open SEP2 11 1070 Puts, Buy to Open SEP2 11 1065 Puts for a credit of .35 each

That equals roughly a 7.5% profit potential. These will stop trading Thursday at the close. The settlement price will be released Friday morning. Same as with regular SPX options.

As long as the SPX stays above 1070, this trade makes money. It has a 90% chance of doing so.

Will SPX drop 80 points in a couple days? Seems unlikely but who knows. Still, I like my chances.

Here is a trade I just put on in the personal account.

It’s an iron condor on Apple. It has a 77.43% Probability of profit with 22 days left to expiration.

Sell to Open June 355 Calls, But to Open June 360 Calls

Sell to Open June 310 Puts, Buy to Open June 305 Puts

For a credit of .63

For each contract you do, you get a credit of $63 which is the max gain on the trade. The max loss is $437. So the potential ROI is 14.41%.

My plan for this trade is to keep it super simple. Let it ride until expiration. Look at exiting when up 10% or more. If I get down 15% or so I am going to exit. This is a small position and one I put on because my wife made me. I am teaching her how to trade options and she is coming up with her own [...]

I just exited the MCD butterfly I posted on the blog on 3/25.

I exited with a credit of 3.10.

I originally paid 3.11 for the trade so I lost .01 on 2 spreads or $2 plus commissions.

There is still 10 days left to expiration and MCD has not hit the expiration day break even yet, so according to the trading plan for the trade, I should have stayed in. But it feels like MCD will move higher and I wanted to get out before I started losing more money. For the 7 trading days I was in the trade, 5 days were up days.

There seems to be some resistance at 77 so the trade might still make money. Since I know that people have read it on the blog and might be following the trade, I decided to just exit here.

With the stock seemingly trading in a 73 – 77 range this one [...]

Just added a new trade in my personal portfolio today.

It’s a classic butterfly spread on MCD – McDonald’s.

The trade was Buy 2 April 70 puts, Sell 4 April 75 Puts, Buy 2 April 80 Puts for a debit of 3.11 per spread or a total cost of $622.

It’s a cheap trade that will make money if MCD stays between 73.12 and 76.92.

Here’s the graph:

The trade has a 48% probaility of profit at expiration. But I dont want to stay until expiration. I want to make 10-20% and get out within 2 weeks. This will happen if MCD stays where it is, or if the volatility in MCD options goes down.

With the end of the quarter coming up next week I am expecting the markets to go strong and higher into April. That will result in a drop in volatility and hopefully a quick profit.

If this trades needs an [...]