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 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 [...]

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 [...]

Credit spreads are a very simple trade.

You sell one option, buy another for protection and hope that your sold option is not in the money on expiration day.

In other words you sell the 100 put and hope the stock stays above 100. Or sell the 150 Call and hope the stock stays below 150.

And since credit spreads have such a high probability of profit, most traders make money with them most of the time. But when they lose….. ouch. Credit spreads are not very forgiving when you lose.

I learned this firsthand. I had been trading credit spreads in Apple, FXI, and Google. Doing well for several months in a row. But then there was a drop, and all the gains I had made, plus a lot more was wiped out.

It takes a while to recover mentally from a loss like that. I was reminded of this event when a member emailed [...]

Part of the reason trading is so addictive and fun, is that you never know what a stock is going to do. I found a trade setup and thought we could make a game out of it. it’s called, What Will LVS Do?

Here’s a screenshot of a daily chart on LVS as of midday today. As you can see from the chart, LVS has been trading in a range the last couple months, but with the news today is moving towards the upper resistance level.

Click on the Image to Enlarge

So What Will LVS Do?

Will it hit resitance and drop back into the range, or will it break through and go higher?

If you pick correctly you get the amazing prize of knowing you picked correctly.

So please post your answer and your thinking as a comment, and maybe we can all learn together about how stocks move and [...]

The following is from a Barrons article by STEVEN M. SEARS

Butterfly Option Trade on Sprint

IF THE FEDERAL RESERVE can print money, so can you. All you need is a little cash, and a ton of nerve.

Consider Sprint Nextel (ticker: S). The $4 stock is a dog; it has declined 12% in the past three months, and yet trading volumes are surging, demonstrating that distressed equities – what institutional investors call penny stocks – are incredibly alluring in this market because of the potential to make double- or triple-digit returns on small price movements.

If you want to make a potential 500% return on one trade, Credit Suisse advised clients Tuesday to position for Sprint to move to $5 by January.

The bank told institutional clients to consider a “call fly” that entails buying January $4 calls and January $6 calls, and selling twice as many January $5 calls.

With the stock around $4, [...]

The following is from a Barrons article by STEVEN M. SEARS

A STRADDLE FOR GE

SHARES OF GENERAL ELECTRIC (ticker: GE) have been a disappointment for much of the 21st century.

The stock has lost half of its value in the past five years, and it’s gone nowhere in the past three months.

But there is a way to bring back that loving feeling for a stock that was a Wall Street darling under Jack Welch’s management during the 1990s.

All you have to do is use a simple options strategy to kick-start returns by taking advantage of unusual options pricing.

GE’s options implied volatility remains elevated even though the company recently reported third-quarter earnings. Normally, implied volatility, which is the most critical component of options pricing models as it deals with how likely a stock price is to change in the future, declines after earnings.

Yet, concerns about GE’s earnings power are so widespread, especially ahead [...]

Ok so GLD has continued to drift higher. It hit the upside breakeven of the calendar today and then pulled back a few cents. Time to add the adjustment. I added the 128 Oct/Nov Calendar in the same amount of contracts as the original. This doubled the amount of money in the trade.

Here’e the graph:

After Adjustment

 Notice the breakevens have moved to 123.61 and 129.59 on the upside.

The amount of money I have in the trade is now $2990 and so far I am down $85 since the trade has been opened. I am still looking to make 10-15% on the trade.

If GLD pulls back to 126 I will be sitting pretty. If it continues to advance I will make a move  when it gets to 129-129.50. And the adjustment I will make is to take off the first calendar – the 125 Oct/Nov. That will then reduce the amount [...]