Online Stock Option Trading: What Will 2011 Bring?

Stock option strategies

Happy Holidays!

Just wanted to wish you the best and happiest holiday season.

I hope that you had a great 2010 and I pray that 2011 brings you closer to all that you desire.

2010 was a crazy year for the stock market. Nonstop ups and downs – kinda like a roller coaster at Six Flags.

The S&P is up over 6% in just December alone – and we aren’t even done yet!

But what will 2011 bring?

I would be lying if I told you I knew. No one knows. The TV, radio, and magazines are filled with “pundits” giving their predictions on how high the markets will go next year. But they have no clue. They couldn’t predict with any accuracy what the market will close at on Jan 1, much less Dec 31.

Options Trading: 2011 Stock Market

But I like guessing games so I will make some guesses too – based on what I see.

#1 I agree with the 60 minutes report that the next big crisis will be the state and local governments going broke. They are going to need money from somewhere and it will probably be the FED buying municipal bonds. Otherwise we will be paying a lot more in taxes to our local governments and be getting a lot more speeding tickets.

#2 The markets will close higher next year. Why? Because the recovery is already here. All the business owners I am taking to – except those in real estate – are saying that sales and traffic is picking up. A perfume retailer told me this year will be his best year ever in 20 years. A woman who runs a Bridal convention says she sold out of all her booths way in advance of the show. A software developer friend has enough work to back him up for months and he cannot find people qualified to hire fast enough. Sure these are isolated stories and there are parts of the country still hurting, but things do seem to be getting better.

#3 Inflation is here and will be more evident in 2011. And this is another reason the markets will be going higher. Oil, gasoline, food, clothes and more will all cost more in 2011. Three reasons – once is the monetary policy. Two is an increase in demand. And three is a reduction in discounts. Don’t look for the sales of this year next year. There will be fewer sales and the discounts will be much lower. So you might want to stock up now.

#4 But the markets themselves will be much calmer. I believe it will be a great year for option sellers. There is less uncertainty in the markets and it look like things will go back to normal.

Am I right or wrong? It will take a year to find out. But let me know your thoughts below. Also, please  go check our option trading blog for useful stock option trading strategies and investing tips and follow us on Twitter to get more option selling updates.


  1. Hugh on December 23, 2010 at 2:12 pm

    Hi Allen,

    First, many thanks for your wisdom and contributions to those of us still trying to “get it”. You mention many times on your web site about remaining patient and how the process of learning to effectively and consistently sell options profitably takes time. I first started corresponding with you this past June and have found this to be very true.

    Second, many wishes of blessings and good tidings to you, your family, and friends during our Christmas season, as well as the rest of the year.

    Are the markets going higher this year? Who am I, the student to question someone who has such a grasp of our financial markets?

    Call me a permabear, but my concerns are:

    Our federal government seems clueless regarding their debt and the way they seem to think they can print their way out of it. Is it really possible that China and Russia come up with a new reserve currency? If this comes to pass, I would have to think we would then experience hyper-inflation.

    In the meantime, our banks continue to hold an unprecedented amount of real-estate through foreclosures and if the numbers are correct, we are going to peek at twice the 2008 peak in mortgage resets late 2011. Can our economy sustain another blow without imploding?

    I agree, our next crisis will most likely involve the finances of the state and local governments. But, in my opinion, this is not the problem, but a symptom of a bigger problem, again government debt.

    I’m glad to see someone so dialed in to our financial markets feeling optimistic. I keep asking myself, is it as bad as I think it is, or am I just getting old and grouchy? Hopefully the latter.

    At any rate, all the best to you and your subscribers as we continue to play the game.

  2. David on December 23, 2010 at 2:34 pm

    I am also convinced that the markets head higher in 2011. The fed will make sure the markets go higher by printing more dollars. This is what makes investors feel good ’cause when they see market gains they feel wealthy enough to spend money and this was the goal for the fed. So far, its sucessful. I was bearish through the past year and gotten hurt with bear call spreads and have been frustrated by the market manipulation but if you can’t beat ’em……. So, I’ll be looking to for a decent sell off, if we get it, to get into some bullish trades. Good luck and a merry Christmas to you all.

  3. Tom Plaskett on December 23, 2010 at 2:37 pm

    Please, all, keep in mind that this is pretty much a game like Allen said. The mega companies and sleaze ball attorneys that are employed and the money grubbing politicians get together and make it a given that a group of small investors are going to be their targets and they will do and say whatever they need to make that come true.Their targets (us) don’t even see it coming half of the time. They make us lose our money, our lives, our integrity, and our peace with the world. Well, hell no, I am not going to put up with it and will balk at any attempt to take me over like robot. You all better do the same or you will be like a lot of lemmings walking off the cliffs to their death. Take a stance and keep it. Do you all hear me…down with social and economic slavery. Tom Plaskett

  4. William Lenard on December 24, 2010 at 3:01 pm

    Greetings to all. The ‘sinister and the dexter’ alike. The dexter will become influenced by their protestations of wanting time off for the holidays and actually get at least some of the message of Christmas, they will set aside a small part of their greed and realize the imperitive of the Christmas message : WE ARE OUR BROTHERS KEEPER. The sinister will become appreciated for their values and peace will begin to prevail. Well, not likely but let us hope.

  5. MIKE LOOS on December 27, 2010 at 1:13 pm

    Option Selling does make alot of sense. We are all trying to make a living. We all know how to put on trades.
    I suggest that regardless of what the pundits do or say,
    it is up to each of us to go with the flow… be it double
    calenders, iron Condors or just plain verticle spreads.
    We can all adjust to the times & keep the contract alocation with-in our risk tolorance.Good luck to all
    this next year. Thanks Allen.

  6. Steve on January 6, 2011 at 11:36 am

    Dear Mr. Genius,

    I was looking at your past performance record (see below), and while I am not a math genius, this does not seem to add up.

    52 + 16 + 2 = 70

    Yet you are saying you only had 66 trades. What is up with that? I think your percentages are off as well, if in fact you had 70 trades.


    Since I started this website in April 2009, I have made 66 Trades.

    52 trades (74.29% of all trades) have been profitable,

    16 trades (22.86% of all trades) have been losers, and

    2 trades (2.86% of all trades) broke even.

  7. Steve on January 8, 2011 at 2:10 pm

    Well, I guess your percentages are okay. But you need to change that trades number from 66 to 70.

    • Genius on January 11, 2011 at 6:09 pm

      thanks Steve, I will take a look at that.

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