Is selling options before earning Good Strategy?

[Kim Klaiman]

It is disingenuous to state "helping", when they charge 20%+ fee.

Even "providing education" is dubious, when that teaching involves scalping volatility as free lunch (vega gains as they call it) in $10k account (really 6k account, since they have 40% cash).

"If you repeat a lie often enough, people will believe it, and you will even come to believe it yourself." - Joseph Goebbels

Our members have around 40-50k portfolios on average. 1,250/year translates to 2.5-3% of the portfolio size. Nowhere near 20%. If someone makes even half of our official performance (30-40%/year), he would gladly pay 3%.

But most of our members see the subscription fee as their tuition, not as percentage of their portfolios.

 

[srinir]

I thought, I was on your ignore list.

That quote is pretty apt to you and your services. All this started with your "verified" claim. Verified means usually from reputed third party organization or an authority like CPA, not from your friends and family. Only way to verify your returns is some one to go thru' years of screen shots. Even that is waste of time, no way to verify that is your real account or paper account.

Now your claim of 3% per year fee is a lie or somewhat probable. That's how scamming industry works.

We have to base what your website states to calculate fees,

and the fees

for one service is about $1250. So Model portfolio has fees of about 12.5% to 25%. Your claim of typical account is irrelevant, no one can verify that. Prospective client looks at model portfolio and thinks that amount is okay with them to start services.
So who is lying?

And there is hidden cost. Take another gem from your education "Vega gains" from small account. While you are scalping at midpoint fills in your paper account, others have to pay spread and commissions.

Commissions from small accounts are not competitive and option spread b/a costs are pretty high. Even scalping 2 times for that gain can cost 4% to 8% (assuming each open or close trade spread & commission cost of 1% to 2%). 12 times that in a year can wipe out any your stated return.

Frankly you are light weight. There are quality posters like sle, newurldmn, Jackrab, ajacobson, truetype, Robert morse, Maverick74, globalarbtrader (few others i am missing) who are genuinely helping in this forum.

There are also free website like CBOE or https://www.optionseducation.org/en.html which provides quality education.

Go ahead post your shill and linkfest after this. I am done

 

[Kim Klaiman]

We have to base what your website states to calculate fees,

View attachment 179407

and the fees

View attachment 179408

for one service is about $1250. So Model portfolio has fees of about 12.5% to 25%.

And there is hidden cost. Take another gem from your education "Vega gains" from small account. While you are scalping at midpoint fills in your paper account, others have to pay spread and commissions.

So you take the fee for 3 services and apply it to account size of a single service? And you call me a scammer?

My 2015 Personal Account Return: 80.2%

Does it look like a paper account to you?

 

[Kevin Schmit]

Am I qualified to provide options education?

No, I don't think so. You, and others on this thread, seem to believe that there is a generalized, tradeable vol ramp ("Vega gains" to be had!) prior to earnings. There is not. What you perceive as an "increase" in IV is just an artefact of how vol components are annualized. IV for an options contract spanning earnings has two components; base vol (diffusion) and anticipated earnings spike (jump). Suppose an option spanning earnings has 5 trading days to expiry and earnings come out at noon on the last day, and that vol expectations remain steady at 1% daily base-vol and 10% anticipated spike for days eod 0 through 4. Apparent IV "increases" from 72% to 159%:

>>> import math as m
>>> m.sqrt(252 * (0.1**2 + 4 * 0.010**2)/5)
0.7239889501919211
>>> m.sqrt(252 * (0.1**2))
1.5874507866387546

This "vol ramp" of 87% (159 - 72) is a mirage, it is not tradeable as nothing about anticipated vol has actually changed.

If you are making money on these trades its likely from movement in the underlying (Delta gains), not from any Vega gains. There is no vol edge here. "Educating" your clients to believe that there is suggests that you might be unqualified to teach this subject.

 

[Kim Klaiman]

If you are making money on these trades its likely from movement in the underlying (Delta gains), not from any Vega gains. There is no vol edge here. "Educating" your clients to believe that there is suggests that you might be unqualified to teach this subject.

As I mentioned several times, we make money from both (vega and gamma).

As I mentioned, to see vega increase, take a look at QCOM straddle that went last Tuesday from 2.43 to 3.00+ in a matter of 3 hours. Latest example would be HD straddle that went from 5.40 on Wednesday to 6.00+ on Thursday. Just two examples.

We don't over complicate things with all formulas and mambo jumbo. We have been making money on this strategy for 6 years. But then again, if you don't believe it works - better for us. After all, we need someone to sell those straddles to us.

 

[IndyJonerJr]

Can

What your talking about after those percentages they drop to a penny. After commissions and risk that's nothing.

I've found the market tends to mostly price things pretty correctly in the levels. It's why I sip and take pennies vs. gambling having to be on the correct side.

The only way you can get more is to buy weeks out but then you ask what was your return for length holding. Not good compared to someone who does weekly earnings selling.

 

[IndyJonerJr]

Sure it's a good strategy, but don't underestimate the risk!!

About 10 years ago when I first started trading volatility that was one of the first "easy" trades I saw. Well of course things that seem easy at first are not. I doubled my account in few months (first sign your going to get in trouble lol). Well of course I hit a trade (still remember it was VSEA) where it moved way out of the IV range the options were pricing and I was down 30% in one shot.

I still don't think it's a terrible idea. The key would be to trade a fixed amount of your capital on each earnings and NOT keep sacking up (which is did so that one trade wiped out almost all my gains). So if you have a 100k account do 10k per trade but don't increase it. That way if you do get a loser or two or three even in a row you won't blow up. Of course your returns won't be as good but I'd rather take 20% a year than do what I did and double my account in a few months just to see it get crushed.

I moved away from that method because at that time I had a full time job and my small account size and potential return using this strategy in a "safe" way did not justify me trying to do this full time.

I commend you for telling us the pain and for others to learn. Takes a big man to admit defeat

 

[tradermaji]

Guys and Gals...

I recently became a member of SteadyOptions are here are my observations:
1. The trade alerts that I have received till now are all real... I have been able to enter some and some just moved too much after the advisory email was sent out. It is a disadvantage to run after a trade is posted. However, to Kim's credit he posts a discussion on that particular trade he plans to take on the forum. By doing some reading on my own and trying to understand why the trades are contemplated, I have been able to enter some trades at better prices or exit them earlier than the advisory emails.
2. The Steadyoptions forum is a real goldmine of information and filled with very helpful members. The Unofficial Trades section generates great ideas from other members who are willing to help out. Other than Kim, there are a number of other mentors on the site whose knowledge and help are really worth it.
3. I consider the monthly fee that I started to pay (I started October 2017) as a tuition. The concept of relative values and using it to trade was something I learned here and know starting to understand how powerful it is. I think many member can start trading on their own after following the trades and the methodology for a few months.

I have not been remunerated to make this posting, nor have been asked to post. I just happened to see this post and I thought I should post my experience with SteadyOptions and others can decide for themselves.

If you still think I am a shill, then I say... if you are in the San Diego area let me know and we can have some coffee and talk. I would like to know know you still think I am a paid/unpaid shill for SteadyOptions after that.

Said all of the above, I think it is very healthy to be critical of the various trading education and systems being offered. Over the decades, I have bought many and spent untold amount of money on them. At least with SteadyOptions, I find that the advisor is taking the same trade as I am... sometimes I am following him and sometimes, he is entries are after mine. Some members have complained about missing those trades or facing slippage, but I think overall, my experience has been a positive one.

 

[Kim Klaiman]

Guys and Gals...

I recently became a member of SteadyOptions are here are my observations:
1. The trade alerts that I have received till now are all real... I have been able to enter some and some just moved too much after the advisory email was sent out. It is a disadvantage to run after a trade is posted. However, to Kim's credit he posts a discussion on that particular trade he plans to take on the forum. By doing some reading on my own and trying to understand why the trades are contemplated, I have been able to enter some trades at better prices or exit them earlier than the advisory emails.
2. The Steadyoptions forum is a real goldmine of information and filled with very helpful members. The Unofficial Trades section generates great ideas from other members who are willing to help out. Other than Kim, there are a number of other mentors on the site whose knowledge and help are really worth it.
3. I consider the monthly fee that I started to pay (I started October 2017) as a tuition. The concept of relative values and using it to trade was something I learned here and know starting to understand how powerful it is. I think many member can start trading on their own after following the trades and the methodology for a few months.

I have not been remunerated to make this posting, nor have been asked to post. I just happened to see this post and I thought I should post my experience with SteadyOptions and others can decide for themselves.

If you still think I am a shill, then I say... if you are in the San Diego area let me know and we can have some coffee and talk. I would like to know know you still think I am a paid/unpaid shill for SteadyOptions after that.

Said all of the above, I think it is very healthy to be critical of the various trading education and systems being offered. Over the decades, I have bought many and spent untold amount of money on them. At least with SteadyOptions, I find that the advisor is taking the same trade as I am... sometimes I am following him and sometimes, he is entries are after mine. Some members have complained about missing those trades or facing slippage, but I think overall, my experience has been a positive one.

maji,

Thank you for posting.

I'm sure some people will still say you are a shill (despite the fact that you are on ET since 2004, long before SteadyOptions was existed and posted over 1,000 posts). And some people will still ask for proof to verify our performance.

Some people will still say that I also faked almost 200 reviews on independent third party reviews sites. Also faked 80k+ posts and 3,700+ members on SteadyOptions forum. And 170+ articles and 3,000 followers on Seeking Alpha are also a complete fake.

Our members know the truth, and this is the important thing to me.

Your approach is the right one. I could see it right away after you joined SO. Participating in forum discussions, asking questions etc. And yes, the monthly fee is a tuition - this is how most members see it.

To be critical of the various trading education and systems is a very healthy thing. To attack someone personally and call him a scammer without even knowing him is completely different thing. It's mocking and harassment.

 

[truetype]

My 2015 Personal Account Return: 80.2%

It's to Vendor's credit he adds this disclaimer on that page:

Q: Can you achieve similar performance with $1,000,000 portfolio?
A: Most likely, NO. It is a well known fact that achieving very high performance numbers becomes more difficult as your account grows, for various reasons. One of the issues is liquidity, and this is why I don't recommend allocating more than $100,000 to SteadyOptions.