Option plays in the Market Update Service

[SOL]

Option Plays

These are just random thoughts on the topic


While the rate of new options plays will slow down, we will still issue option plays. Unfortunately, when it comes to all the plays, I am the one that has to monitor everything and options require a lot more attention. So at least until the beginning of January, there will be fewer option plays issued, and I will use this time to mentally detox. After that, if some investors are still interested in a larger number of option plays, we might consider the possibility of training two individuals to help with the processing of at least 65% of the data. If that is successful, then we might (and the keyword to focus on is might) consider starting a separate options only based service

Note that when we first spoke of the AI service, it was delayed several times, as we wanted to make sure everything was in place before launching it. Health, as stated before, is the number one investment as far as we are concerned. Money comes, and money goes, and one can lose almost of if and still have a good chance of recouping one’s losses. Health does not operate in the same manner; it’s a downhill battle, and no amount of money on this earth is worth giving up one’s health for; once you lose it’s gone for good. Well, until they perfect life extension techniques.

The masses fail to understand this, in their quest for stability which they associate with large amounts of money, they willingly sacrifice the most valuable asset they have for one that is significantly inferior. The worst part is that even if they succeed, they can no longer enjoy the fruits of their labour for they are now plagued with a host of health issues. It’s like eating a chocolate with the wrapper. Money is useful, and we all need, but many just seem to focus on it; the more they have, the more they want, and that is dangerous; they also forget the elementary law of diminishing marginal utility. If we were willing to flush our health down the toilet, we could start several new services with ease, but that would come at the cost of sacrificing our health, and as far we are concerned health is priceless; trading it for money is a bad joke at best.


As you all know by now, we dislike pushing out services, and we abhor the practice of aggressively cross-marketing services. Thankfully we can state in the over 18 years that we have been in business we have not aggressively cross marketed our services, nor have we tried to create new services for the sake of creating services with the sole intent of generating more funds. The new AI Trend trader service is proof of this concept; many subscribers are not even aware that this service exists because we will not aggressively market this or any other future service. We can also lay claim to something very few services can; we have never sent out even one bombastic email or used copywriters to create the illusion of great gains just to lure subscribers to any of our services.

We will also update the info posted in the passcoded section of our site so that traders, in theory, will be able to use the data provided to purchase options on stock plays that we issue. Once again, we are not going to stop issuing option plays, but we are not going to be issuing them at the rate they were issued this year.

[AstuteShift]

2020 has been one hell of a ride and considering all you have done for us please take all the rest you need.

Options in general are really for advanced traders, however I’ve always noticed that they always take something from you, whether it’s losses, time or the addition of stress. Those enormous gains are certainly no free lunch

[Yodean]

@Sol: yes, as I have advised you previously, you definitely should sleep more.

The appropriate supplements and a great diet are amazing and helpful, but nothing really replaces sleep.

From my perspective, my bombastic opinion is that one should not put any serious money to work in options trading unless one has had at least five years of position swing-trading experience, and has traded through (and survived) at least one or two "crashes," like 2008/9 and Feb./March 2020.

I am a bit of a curmudgeon and "old school" about this, but to me, you gotta be able to walk before you try to fly.

I've been doing this investing/trading thing for over 15 years, quite successfully (I retired from my regular gig at the end of last year at the tender age of 46), and thus far I have stayed away from any serious options or futures trading.

As Astute has mentioned previously in another post, you can do very well "just" position trading, especially given these very volatile markets.

The MU and AITT services offer tremendous value, even without any recommended options trades.

My two cents.

[langdj]

I have been having a blast with the options! Whenever a buy signal happens I split the first lot into three "mini lots"

1. The first one is for long term. I keep this to whenever Sol says sell
2. The second one I instantly put in a sell order when the option is up 20%
3. Lastly, I watch to see if the option price still continues to drop. Then I might buy more a few days or weeks later, even before it hits Sol's second purchase price.

What is fantastic is that for almost every option that I have bought I have been able to sell the second or third "mini lot" quickly and get around 20% profit (GES, KEY, SSNC, EVH, BAC). Sometimes I get lucky and when I execute option 3 I have been able to sell it a few weeks later for 45% profit (BSX). The extra volatility on options seems to be a great path to financial freedom

If I am not able to execute this strategy (USAK ) I am happy to own it for a longer period. I feel great about this because Sol's entry points are safer than if I picked them on my own and I take complete responsibility for any losses as it is me (and only me) who hits the buy button. This is all just a grown up video game anyway The trend is up so I feel good about being able to get out by Jan 2022 on most of these plays

However, I can totally see how it might add extra stress to give advise to others on buying options! What I will probably do is start using regular entry points as option entry points if the technical analysis (e.g. above longer term SMA, bouncing off resistance, etc, etc) looks promising. I would not use this for the AI service or the higher risk MU plays as they seem more catalyst driven or are in a downtrend, which is less predictable than the main plays

[SOL]

@Sol: yes, as I have advised you previously, you definitely should sleep more.

The appropriate supplements and a great diet are amazing and helpful, but nothing really replaces sleep.

From my perspective, my bombastic opinion is that one should not put any serious money to work in options trading unless one has had at least five years of position swing-trading experience, and has traded through (and survived) at least one or two "crashes," like 2008/9 and Feb./March 2020.

I am a bit of a curmudgeon and "old school" about this, but to me, you gotta be able to walk before you try to fly.

I've been doing this investing/trading thing for over 15 years, quite successfully (I retired from my regular gig at the end of last year at the tender age of 46), and thus far I have stayed away from any serious options or futures trading.

As Astute has mentioned previously in another post, you can do very well "just" position trading, especially given these very volatile markets.

The MU and AITT services offer tremendous value, even without any recommended options trades.

My two cents.

Sleep is vital, but it's not a lack of sleep that is causing any issues. I am quite diligent about getting 8 hours a day. Sometimes I only need 7 hours a day. I sleep when my body feels tired. I don't force myself to sleep it at a given time and when I sleep I sleep like a baby. I have many interests besides the stock market and as a result of the extra work, I have not been able to cater to these interests. For example, I can go through 500 pages of material a week, well under normal conditions. and only 30% or less would be related to the markets, the rest of the data, while it helps connect certain dots, is spread over a host of issues, for example widening my knowledge base on certain topics or diligently reading up on the latest data on health-related issues, like how to slow down the aging process, increase or improves one's IQ/mental capacity. etc. Btw I speed read through the data. Over the years I have developed a style that allows me to process larger volumes of data without having to read every single word. I kind of look for patterns when I am reading

Or spend a few hours doing nothing but musing over previous data and then suddenly discovering something new because i was not trying to. Hard to put into words, but try to nothing and see how difficult it is. When you slow down your mind and just relax, new ideas can pop out that usually lead to positive outcomes

[scott]

As usual, you are correct Sol. There shouldn't even be need to explain, but you did. Just sayin'.

[djanderle]

1st Time Trading Options was Great!

Being a bit nervous about losing money in the options I decided I would just nibble a bit.
Executed the Dow call option at a higher strike of 340 in Sept, which was about $343 cost. The market went up a bit and then back down further at the end of Oct. I purchased another call option on Oct 28th; moved the strike to 325 since the cost of $475 was more beneficial for the strike level. Today I sold the 340 @ 111% profit and the 325 @ 148% profit. I am excited about doing this again!

I did not make much money on these small trades, however, I learned how to trade simple call options. It also gave me confidence to try this again using Sol's guidelines.

[SOL]

As usual, you are correct Sol. There shouldn't even be need to explain, but you did. Just sayin'.

Scott thanks for the cool comments . Normally I would not say anything but we are fortunate to have such a great community, so I felt it would be nice to just provide some data in regards to the change.

Life is interesting many individuals state that it gets boring after a certain point because they cannot find anything of value, they have run into a brick wall so as to speak, but in reality, the brick wall is just an illusion. All one has to do is attempt something new, anything new and the spark comes back. Live like a child and it will never get boring. Children explore with curious eyes, adults follow with dead ones.

It's nice to have individuals like you as part of this community

[DJ_4]

I've been trading options for years, before joining the TI community. It is extremely dangerous if you do not know what you're doing. I had my ups and down and it's very true, health is so important. I have lost sleep and have been stressed out in every way and everything one can go through in the stock market. After joining TI, it's incredible how much I've changed and learnt. The amount of patience I have now and not one time have I ever been stressed out about my trades again, even when the market was crashing, it was quite exciting. It's quite incredible how much my lifestyle has changed, thank you Sol! I love the option trades that Sol provides and if you stick to the rules and have patience and limit your greed, the returns will speak for its self.

[AstuteShift]

I've been trading options for years, before joining the TI community. It is extremely dangerous if you do not know what you're doing. I had my ups and down and it's very true, health is so important. I have lost sleep and have been stressed out in every way and everything one can go through in the stock market. After joining TI, it's incredible how much I've changed and learnt. The amount of patience I have now and not one time have I ever been stressed out about my trades again, even when the market was crashing, it was quite exciting. It's quite incredible how much my lifestyle has changed, thank you Sol! I love the option trades that Sol provides and if you stick to the rules and have patience and limit your greed, the returns will speak for its self.

Indeed, becoming a trend player is a beautiful thing

[StillsMurmur]

As a retired physician and a patient, I can tell you that what you are saying about the effect of stress, sparse sleep, and overwork is true. Everyone has some inborn weak point. If you stress a system beyond it’s limits it will break. Sadly, when it comes to your health the limits are difficult to recognize unless you are able to recognize and accept any warning signs which may present themselves. Accepting that you have limitations and pacing yourself accordingly is a critical step and perhaps the most difficult. I respect and commend you for your wisdom. May you enjoy the best of health.

Adam

[AstuteShift]

As a retired physician and a patient, I can tell you that what you are saying about the effect of stress, sparse sleep, and overwork is true. Everyone has some inborn weak point. If you stress a system beyond it’s limits it will break. Sadly, when it comes to your health the limits are difficult to recognize unless you are able to recognize and accept any warning signs which may present themselves. Accepting that you have limitations and pacing yourself accordingly is a critical step and perhaps the most difficult. I respect and commend you for your wisdom. May you enjoy the best of health.

Adam

I’m in the medical community myself (as a PA), unfortunately the vast majority of providers are really the worst patients and also extremely terrible investors

They think their degrees or work entitles them to kill the market but majority of them fail since their arrogance will lead them always to follow experts and lose money.

I once gave a small copy of SOLs free newsletter just to see if I can give them a spark....you can only see the reaction of disappointment and stating what nonsense is this. That’s usually my cue to go in and make out like a bandit. Unfortunately only 10 percent win while 90 percent lose

That’s the mass mindset for you, combined with extreme stress unfortunately makes them food for the markets

[StillsMurmur]

Despite having some background in options, I could use a little help in trying to better assess the way they are being recommended here and what that means to me. I hope someone will be willing to help me with two concrete examples.

In the Dec. 9 Newsletter, there was an option play for PFE Jan 22 42.00 call: Deploy a lot when stock is 34.5-36.

So assuming the stock price is in the established range, is there some methodology or guideline to know what contract price is reasonable (vs. high or low) other than the simple accumulation of experience? Or for a contract that is a year out, is it just enough to look at what the relationship has been between share price and contract price over the last couple of weeks before the recommendation and just be reasonable (perhaps within 5 or 10% of recent prices) under the circumstances with which the recommendation was made.

On a similar tract, there was a second play: USAK April 2021 12.50 call. There were two criteria: deploy a lot if the stock is trading @ 8.7-9.0 or when options trade at 0.42-0.51.

I didn't consider this play because it had <6 months of time value, but that point aside, when I looked it up the stock was trading in the range at 8.99 but way out of the options range which was trading at 0.90. If I were considering this trade, I would have been very concerned about overpaying by 80% for the contract (0.50 vs. 0.90). In other words, would it be better to read “and when options trade” as opposed to “or when options trade” or how much leeway is reasonable?

I know that the options price isn't linked directly to the stock price, so I figure maybe it was just high because the stock was running up that particular day and if I had waited for a different day I might have gotten a better price, perhaps into the recommended range? It certainly wasn’t priced higher because of the shortened time value. But, if this same situation came up on something with a greater time value, am I being overly wary of paying too much for the options contract even though the stock is trading in the correct range? Or is paying too much for the contract less of an issue than I’m making it, even though over-paying by 80% seems significant to me? I assume not, otherwise, why give a trading range for options to begin with?

Warmest regards,
Adam