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Updated Daily Options Trading Strategy (DOTS) List of Stocks Used – Current as of 10/13/17

Here is the updated list of stocks used in the Daily Options Trading Strategy, current as of 10/13/17:

Tier 1: AAPL, AMZN, BIDU, BABA, GOOGL, FB, NFLX, NVDA, TSLA

Tier 2: BA, TWTR, C, SQ, CMG, CRM, ULTA, FFIV, AKAM

Tier 3: RHT, PYPL, FDX, NUGT, EXPE, FSLR, LMT, ISRG, IBM

If you have any questions, you can e-mail me at: kmob79@gmail.com

Thanks.

Earnings Season Promo: Subscription Match Offer – From Thursday, 10/12/17 to Sunday, 10/15/17

From Thursday, October 12, 2017 through Sunday, October 15, 2017, I am offering all new subscribers a match on all subscriptions. This offer lasts until Sunday (10/15/17), ahead of earnings season, which starts in full next week. The match plan is as follows:

1 Month subscription = 2 Months
3 Month subscription = 6 Months
6 Month subscription = 1 Year
1 Year subscription = Lifetime

Once signed up, I will automatically credit your account with the match to whichever plan you choose.

If you have any questions, you can e-mail me at: kmob79@gmail.com

Thanks.

Very Busy Trading Day on Tuesday, 9/5/17

Today was a very busy trading day, 7 out of 7 winners. Even when the markets are down, the Daily Options Trading Strategy (DOTS) holds up extremely well. I actually prefer that the markets open down with the strategy, as it provides more call option buying opportunities. On average, each DOTS trade nets from 5% – 10% per trade, with an average of 7.5%. However, 15% winners are not uncommon depending on the charts, especially the Bollinger Band width and time of day.

Here are the trades for Tuesday, 9/5/17.

830. Tuesday, 9/5/17. NVDA at 9:39 am EST. 0.60 STC order above price paid/contract. September 165.00 calls. Paid 5.01 per contract.
831. Tuesday, 9/5/17. AMZN at 9:44 am EST. 1.10 STC order above price paid/contract. September 970.00 calls. Paid 12.60 per contract.
832. Tuesday, 9/5/17. BA at 10:57 am EST. 0.50 STC order above price paid/contract. September 235.00 calls. Paid 4.00 per contract.
833. Tuesday, 9/5/17. AAPL at 11:20 am EST. 0.40 STC order above price paid/contract. September 160.00 calls. Paid 4.35 per contract.
834. Tuesday, 9/5/17. NVDA at 12:13 pm EST. 0.35 STC order above price paid/contract. September 165.00 calls. Paid 3.80 per contract.
835. Tuesday, 9/5/17. AAPL at 12:16 pm EST. 0.09 STC order above price paid/contract. September 160.00 calls. Paid 4.00 per contract.
836. Tuesday, 9/5/17. AMZN at 12.19 pm EST. 1.00 STC order above price paid/contract. September 960.00 calls. Paid 14.30 per contract

You can also see my trade log at at the top of the homepage.

I am offering an end of summer subscription discount on all plans. You can see more about that on my post earlier today.

Also note that I do offer a free copy of my book on Bollinger Bands specifically, a nice complement to my main book on the Daily Options Trading Strategy. Just e-mail me to request the book, and I will send you a PDF file of it.

If you have any questions, you can e-mail me anytime at: kmob79@gmail.com

Thanks.

Subscription Discount – September 5, 2017 – September 12, 2017

I am offering subscription discounts on all plans from Tuesday, September 5, 2017 until September 12, 2017.

Here are the discounted rates:

One Week Subscription – $39.99

One (1) Month Subscription – $119.99

Three (3) Month Subscription – $299.99

Six (6) Month Subscription – $499.99

One (1) Year Subscription – $699.99

Lifetime Subscription – $899.99

All subscription plans include real-time trading alerts on Skype using my Daily Options Trading Strategy (DOTS) and access to the Trading Forum, where I post weekly, earnings, and long-term trades.

All subscriptions come with a full one week money back guarantee if you are not satisfied with the service.

If you have any questions, you can e-mail me at: kmob79@gmail.com.

Thanks again.

Updated List of Stocks Used For The Daily Options Trading Strategy (DOTS) – Current as of 8/16/17

Here are the current list of stocks I am using for my Daily Options Trading Strategy (DOTS). I separate the stocks into three (3) tiers, with nine (9) stocks per tier. The Tier 1 are the preferred stocks to trade, and so forth.

Tier 1: AAPL, AMZN, BIDU, BABA, GOOGL, FB, NFLX, NVDA, TSLA

Tier 2: BA, ULTA, TWTR, CRM, RHT, NUGT, CMG, ULTA, LMT

Tier 3: BWLD, EXPE, AKAM, PCLN, SQ, FFIV, HLF, C, FSLR

If you have any questions, you can e-mail me anytime at: kmob79@gmail.com

Earnings Strategy: The Double Neutral Calendar Spread

The Double Neutral Calendar Spread Strategy

The Double Neutral Calendar Spread is a very unique strategy. I have personally never seen anyone really use it the way I do. The strategy can be looked at as a “synthetic” Straddle/Strangle, and is so much cheaper to place than a Straddle or Strangle. Here I will outline the trade, when it is appropriate to use, and show comparisons. This will be a long post, as it does require a lot of examples and complete understanding of the strategy to adapt it to your trading arsenal. It is the type of strategy where you are taking a neutral position and could really care less which way it moves, and at a price that is a fraction of the cost to place as a Straddle, Strangle, or Reverse Iron Condor.

The premise of the strategy is neutral-based, meaning that the direction the share price moves is irrelevant. I use this strategy strictly for earnings trades. While the Neutral Calendar Spread is a neutral trade, this is a trade on volatility and price movement, but in a completely different way than a Straddle or Strangle.

Since Neutral Calendar Spreads offer some of the highest returns with a low cost to place, the goal of the strategy is to have one side of the trade (the call or put side) profit more than the cost to place the trade and off-set the losing side. On average, gains are usually around 100%, sometimes lower, but often much higher. It is not uncommon to pay $0.50 for a DNCS trade and sell it for $1.50. Even selling at 0.75 + is still a very good profit.

Lululemon Athletica Inc. (LULU) reported earnings pre-market today, 9/10/15. To place a Straddle or Strangle yesterday, you would have to pony up a large amount of capital to trade it, with plenty of risk. To buy 10 contracts each on LULU with both calls and puts at $64.00 strike prices, this would have cost you over $6,000.00:

LULU STR 9915

LULU 2 STR 9915

While LULU historically does move a lot after reporting earnings, paying over $3.00 + per contract on both the call and put side is simply too risky. With LULU at $64.05/share at the market close yesterday, to just break-even on this trade using the Straddle, the stock price would have to move to $70.21 on the calls or down $57.79 on the puts. No thanks.

Even if you wanted to use a Strangle, a cheaper alternative to the Straddle, it would still be very expensive (I will use out-of-the money strikes, $3.00 apart from the share price):

LULU 3

While the Strangle is cheaper than the Straddle, there is also more risk, as the share price has to move more in order to profit. Both the Straddle and Strangle have unlimited upside potential should the stock make a meteoric rise or fall. However, if the stock only moved $3.00 or so, the trade would be a disaster, as the Implied Volatility (IV) would drop a lot, losing value on the call and put positions. This is why you have to be very careful and aware of when to these strategies.

This is where the Double Neutral Calendar Spread comes into play. The strategy consist of buying two Neutral Calendar Spreads, calls and puts that are out-of-the-money. Knowing that LULU has a fairly consistent history of making $4.00 + price moves after reporting earnings, here is how the trade would be placed using this strategy:

Entered Trade #1: The Call side

LULU 4 ncs1

Entered Trade #2: The Put Side

LULU 5 ncs puts

 

Combined Trade Placed as One Order

LULU 7 dncs 91015

 

LULU 8 DNCS PL Chart

Depending on your trading platform, this trade can be placed as one order, or you will have to enter each side of the trade separately. OptionsXpress and TOS allow you to do it as one, I believe eTrade, TradeKing, Fiedelity you will have to place it separately. It is important to remember that if placing the trades separately, if one side of the order gets filled, the other side must get filled, as well. The success of the strategy depends on having all four (4) legs.

As it turns out, LULU is down $5.00 a share right at the market open here, a perfect position for the put side of the trade.

What is really great about this strategy is the minimal cost it takes to place and the high ROI. Unlike the Straddle or Strangle, it does not require a massive move to profit. In fact, even if the stock only moved $3.00 a share up or down, this trade still would be profitable. It holds value extremely well too. I have had many instances where the stock moved much more than I anticipated, and I still profited.

It is also important to understand that no matter what, one side of the trade will be a loser. It is the way the trade is structured. For example, on LULU, the call side of the trade is currently going for about $0.20 at 9:51 am EST on 9/10/15. Generally, I like to close out the losing position (the calls in this instance), especially when there are weekly options. When there are only monthly options available to use, which would be September/October, then I tend to hold onto the losing side longer in case there is a reversal, which can happen.

Time-decay is a big factor when using this strategy. As each hour passes, the price will continue to rise on the profitable side. Even if the stock should start to reverse, do not panic and sell too soon. A lack of time is on your side, so to speak.

As I mentioned earlier, if there is a choice between using a high priced Straddle/Strangle or a more safe, extremely less expensive strategy like the Double Neutral Calendar Spread, I will always use the DNCS. It is low-risk, high-reward strategy.

Now to the issue of what stocks to use this strategy with and other notes. You will only want to use this strategy with liquid stocks and especially liquid options. The reason for this is that on non-liquid options, the bid/ask price is very wide. Market makers and a lack of volume make it difficult to exit at the desired price. The entry is that tough to fill, but closing it out will be, so stay away from stocks where there is low volume, and always check the option volume, daily and open interest before placing any trade. A good example of this is a stock like Intuitive Surgical. A great candidate for this strategy based on how it moves post-earnings, the bid/ask prices can be $5.00 apart sometimes. That is simply too wide, and what usually happens is that the bid price will be extremely low, while the ask is high. Even trying to get a mid-point price is difficult because of the lack of volume, so just keep this in mind.

You do not want to use this strategy on a stock like MSFT, T, or other non-volatile stocks that don’t move too much after reporting earnings. Looking at a stocks historical movement after reporting earnings (use at least the last 4 quarters, if not more), will give you a good idea of which strike prices to use. You can also look at the options chain and the at-the-money calls and puts, add those up together, and see the anticipated price movement “priced” in.

This strategy works great on stocks like TSLA, AAPL, BIDU, BWLD, GMCR, Z, YELP, PCLN (depending on bid/ask prices), ULTA, etc..

Choosing the right strike prices to use at first may seem to be difficult, but it is not. Remember, this strategy holds up very well no matter what the movement is (even non-movement), so if the strikes you chose are off a a little, it is not a major issue. If anything, I like to widen the strikes out more on stocks like TSLA just to be on the safe side.

Always use your trade calculator when using this strategy.  If you ever see a Profit/Loss chart that looks like this (another LULU example that shows when the strike prices are too wide apart, using 71.00 strike calls, and $57.00 strike puts compared to the trade posted), do not trade it:

LULU Bad Chart

To understand this, if there are 0.00 ‘s or a negative (in red) in the middle price  (in this case at $60.87), this is a clear sign to steer clear. Sometimes, you will find a stock that you think will be a good candidate for this strategy, but when using the strikes that look like they would work well, they simply don’t align. This happens. Move on to the next trade. Other times, you will need to adjust the strike prices by a dollar, but make sure to never force a trade that isn’t there. As you begin using this strategy, you will become more familiar knowing when to use it. I do recommend using this strategy on stocks you follow or are at least familiar with.

As I write this, LULU has moved down over $7.00 a share, and the trade has still held up remarkably well. However, the goal of the strategy is to exit the profitable side quickly, not to keep it open for too long.

I do use this strategy quite often, especially during earnings season, and post them on my Trading Forum subscription with a full explanation of the strategy for that specific trade and the entry and exit points.  If you have any questions on this strategy, you can e-mail me at kmob79@gmail.com or leave a comment here and I will respond as soon as possible. Thanks.

 

 

 

 

 

 

 

Very Busy Week Trading So Far (6/12/17 – 6/13/17) – Daily Options Trading Strategy (DOTS)

This week has gotten off to a great start using the Daily Options Trading Strategy (DOTS). The daily volatility is providing plenty of opportunities, as the strategy takes advantage of daily swings in stocks. So far, here are the trades placed and closed out:

797. Monday, 6/12/17. AMZN at 9:39 am EST. 1.50 STC order above price paid/contract. June 950.00 calls. Paid 17.50 per contract.
798. Monday, 6/12/17. NFLX at 9:50 am EST. 0.50 STC order above price paid/contract. June 150.00 calls. Paid 3.80 per contract.
799. Monday, 6/12/17. FB at 9:57 am EST. 0.50 STC order above price paid/contract. June 145.00 calls. Paid 2.90 per contract.
800. Tuesday, 6/13/17. NVDA at 10:08 am EST. 0.50 STC order above price paid/contract. July 150.00 calls. Paid 8.80 per contract.
801. Tuesday, 6/13/17. BABA at 10:29 am EST. 0.40 STC order above price paid/contract. July 140.00 calls. Paid 4.50 per contract.
802. Tuesday, 6/13/17. NVDA (again) at 10:46 am EST. 0.40 STC order above price paid/contract. July 150.00 calls. Paid 7.40 per contract.
803. Tuesday, 6/13/17. AMZN at 11:00 am EST. 2.00 STC order above price paid/contract. July 965.00 calls. Paid 30.35 per contract.

Also, today was supposed to be the last day I was offering the subscription match plan (see last week’s post), but will extend that until this coming Thursday (6/15/17). If you have any questions, you can e-mail me at: kmob79@gmail.com

Thanks.

Subscription Match Plan – Available From 6/6/17- 6/13/17 – One Week Only

I am offering a subscription match for one full week on any plan from June 6, 2017 – June 13, 2017. This includes the One Month, Three Month, Six Month, and One Year Subscription (will be a lifetime subscription).

If you have any questions about the subscription service or stock options in general, you can e-mail me anytime at kmob79@gmail.com

Thanks again.

-Kevin

Updated List of Stocks Used – Daily Options Trading Strategy (DOTS) – 4/21/17

Here is the current list of stocks used for the Daily Options Trading Strategy (DOTS), current as of 4/21/17:

Tier 1: AAPL, AMZN, BIDU, BABA, GOOGL, FB, NFLX, PCLN, TSLA

Tier 2: BA, MA, TWTR, CMG, NUGT, NVDA, ULTA, C, MU

Tier 3: CAT, GPRO, RHT, LULU, SWKS, EXPE, CRM, SQ, AKAM

Tier 4: ADBE, WYNN, X, ATVI, MOMO, PX, FDX, STZ, PYPL

Key additions: MA, MU, SWKS, ADBE, X, MOMO, PYPL

I am offering a discount on all subscription plans until this Sunday, 4/23/17, and will match any subscription plan that is three (3) months or longer.

If you have any questions, you can e-mail me at: kmob79@gmail.com

Thanks.

-K

Daily Options Trading Strategy (DOTS) – Updated Stock List – Current as of 3/31/17

Here is the current list of stocks used for the Daily Options Trading Strategy (DOTS), current as of 3/31/17

Tier 1: AAPL, AMZN, BIDU, BABA, GOOGL, FB, NFLX, PCLN, TSLA

Tier 2: BA, BWLD, TWTR, CMG, NUGT, NVDA, ULTA, C, SQ

Tier 3: CAT, GPRO, RHT, LULU, LMT, EXPE, CRM, DIS, AKAM

Tier 4: IBM, WYNN, BBY, ATVI, MCD, PX, FDX, STZ, COST

If you have any questions, you can e-mail me at: kmob79@gmail.com

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