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New Weekly Subscription Now Available (7 Trading Days) Plus End of Year Reduced Subscription Rates (12/18/17 – 12/25/18)

I am now offering a weekly subscription plan (a full 7 trading days) and also have reduces subscription rates on all plans from Monday, 12/18/17, until Christmas Day (12/25/17.)

Here are the following reduced rates for all subscription plans:

– Weekly Subscription (7 Trading Days) – $39.99
– Monthly Subscription – $99.99 (normally $119.99)
– Three (3) Month Subscription – $219.99 (normally $249.99)
– Six (6) Month Subscription – $329.99 (normally $399.99)
– One (1) Year Subscription – $449.99 (normally $599.99)
– Lifetime Subscription – $599.99 (normally $799.99)

Once subscribed, I will e-mail you a username and password to the Trading Forum Webpage, where earnings, weekly, and long-term trades are posted. I will then need your Skype username so I can add you to the mainchat, where I post all of the Daily Options Trading Strategy (DOTS) trades in real-time. All accounts are set-up almost immediately after subscribing.

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

Earnings Strategy: The Double Neutral Calendar Spread (Updated On 12/6/17, See Bottom of Page)

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.

Updated: 12/6/17. This strategy is still doing remarkably and consistently well. In fact, I am placing the Double Neutral Calendar Spread today on Lululemon Athletica Inc. (LULU), which reports after the markets close today. I am expecting it to do very well, and got the trade for such a great price, which is one of the main reasons the strategy does so well, along with the extremely high ROI. I rarely even use the Strangle strategy anymore because of this.

I highly recommend using this strategy when the parameters I posted in the article fit the criteria. If you have any questions, you can e-mail me anytime at kmob79@gmail.com

 

 

 

 

 

 

 

Updated List of Stocks Used For The Daily Options Trading Strategy (DOTS) – Current as of 11/28/17

Here is the updated list of stocks used in the Daily Options Trading Strategy, current as of 11/28/17:

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

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

Tier 3: RHT, PYPL, FDX, NUGT, EXPE, FSLR, CAT, C, IBM

I also have discounted subscription rates until this Friday, 12/1/17.

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

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.

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.

New Year’s Discounted Subscription Rates – January 4, 2017 Through January 11, 2017

I am offering a discount on all Subscription Plans until January 11, 2017. Earnings will be picking up soon, as well, so should get plenty of these trades including the Daily Options Trading Strategy (DOTS). Each subscription plan includes all of these strategies, including weekly debit spread trades.

Here are the following discounted rates:

One (1) Month Subscription – $129.00
Three (3) Month Subscription – $299.00
Six (6) Month Subscription – $449.00
One Year Subscription – $699.00
Lifetime Subscription – 999.00

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

The Daily Options Trading Strategy (DOTS) Weekly Update & Market Volatility

It has been a very busy week so far using the Daily Options Trading Strategy (DOTS), especially on Monday. This strategy does extremely well in volatile markets. Here are the trades placed and closed out so far:


– Monday, 11/14/16. BABA at 9:35 am EST. 0.23 STC order above price paid/contract. December 90.00 calls. Paid 3.93 per contract.
– Monday, 11/14/16. FB at 9:37 am EST. 0.35 STC order above price paid/contract. December 115.00 calls. Paid 5.30 per contract.
– Monday, 11/14/16. AAPL at 9:39 am EST. 0.30 STC order above price paid/contract. December 110.00 calls. Paid 1.74 per contract.
– Monday, 11/14/16. C at 9:53 am. 0.17 STC order above price paid/contract. December 55.00 puts. paid 2.17 per contract.
– Monday, 11/14/16. GOOGL at 10:45 am EST. 1.40 STC order above price paid/contract. December 755.00 calls. Paid 19.70 per contract.
– Tuesday, 11/15/16. BA at 10:00 am EST. 0.34 STC order above price paid/contract. December 150.00 calls. Paid 2.40 per contract.
– Wednesday, 11/16/16. NUGT at 9:43 am EST. 0.20 STC order above price paid contract. December 9.00 calls. Paid 1.90 per contract.
– Wednesday, 11/16/16. TSLA at 10:15 am EST. 1.00 STC order above price paid/contract. December 180.00 calls. Paid 8.50 per contract.

To see my trade log, you can visit the link here: http://kevinmobrien.com/?page_id=480

If you are interested in my subscription service, I provide each trade on Skype and Chatzy in real time, with the ticker symbol, strike price, expiration date, and my sell-to-close price, which is the amount above what is paid for each contract. I also interact with all subscribers throughout each trading day. The subscription also includes access to my Trading Forum, where I post my earnings, weekly, and long-term trades.

I currently have reduced subscription rates and offer a one week money back guarantee if you are not happy with the service.

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

-Kevin

Free Earnings Trade of the Week: GoPro, Inc. (GPRO) – Reports After the Markets Close On 11/3/16

GoPro, Inc. (GPRO) is scheduled to report earnings after the markets close on Thursday, 11/3/16.

Last quarter, the stock had the following price movement after reporting earnings:

Jul 28, 2016

12.15
13.28
11.75
13.02
24,145,000
13.02

Jul 27, 2016

11.47
11.83
11.42
11.57
10,651,700
11.57

The Implied Volatility on the weekly at-the-money strike price is an extremely high 401. This is very rare. Compared this number to the November 2016 at-the-money strike price of 113, which is still high, but there’s still a huge discrepancy here. If the stock make a similar move as to what it did last quarter, the trade and strategy I am using here, the Neutral Calendar Spread, will be very profitable immediately. The price is excellent to place this trade, as well, with weekly options available. 9/10.

Here is how to place this trade:

Entered Trade

Sell -75 GPRO NovWk1 12 Call

Buy 75 GPRO Nov16 12 Call

Requirements

Cost/Proceeds
$750.00
Option Requirement
$0.00
Total Requirements
$750.00
Estimated Commission
$187.50

NBBO
gpro-ncs-11316 0.06 – 0.13. Try to pay 0.10 or less for this trade. At a maximum, pay up to 0.11. See the attachment for the profit/loss chart. I will post the price to close this position out tomorrow morning right before the opening bell.

Update 1: 9:22 am EST, 11/4/16 – Pre-market, the stock is down about $2.00/share. This is close to what I expected, so I am anticipating the stock to recover off this low. I am placing the STC (net credit) at 0.30 for now, and will update any changes to this here.

Update 2, 10:07 am EST – price to close this trade out (net credit) now at 0.25.

Update 3: 10:42 am EST. Position closed at 0.27. Paid 0.12.

CBOE’s Useful IVolatility Tool – Website Link

One tool I like to use with stock options, especially on Straddle or Strangle trades, but also long-term trades, is the Chicago Board Options Exchange IVolatility options calculator/pricer. The link is here: www.cboe.com/framed/IVolframed.aspx?content=http%3a%2f%2fcboe.ivolatility.com%2fcalc%2findex.j%3fcontract%3dC44A90FE-8D3F-4F26-A1EA-AAB6AB7CB180&sectionName=SEC_TRADING_TOOLS&title=CBOE%20-%20IVolatility%20Services.

This calculator allows trader’s to put in a ticker symbol and choose their own parameters, such as the strike price, expiration date, current volatility percentage, and the current share price in relation to the strike price. One this information is added in, the calculator will then compute all of the parameters and show the estimated (very accurate) price for both the call and put options. This is especially handy for new option traders, but also very useful for options that have a longer expiration date and time-value left.

I am frequently asked how do I know what a good price to place the sell-to-close order should be on strategies such as the Straddle/Strangle, which has both call and put options placed simultaneously, a neutral-based strategy.

Yesterday, 10/17/16, I placed a Strangle on Netflix (NFLX), using November $115.00 strike price calls and November $85.00 put options. The stock was trading at $100.00/share at the time of placement and fill. I paid $3.10 to place this trade. Since there is about a month of time-value left on both legs of the strategy, I do not want to sell either side of the trade too low. Pre-market on Tuesday, the stock is up about $18.50 a share, so I have a general idea of what the call side will be trading at just based on experience and the intrinsic value alone, but the put side may also still have some value, especially should there be a pull back on the stock.

One important thing: after earnings, the Implied Volatility of a given security will drop. This is because the news is already out as to the results post-earnings and the uncertainty is mostly removed as to what direction the stock will move. When using the IVolatility calculator, as a general rule, I like to lower the volatility percentage about 20 points. So if the chart on the calculator had a volatility percentage of 58 pre-earnings, use 38 when you input the new information. This may be too much, or too little, but it will give you a good idea as to the average drop of volatility. I do this pre-market.

On earnings trades, you can always use trailing stops if you think the trade will keep gaining in value in relation to how the stock is moving.

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

Daily Options Trading Strategy (DOTS) – Updates List of Stocks Used – Current as of 9/6/16

Here is the current list of stocks used with the Daily Options Trading Strategy (DOTS) as of September 6, 2016:

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

Tier 2: BA, BWLD, TWTR, CMG, IBM, FDX, HD, C, FIT

Tier 3: EXPE, COST, SQ, PYPL, DPZ, CRM, DIS, UPS, ULTA

Tier 4: PNRA, PII, INTU, GPRO, FFIV, PX, V, NUGT, AVGO

I separate each group of stocks used into groups of 9, using a grid view. This makes it easier to navigate different tabs and follow each stock without having to close out any tabs or leave any page.

If you have any questions, you can contact me at kmob79@gmail.com.

Thanks.

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