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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

Lululemon Athletica Inc. (LULU) Earnings Trade – The Double Neutral Calendar Spread Placed On 12/6/17 Explained

Lululemon Athletica Inc. (LULU) reported earnings after the markets closed on Wednesday. (LULU) is a great candidate to use the Double Neutral Calendar Spread strategy. To read more about this strategy, see this link here: http://kevinmobrien.com/?p=858

At the time of placement on Wednesday, (LULU) was trading at $66.50/share. Understanding past performance movement post-earnings on the stock, (LULU) tends to move in the $4.00 -$6.00 range, up or down after reporting earnings. When using this strategy, I like to go on the higher end of price movement. For example, at $66.50 a share, I was looking at the $72.50 strikes on the call side, and $61.50 on the put side. While there other closer near the money strikes available, using those presented too much risk for me, allowing less price movement in the share price to make a profit I was satisfied with.

Trade and Probability Calculator/P/L Chart

I got this trade filled at a $0.33 debit.

The following morning, (LULU) opened up at $73.35/share. This was a perfect scenario. Immediately at the open, the trade was very profitable. It could have been closed out then. However, an important factor with this strategy is that time-decay is on your side at this point. Depending on what kind of profit a trader is content with, a choice has to be made. I chose to keep the trade until this morning (Friday, 12/8/17). Understanding that the stock wasn’t going to make a drastic price move, time-decay taking place, I closed the position out at a $1.10 net credit on the call side, and also got $0.10 on the put side, which I sold on Thursday morning.

To compare strategies and costs, a Straddle strategy (buying both calls and puts that are at-the money), would have cost about $7.50. Using ten (10) contracts on each leg, this trade would have costs $7,500.00, minus commissions. A Strangle strategy would cost less, but there is also a lot more risk, as the stock has to move much more in order to profit.

Another benefit of the Double Neutral Calendar Spread strategy is how well it holds value. On a Straddle/Strangle, there must be a major price move in order to profit or you will be looking at a major loss. In my opinion, the Straddle is the most risky earnings strategy one can place. While the potential profit is unlimited on the upside (the calls), there is simply too much of a price move needed, often unrealistically.

When using this strategy, you want to see a profit/loss chart that looks like the one I posted above. If you see any points in the chart that look like this, avoid the trade completely:

You will always want to avoid non-volatile stocks that have a history of making minimal price moves post-earnings.

As I mentioned in my first post about this strategy, when used properly with the parameters I emphasize, this strategy is one of the most inexpensive, low risk, and profitable strategies there is when using for an earnings-based trade.

If you have any questions about this strategy, or stock options, please leave a comment or e-mail me at: kmob79@gmail.com

This strategy, and all earnings traded are posted on my Trading Forum website, and each subscription has access to these trades (you receive them instantly via e-mail once posted). I am currently offering a subscription match plan until this Sunday, 12/10/17.

Thanks again.

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

 

 

 

 

 

 

 

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

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.

Earnings Trade of the Week: Tesla, Inc. (TSLA) – Reports After the Markets Close On Wednesday, 2/22/17

Tesla, Inc. (TSLA) is scheduled to report earnings after the markets close on Wednesday, 2/22/17.

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

Oct 27, 2016

211.34
213.70
201.65
204.01
204.01
13,093,700

Oct 26, 2016

201.00
203.19
200.10
202.24
202.24
5,632,800

Last quarter, (TSLA) had one of the least moving quarters after reporting earnings in some time. I think this is why this trade strategy here, a Reverse Iron Condor, sets up really well. If (TSLA) reported earlier this week, I would have been more comfortable using the weekly options that expire this Friday. But since tomorrow will already be Thursday, we want to be a little more conservative when choosing to use a weekly with just two days left. Instead, I will use next week’s expiration, which expires next Friday. I like this trade a lot, as I think (TSLA) will make a much larger price move than last quarter, and the break-even points are much smaller than I anticipated. (TSLA) is a very volatile stock in the first place, so this trade should have no problem gaining maximum value. 9.5/10. I am going a bit heavier on this specific earnings trade than usual.

Here is how the trade is placed:

Entered Trade

Buy 20 TSLA MarWk1 255 Put

Sell -20 TSLA MarWk1 250 Put

Buy 20 TSLA MarWk1 290 Call

Sell -20 TSLA MarWk1 295 Call

Requirements

Cost/Proceeds
$4,200.00
Option Requirement
$0.00
Total Requirements
$4,200.00
Estimated Commission
$100.00

NBBO
1.80 2.39. Try to pay 2.10 or less for this trade. At a maximum, pay up to 2.15. See the attachment for the profit/loss chart.

Update 1: 9:22 am EST: Pre-market, (TSLA) is down about $6.00/share. Once volume kicks in, it could go any direction. Since there is over a week of time value left, I am initially going to place the price to close out (net credit) on both the call and put sides of this trade at $4.00 for now. I will be continuously updating this trade throughout the day.

Update 2: 9:44 am EST: On the put side of this trade, place the price to close the position out (net credit) at $4.20. Leave the call side open for now, there is plenty of time left on it, and the Reverse Iron Condor strategy, with two “sides”, the bull call spread and the bear put spread, can do very well by holding one side.

Update 3 12:45 pm EST: No Changes to positions. Will update as needed.

Update 4: 3:40 pm EST. I will update this trade right before the markets open tomorrow morning. In a good spot, should do well on it.

Update 5: 9:15 am EST. 2/24/17: TSLA is down another $4.00 pre-market, so after yesterday’s drop this trade should start really gaining in value. One of the reasons I chose next week’s expiration instead of the February Week 4 (this week) is exactly for how this trade is working out. If I chose this weeks, it is a borderline loss/break-even unless the stock really drops a lot more today. It would have been much more risky move to do. I have the price to close the put side of this trade out at 4.30. The call side obviously has little value, as this is how the strategy is designed, so leave it open. It would cost more to close the position than the value. I will update any changes, as needed, here.

Update 6: 9:40 am EST, 2/27/17: TSLA down big again. 4.30 STC (net credit) on the put side of this trade.

Free Earnings Trade of the Week: Activision Blizzard, Inc. (ATVI) – Reports After the Markets Close 2/9/17

Activision Blizzard, Inc. (ATVI) is scheduled to report earnings after the markets close on Thursday, 2/9/17.

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


Nov 03, 2016

42.96
43.67
42.63
43.37
43.37
12,822,700

Nov 02, 2016

42.63
43.09
42.26
42.60
42.60
7,792,900

The current Implied Volatility on the weekly at-the-money strike price is at 175, which is extremely high. The at-the-money March 2017 strike price is at 36, so there is a major difference. The Neutral Calendar Spread is the strategy to use here. Everything looks good about it: weekly options, price to place the trade, wide break-even points, break-even points, and the high IV on the weekly at-the-money strike price. 9.5/10, trade of the week.

Here is how the trade is placed:

Entered Trade

Sell -20 ATVI FebWk2 40 Call

Buy 20 ATVI Mar17 40 Call

Requirements

Cost/Proceeds
$720.00
Option Requirement
$0.00
Total Requirements
$720.00
Estimated Commission
$50.00

NBBO -0.29 – 0.43. Try to pay 0.37 or less for this trade. at a maximum, pay up to 0.38. See the attachment for the profit/loss chart. I will post the price to close this trade out right before the markets open tomorrow.

Update #1: 9:20 am EST – Pre-market, the stock is up about $4.70/share, but do expect the share price to fall. I am placing the price to close this trade out at $0.60 (net credit). I will update any changes here throughout the day.

Update #2: STC (net credit) now at 0.50.

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

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