Technical Analysis can get pretty crazy, and sometimes downright silly. From the big pile of T/A stuff, what is really important. This video shows you how to get 80% of the benefits of T/A with only 20% of the work.
The best way to chart a stock is with Japanese Candlesticks. But do you really need to learn all of the craziness that Candles brings? Or is there an easier way. In this quick introduction to Candles, I’ll show you how to get 80% of the benefit with only 20% of the work.
So how do you like getting 1% per year on your money down at Bank of America? Can you live on that?
Would you like to develop an extra income stream making money every month?
There are dozens of books on trading stock options. Stock Market Insurance Trader is unique in that it focuses just on one trade. Rather than confusing you with an endless array of deltas and condors and bear calls (Oh My!), it shows you in detail how to do one trade and do it well. This book is all about the Insurance Agent Trade. It’s the best trade there is, and with just a few variations, it’s the only trade you will ever need. And the best news… Stock Market Insurance Trader makes it easy to learn… even if you have no experience in the stock market.
The beauty of this trade is that it automatically gives you outstanding profit if your stock is going up, going sideways, or even down a little. By employing the strategies outlined in Stock Market Insurance Trader, you can start with a small savings account and earn an extra income.
In this book, you will learn:
- The Insurance Agent Trade
- Easy Technical Analysis
- Why This Trade Works So Well
- Trade Management
- Trade Variations
- Advanced Trades
- Risk Management
- Stock Selection
- Building A Portfolio
- …and more
Of course some will tell you that options are complex and risky. Stock Market Insurance Trader takes the complexity out of options and teaches you how to boost your returns with defined risk trades. You’ll learn how to trade like the pros, not like the reckless amateurs.
Beginners, intermediate options traders, and gurus can all learn something in this breakthrough book.
If you would like to create a “small business” that you can run from your kitchen table and manufacture cash every month, then this book is for you.
Browse the Introduction right now and learn more about the Insurance Agent Trade. I know you’ll be excited!
Remember, you can buy the book right now and read it on your kindle, iPhone, PC, or even in the next tab of this browser.
Nobody likes a great dinner better than I do. The problem is how to pay for it. I’m not talking about a dark meat combo at KFC, I’m talking about a great steak and a bottle of wine with my sweetheart. A nice $100 Saturday night celebration. Well I found a great way to easily grab a $100 for dinner every month, and I wanted to share it with you.
If you trade options every month, you may be leaving money on the table. Over the course of the month, that money could easily be $100. With hardly any work, you can end up with a nice dinner on the house every month. Here’s how it works.
For every option and stock, there is the price at which someone is willing to buy, and the price at which someone is willing to sell. You buy at the ask price and you sell at the bid price.
But are those prices fixed, or are they negotiable? Very negotiable. It’s an auction. If the volume of stock is very high, the spread between the bid and the ask prices will be small. But for options, where the volume is much smaller, the bid/ask spread could be wide – easily 10 cents or 20 cents or more.
Here’s an example. At the time of this writing, a June 150 Call option on BIDU has a bid price of $11.30 and an ask price of $11.50. Some has declared that they are willing to buy the option for $11.30, and someone else has said they are willing to sell the option at $11.50. You could place a market order and you would get that option at $11.50. But don’t you think that person would have let you have it for less? Almost always.
Whenever you buy or sell an option, use a limit order. Start your negotiation at the mid-point between the bid and the ask prices. You will usually get your trade. In this case, if you place a limit order for $11.40, you will likely get filled. If not, try $11.45, and you will most certainly get filled. Every time you shave a dime off of the bid price, you save $10. Do this on a 10-option lot, and that’s $100. And that’s enough to get you and your honey a nice dinner out.
Schlumberger (SLB) is an oil services company. I don’t know a lot about oil services, but a quick look on the SLB page on Yahoo Finance showed that out of 30 analysts that follow the stock, many rate it a buy, and some even rate it a strong buy. Very few if any rate it a hold. That’s the kind of stock that I like for an Insurance Agent Trade.
I started following the stock in early December. At that time the stock was looking pretty weak. The 5-day EMA line was below the 20-day SMA line – not an indicator of booming performance that I want to see before I execute a trade.
But on December 23, SLB started to turn up, and while it was perhaps a day or two early, I entered the trade, selling a Put vertical with a Feb 75/80 for $.46. For 50 contracts, my maximum profit was $2300. Two months is a bit short for the typical Insurance Agent Trade, but I wanted to diversify my holdings a bit and add a shorter term trade to the mix.
On January 6, after three down days for SLB, the 5EMA was crossing below the 20SMA. I decided to protect my position slightly by selling some Call spreads. I sold the Feb 95/100 for $.39. Since I was still bullish on SLB, I wanted my position to have a bullish bias. So I only sold 26 Call spreads on top of the 50 Put spreads that I had sold two weeks earlier. This made my overall position an unbalanced Iron Condor. A perfect trade for a stock in a trading range with a bullish bias.
“Why 26 Call spreads?” I hear you ask. Simple answer. I asked for 30, and could only get filled on 26. The goal was to have an unbalanced Iron Condor. Getting filled on 26 out of 30 was enough for me, so I didn’t try to go after any more.
Over the course of January, the stock made a higher low on January 10, and then a higher high at 91, but never really threatened the short call at 95. Overall the stock was stuck in a range, but it had a slightly bullish bias.
On February 3, less than 3 weeks until expiration, the price fell to support at about 86. That took the price of the Call spreads down. I closed the Calls for $.05, giving me a profit on the call side of $.34 each or $884.
In early February, I placed a Good Till Cancelled order on the Put spreads for $.07. Finally, on February 6, my order filled for $.07 each for a net profit on the Put side of $1950.
After commissions, this trade gave me a profit of $2580 for a return of slightly over 10% in about six weeks.
* * * * *
On February 26, I decided to get back in to SLB with a new trade. I sold a May put spread at 85/80 for a net credit of $.52 for each spread. The trade behaved fairly well and I entered a GTC order for a .08 that filled on April 15. This gave me $.44 net profit. With another 40 spreads, this was a profit of about 10% or $1880 in about 50 days.
As you search for the right Insurance Agent Trade, you will sometimes ask yourself something like the following question. “If I can get 46 cents for a 60-day Insurance Agent Trade, what is my monthly rate of return?” You can, of course, calculate that, but it can be a bit tedious to do it for several trades. And what if you ask a question, “I want to get 4% monthly for a 90-day trade. How much credit do I need?” Again that can be calculated, but asking the question backwards like that makes it more difficult.
So I made the following chart. For example, if you want a 90-day Insurance Agent Trade that is $5 wide and that makes you 4% per month, you will need to get 54 cents in net credit. If you get 46 cents net credit on a 60-day trade, that will give you a 5% monthly return rate.
What if you get 56 cents on a 72-day trade? That looks like about 5% if you read between the lines. You can calculate the return as follows:
Monthly Return = (net credit / ($5 – net credit)) x (30 / days till expiration)
Monthly Return = (.56 / (5.00 – .56)) x (30 / 72) = 5.3%
Refer to this chart when you are setting up your trades and it will help you quickly estimate the target credit and return rate for your trades. You might want to print it out and tape it to your monitor for easy reference.