Trade Options Safer and Smarter
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Today, I'm here to tell you about Maximum Safety and Maximum Reward option trading. These strategies have been the motto of the San Jose Options mentoring program for a while now. Let's talk about where this amazing concept came from. This motto has bleak and humble origins from my early days of options trading. I had some rather horrible experiences when I was starting out because, just like other option traders, I started trading Iron Condors. I knew a little bit about credit spreads at the time, but never actively traded them. One look at the risk graph and I could tell, credit spreads were risky business. I was tired of trading the traditional option spreads. They've been around for decades and I figured there must be a safer way to trade. I had several winning months, but they always ended with a less than satisfying flop. I lost thousands of dollars after one large movement in the market. These less than profitable results got me thinking seriously about option trading. There must be a better way to trade! I knew I wouldn't get anywhere if I kept sustaining these large losses on my trading account. Several small wins being topped off with a big loss doesn't get you anything. I came up with Maximum Safety, Maximum Reward option trading years ago. I was trying all the idea I could possibly think of, with great results. This has been working for me for several years now and I don't see any sign of me stopping. I came to realize, I need to maximize the Greek called Theta, while minimizing Gamma and Vega. Once I have that down, I'll have what I'm looking for. I have to say, we've made great leaps of progress over the last few months. While comparing a strategy we call "the Revolver" to the traditional Iron Condor, we found that we can get the same Theta as the Condor, but with much lower Gamma and Vega. For example, while having the same amount of Theta, the Iron Condor would bring about a $8,000 loss on a 10% move to the upside. On the other hand, our strategy will only feel a $200 loss with a similar move. Our Revolver is proving to outperform and be at least twice as safe and the traditional Iron Condor. To conclude I would just like to say that if you really want to find success through trading options, then you really need to focus on Maximum Safety and Maximum Reward. Again, this means that you'll need to maximize your Theta while minimizing Gamma and Vega. I hope you have found this article to be informative and helpful. Good luck on your option trading, and until next time, have a great day!