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Terry's Tips Stock Options Trading Blog

Making Adjustments to Calendar and Diagonal Spreads

October 29th, 2015

If you missed it last week, be sure to check out the short video which explains why I like calendar spreads. This week I have followed it up with a second video entitled How to Make Adjustments to Calendar and Diagonal Spreads.

I hope you will enjoy both videos. I also hope you will sign up for a Terry’s Tips insider subscription and start enjoying exceptional investment returns along with us (through the Auto-Trade program at thinkorswim).

Terry

Making Adjustments to Calendar and Diagonal Spreads

When we set up a portfolio using calendar spreads, we create a risk profile graph using . . .

Why I Like Calendar Spreads

October 21st, 2015

I have created a short video which explains why I like calendar spreads. It also shows the exact positions we hold in 3 Terry’s Tips actual portfolios so you can get a better idea of how we use calendar spreads.

I hope you will enjoy the video, and I welcome your comments.

Terry

Why I Like Calendar Spreads

The basic reason I like calendar spreads (aka time spreads) is that they allow you to make extraordinary gains compared to owning the stock if you are lucky enough to trade in a stock that stays flat or moves moderately higher.

I get a real kick out of making serious gains when the stock just sits there and doesn’t do anything. Calendar spreads almost . . . .

Two 2015 Case Studies of Options Portfolios

October 14th, 2015

Got an extra five minutes of time to change your thinking about investing forever? I invite you to read the following report and see why. You could get a clear understanding of how an options strategy can be used to dramatically improve your investment results for any stock you feel good about (good enough to buy shares in that company). For two companies we picked at the beginning of 2015, we have made over 100% on our money in the first nine months, and you could have done it as well, even if you knew absolutely nothing about options (read on and see how).

These case studies were actual portfolios carried out during the first nine months of 2015 in separate brokerage accounts at thinkorswim for Terry’s Tips subscribers (many of whom mirrored these trades in their own accounts or had trades executed automatically in their accounts by the (free) Auto-Trade service at that brokerage firm. The results include commissions on all the trades.

The first nine months of 2015 were not good ones for the market. The S&P 500 fell . . . .

The Worst “Stock” You Could Have Owned for the Last 6 Years

September 14th, 2015

Today I would like to tell you all about the worst “stock” you could have owned for the past 6 years. It has fallen from $6400 to $26 today. I will also tell you how you can take advantage of an unusual current market condition and make an options trade which should make a profit of 66% in the next 6 months. That works out to an annualized gain of 132%. Not bad by any standards.

For the next few days, I am also offering . . .

A Low-Risk Trade to Make 62% in 4 Months

September 8th, 2015

Market volatility continues to be high, and the one thing we know from history is that while volatility spikes are quite common, markets eventually settle down. After enduring a certain amount of psychic pain, investors remember that that the world will probably continue to move along pretty much as it has in the past, and market fears will subside.

While this temporary period of high volatility continues to exist, there are some trades to be made that promise extremely high returns . . .

Update on Last Week’s SVXY Volatility Trade

September 4th, 2015

Last week I suggested buying two calendar spreads on the inverse volatility ETP called SVXY. At the time, it was trading at $58 and history showed it was highly likely to move higher in the short run. It didn’t. Instead, it has fallen to below $46 today. Anyone who followed this trade (as I did) is facing about a 75% loss right now.

Today I would like to discuss this trade a bit more, and tell you what I am doing about it.

Terry

Update on Last Week’s SVXY Volatility Trade

As I said last week, the market is going crazy. VIX, the so-called Fear . . .

Now Might Be the Perfect Time to Make This Volatility Trade

August 25th, 2015

Today I would like to pass along a trade I just made. It has a chance of making 50% if the stock stays flat or moves moderately higher over the next ten days. I want to share it with you just in case you might like to try it yourself (with some money you could afford to lose – we’re talking about $670 here, per contract).

Terry

Now Might Be the Perfect Time to Make This Volatility Trade

The market is going crazy. VIX, the so-called Fear Index, skyrocketed to 40 yesterday, something it hasn’t done for over 2 years. It has fallen to about 30 today, and if history is any indicator, it is headed for the 12 – 14 level where it has hung out for . . .

How to Fine-Tune Market Risk With Weekly Options

August 17th, 2015

This week I would like to share an article word-for-word which I sent to Insiders this week. It is a mega-view commentary on the basic options strategy we conduct at Terry’s Tips. The report includes two tactics that we have been using quite successfully to adjust our risk level each week using weekly options.

If you are already trading options, these tactic ideas might make a huge difference to your results. If you are not currently trading options, the ideas will probably not make much sense, but you might enjoy seeing the results we are having with the actual portfolios we are carrying out for our subscribers.

Terry

How to Fine-Tune Market Risk With Weekly Options

“Bernie Madoff attracted hundreds of millions of dollars by promising investors 12% a year (consistently, year after year). Most of our portfolios achieve triple that . . .

3 Options Strategies for a Flat Market

August 6th, 2015

Before I delve into this week’s option idea I would like to tell you a little bit about the actual option portfolios that are carried out for Insiders at Terry’s Tips. We have 11 different portfolios which use a variety of underlying stocks or ETPs (Exchange Traded Products). Eight of the 11 portfolios can be traded through Auto-Trade at thinkorswim (so you can follow a portfolio and never have to make a trade on your own). The 3 portfolios that cannot be Auto-Traded are simple to do on your own (usually only one trade needs to be made for an entire year).

Ten of our 11 portfolios are ahead of their starting investment, some dramatically ahead. The only losing portfolio is based on Alibaba (BABA) – it was a bet on the Chinese market and the stock is down over 30% since we started the portfolio at the beginning of this year (our loss is much greater). The best portfolio for 2015 is up 55% so far and will make exactly 91% if the three underlyings (AAPL, SPY, and GOOG) remain where they presently are (or move higher). GOOG could fall by $150 and that spread would still make 100% for the year.

Another portfolio is up 44% for 2015 and is guaranteed to make 52% for the year even if the underlying (SVXY) falls by 50% between now and the end of the year. A portfolio based on Costco (COST) was started 25 months ago and is ahead more than 100% while the stock rose 23% – our portfolio outperformed the stock by better than 4 times. This is a typical ratio – portfolios based on Nike (NKE) and Starbucks (SBUX) have performed similarly.

We are proud of our portfolio performance and hope you will consider taking a look at how they are set up and perform in the future.

Terry

3 Options Strategies for a Flat Market

“Thinking is the hardest work there is, which is probably the reason why so few engage in it.” – Henry Ford

If you think the market will be flat for the next month, there are several options strategies you might employ. In each . . .

Long-Term Options Strategies For Companies You Like

July 30th, 2015

Today I would like to share an article I sent to paying subscribers two months ago. It describes an 8-month options play on Facebook (FB), a company that seems to be doing quite well these days. The spread is a vertical credit put spread which I like because once you place it, you don’t have to make any closing trades (both options hopefully expire worthless, all automatically) as long as the stock is any higher than a pre-determined price. It is actually quite simple to do, so please don’t tune out because its name sounds so confusing.

Terry

Here is the exact article sent out on April 24, 2015:

“A Long-Term Play on Facebook (FB): Last week in my charitable trust account I made a long-term bet that FB would not fall dramatically from here during the balance of 2015. It seems to be a good company that is figuring out how . . .

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Success Stories

I have been trading the equity markets with many different strategies for over 40 years. Terry Allen's strategies have been the most consistent money makers for me. I used them during the 2008 melt-down, to earn over 50% annualized return, while all my neighbors were crying about their losses.

~ John Collins