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The Terry's Tips Track Record

 

The Terry's Tips 2016 Track Record and the Start of 2017

We currently carry out 9 portfolios at Terry’s Tips, 8 of which are available for Auto-Trade at thinkorswim (so you can follow a portfolio and never have to make a trade on your own).    All except one of these portfolios can be carried out inside an IRA.   Paying subscribers can follow the results of all 9 portfolios. Some newsletters only reveal their winning portfolios to all subscribers, but every trade and every position for every portfolio is open for everyone at Terry's Tips. 

At the beginning of 2017, we made some changes in the strategies we employ at Terry's Tips.  In the past, we primarily used a strategy we call the 10k Strategy which involves calendar and diagonal spreads on underlying stocks that we like.  We were lucky enough to pick some good companies, and all 5 that we picked in 2015 and 2016 made it possible for us to double the portfolio value in an average of 13 months.  

These 5 companies were Costco (COST), Starbucks (SBUX), Nike (NKE), Facebook (FB), and Johnson & Johnson (JNJ). Each of these companies moved up nicely for us, and our portfolios gained many times the percentage gains in the stock.

Unfortunately, after we doubled the portfolio values of each of these underlying stocks, many of their prices tumbled, and we lost much of what we had gained.  This caused us to de-emphasize using the 10k Strategy for 2017 and beyond, and now only two of our portfolios employ that strategy. These portfolios trade options on FB and MasterCard (MA).

From 2013 through 2016, we also carried out portfolios which used a strategy of picking companies we liked (or Exchange Traded Products, ETPs), and selling long-term vertical credit spreads on them.  These portfolios averaged over 40% gains per year over this period, and because of this success, we shifted most of our portfolios to this strategy at the beginning of 2017.

We carry out portfolios with differing risk levels.  Our most conservative portfolio picks several blue chip companies which pay high dividends (which help protect against a big price drop), and set up option spreads which will make profits just as long as the stock does not fall more than about 10% for the year.  This portfolio is designed to gain 30% for the year.

Other portfolios are designed to gain 40% - 50% per year, but the underlying stock or ETPs must do a little better than falling 10% to make those gains. Many portfolios will make these numbers as long as the stock ends up the year at any higher price than where it starts out.

As this is being updated six weeks into 2017, all 9 portfolios are showing nice gains for the year.  The average portfolio has gained 17.6% for the first six weeks of the year, which is well above our original goals.  Annualized, this gain works out to over 150% per year.  While we don’t expect to be able to continue these wonderful results for the entire year, we are surely off to a good start toward achieving the goals we have set up for each portfolio.

The Long-Term Track Record at Terry's Tips

 

Terry’s Tips has operated sample option portfolios since 2003 for their subscribers to follow or mirror in their own accounts. These portfolios are actual portfolios, and results include all commissions that an investor would pay at thinkorswim, Inc. by TD Ameritrade. Many option newsletters conveniently (for them) do not include commissions in their performance numbers. This makes their results look a lot better than they actually are because commissions are a significant cost of trading options (unlike stock trading which involves much lower commissions).

 

In most of these years, the option portfolios have beaten the market averages by a very large margin. In some years, the portfolios have incurred losses similar to the magnitude of the market losses.

 

Option trading involves leverage, and leverage works in both directions. Gains (and losses) are often greater than changes in the market. However, we have tried to minimize the losses in down years so that our losses are less than those of the markets in general, and to enjoy greater gains than the markets in good years. Most of the time, we have been successful in carrying out these goals.

 

Terry's Tips Stock Options Trading Blog

February 20, 2017

Using Investors Business Daily to Create an Options Strategy

Today I would like to share an idea that we are using in one of our Terry's Tips’ portfolios. We started this portfolio on January 4, 2017, and in its first six weeks, the portfolio has gained 30% after commissions. That works out to about 250% for the whole year if we can maintain that average gain (we probably can’t keep it up, but it sure is a good start, and a positive endorsement for the basic idea).

Terry

Using Investors Business Daily to Create an Options Strategy

IBD publishes a list which it calls its Top 50. It consists of companies which have a positive momentum. Our idea is to check this list for companies that we particularly like for fundamental reasons besides the momentum factor. Once we have picked a few favorites, we make a bet using options that will make a nice gain if the stock stays at least flat for the next 45 – 60 days. In most cases, the stock can actually fall a little bit and we will still make our maximum gain.

The first 4 companies we selected from IBD’s Top50 list were . . .

February 5, 2017

An Update on Our Last Trade and a New One on AAPL

About a month ago, I suggested an options spread on Aetna (AET) that made a profit of 23% after commissions in two weeks. It worked out as we had hoped. Then, two weeks ago, I suggested another play on AET which would make 40% in two weeks (ending last Friday) if AET ended up at any price between $113 and $131. The stock ended up at $122.50 on Friday, and those of us who made this trade are celebrating out 40% victory. (See the last blog post for the details on this trade.)

Today, I am suggesting a similar trade on Apple (AAPL). It offers a lower potential gain, but the stock can fall in price by about $9 and the gain will still come your way.

Terry

An Update on Our Last Trade and a New One on AAPL

This trade on APPL will only yield about 30% after commissions, and you have to wait six months to get it, but the stock can fall over $8 during that time, and you would still make your 30%.

January 20, 2017

Another Interesting Short-Term Play on Aetna (AET)

Ten days ago, I sent you a note showing how you could make 23% on an options spread on Aetna (AET) if the stock closed at any price above $118 today. Back then, it was trading at $122.67. The day is not yet over right now, but AET is trading at $122 with an hour to go until closing, so it seems safe to say that the 23% will be enjoyed by everyone who placed the trade.

Today, I would like to suggest another trade on AET that will end two weeks from today. It will make 40% on . . .

Making 36%

Making 36% – A Duffer's Guide to Breaking Par in the Market Every Year in Good Years and Bad

This book may not improve your golf game, but it might change your financial situation so that you will have more time for the greens and fairways (and sometimes the woods).

Learn why Dr. Allen believes that the 10K Strategy is less risky than owning stocks or mutual funds, and why it is especially appropriate for your IRA.

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