from the desk of Dr. Terry F Allen

Skip navigation

Member Login  |  Contact Us  |  Sign Up


The Terry's Tips Track Record


The First Half of 2014 Track Record at Terry's Tips

We currently carry out 10 portfolios at Terry’s Tips.   Paying subscribers can follow the results of all 10 (some newsletters only reveal their winning portfolios to all subscribers).  The composite average gains for all 10 portfolios achieved more than triple the market (S&P 500) for the first six months of 2014.  The average was pulled down significantly by a portfolio we had set up to do the inverse of our basic strategy (in all of the other portfolios, we essentially sell short-term options using longer-term options as collateral – in the big losing portfolio, we purchased short-term options because option prices were so low, hoping in vain that volatility would increase).

Going into 2014, option prices had fallen to multi-year lows.  Our basic strategy, selling short-term options (for the most part, on SPY, the S&P 500 tracking stock) did not look so promising because of the unusually low option prices.  In February 2014, we switched the underlying for our 10K Classic portfolio from SPY to a volatility-related ETP which offered extremely high option prices.  Over the next five months this portfolio gained 60%.

We also switched to this new ETF for two other portfolios. One, trading weekly options, started in April, and by mid-year had gained 35%.  Another portfolio involved buying the stock and writing long-term options against it.  We think it is the easiest and surest way to make 30% almost every year.  At the half-way point of 2014, the stock could fall by 30% by the end of the year and the portfolio would still gain 30%.

One portfolio has been set up to make long-term bets that a particular underlying would not fall in value over the course of 2014.  One of the choices was Google (GOOG), a stock which had moved higher in 9 of its 10 years in existence.  With the spread we placed, if it ends up 2014 at any higher than where it started, we would earn 100% on our investment.  At the half-way point, the stock is comfortably higher than where it started (the 3-stock portfolio had gained 47% by the end of June).

Three of our portfolios are bets on individual stocks, demonstrating that an options portfolio can outperform the outright purchase of stock by a wide margin. One portfolio gained 36% while the stock rose 23% (a disappointing result brought about by some unwanted volatility).  Another portfolio composed of two coffee companies has picked up 17%, a gain dragged down by one company only moving 1.3% higher over the six months.

During the first six months of 2014, there were two losing portfolios out of 10.  One tried the inverse of our basic strategy as mentioned above, and the other bet on an underlying that fell from $125 to $110 during the six months, and the portfolio understandably fell in value.

Our Contango portfolio does not trade options, but rather buys volatility-related ETFs which have doubled in value in each of the last two years.  At times when we believe volatility might surge, we unload these shares until the outlook settles down.  This portfolio was set up in November 2013 and had gained 44% over the next 8 months.

When we switched our favorite underlying to the new ETF, we retained SPY (trading monthly options) for one portfolio.  Since this portfolio was established in November 2013, it had gained 68% by the end of June 2014.

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 2003, two actual Terry’s Tips portfolios racked up an 80% average gain for the year. However, 2004 was awful, and most of the previous year’s gains were lost. This experience caused a dramatic change in the strategy.


The 10K Strategy


We called our new way of options investing the 10K Strategy (it is not a marathon nor a sprint, but somewhere in between). The 10K Strategy had three consecutive years where the portfolios outperformed the market by a large margin. In fact, the average gains were over 50% for a 3-year period (2005. 2006, 2007). However, in the market crash in the fall of 2008 our portfolios fell by approximately the same amount as the market in general (our most popular portfolio managed to make a small gain for the last six months of 2008, however).

Shoot Strategy Demonstration Portfolio


For several years we have maintained some portfolios which show how options can outperform the purchase of stock in a company that you believe will go up in price. This is an entirely different strategy than the 10K Strategy that we use for our other portfolios (which makes the assumption that we have no idea which way the market will move in the short run).

If you are correct and the stock you choose goes up in value, the Shoot Strategy should produce a much greater percentage gain than the stock makes. If the stock stays flat, a small profit should also be made. If the stock falls a little bit, the portfolio could break even. However, if the stock falls more than a little, the portfolio could incur a greater percentage loss than the stock.

The Shoot Strategy is similar to buying stock on margin in some respects, except that no interest is paid, and the portfolio should make money if the stock stays flat (two features that make this portfolio better than buying stock on margin).

Once Terry’s Tips subscribers see how the Shoot Strategy works, they can conduct it themselves on almost any stock that they believe is headed higher.



For more than 10 years, Terry’s Tips has conducted actual portfolios for paying subscribers to follow (or mirror in their own accounts, or have trades placed for them through Auto-Trade at thinkorswim, Inc. by TD Ameritrade). 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

December 4, 2014

Further Discussion on an Options Strategy Designed to Make 40% a Month

Last week we outlined an options play based on the historical fluctuation pattern for our favorite ETP called SVXY. This week we will compare those fluctuations to the market in general (using the S&P 500 tracking stock, SPY, as the market definition). We proposed buying a vertical call spread for a one-month-out expiration date with the lower strike about 6% above the starting stock price.

The results were a little unbelievable, possibly gaining an average of 65% a month (assuming the fluctuation pattern continued into the future). If you used an outside indicator to determine which months were more likely to end up with a winning result, you would invest in just under half the months, but when you did invest, your average gain might be in the neighborhood of 152%. Your average monthly gain would be approximately the same if you only invested half the time or all the time, but some people like to increase the percentage of months when they make gains (the pain of losing always seems to be worse than the pleasure of winning).

This week we will offer a second way to bet that the stock will rise by 12.5% in about 38% of the months (as it has in the past). It involves buying a calendar spread rather than a vertical call spread (and sort of legging into a long call position as an alternative to the simple purchase of a call).


Further Discussion on an Options Strategy Designed to Make 40% a Month:

First. Let’s compare the monthly price fluctuations of SPY and SVXY. You will see that they are totally different. . . .

November 28, 2014

An Options Strategy Designed to Make 40% a Month

I hope you had a wonderful Thanksgiving with your family and/or loved ones, and are ready for some exciting new information. Admittedly, the title of this week’s Idea of the Week is a little bizarre. Surely, such a preposterous claim can’t possibly have a chance of succeeding. Yet, that is about what your average monthly gain would have been if you had used this strategy for the past 37 months that the underlying ETP (SVXY) has been in existence. In other words, if the pattern of monthly price changes continues going forward, a 40% average monthly gain should result (actually, it would be quite a bit more than this, but I prefer to underpromise and over-deliver). Please read on.

We will discuss some exact trades which might result in 40%+ monthly gains over the next four weeks. I hope you will study every article carefully. Your beliefs about options trading may be changed forever.


An Options Strategy Designed to Make 40% a Month: First of all, we need to say a few words about our favorite underlying, SVXY. It is not a stock. There are no quarterly earnings reports to push it higher or lower, depending . . .

November 17, 2014

An Interesting Way to Invest in China Using Options

A week ago, I reported on a spread I placed in advance of Keurig’s (GMCR) announcement which comes after the market close on Wednesday. I bought Dec-14 140 puts and sold Nov-14 150 puts for a credit of $1.80 when the stock was trading just under $153. The spread should make a gain if it ends up Friday at any price higher than $145. You can still place this trade, but you would only receive about $1.15 at today’s prices. It still might be a good bet if you are at all bullish on GMCR.

Today I would like to discuss a way to invest in China using options. One of our basic premises at Terry’s Tips is that if you find a company you like, you can make several times as much trading options on that company than you can just buying the stock (and we have proved this premise a number of times with a large number of companies over the years). If you would like to add an international equity to your investment portfolio, you might enjoy today’s discussion.


An Interesting Way to Invest in China Using Options: My favorite print publication these days is

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.

Order Now

Sign Up Your 2 Free Reports & Our Newsletter Now!

Sign up for Dr. Terry F Allen’s free newsletter and get immediate access to his most current report on his stock option trading strategies.

TD Ameritrade

Member Login  |  Programs and Pricing  |  Testimonials  |  About Us  |  Legal Notices  |  Accessibility Statement  |  Privacy Policy  |  Site Map

thinkorswim, Division of TD AMERITRADE, Inc. and Terry’s Tips are separate, unaffiliated companies and are not responsible for each other's services and products.

©Copyright 2001–2014 Terry's Tips, Inc. dba Terry's Tips

Close Window

Sign up for the Terry’s Tips Free Newsletter and Receive 2 Options Strategy Reports:


Login to Your Existing Account Now

No Thanks

Newsletter Signup

Member Login

Enter your primary email below, and we'll send you a new password