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The Terry's Tips Track Record

 

The Terry's Tips 2016 Track Record for the First Seven Months

We currently carry out 11 portfolios at Terry’s Tips.   Paying subscribers can follow the results of all 11 (some newsletters only reveal their winning portfolios to all subscribers). 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).

Four of our portfolios are based on underlying stocks we like.  Our portfolio based on Costco (COST) was started in June of 2013 and gained 197% through September of 2015 while the stock rose 31%.  Our Starbucks (SBUX) options trading gained 195% for the first 9 months of 2015 while the stock rose 43%. Our portfolio based on Nike (NKE) was started in July of 2013 and gained 138% since then while the stock has gained 32%.  Our portfolio based on Facebook (FB) was started with $6000 in October 2015 and was worth just under $10,000 at the end of July 2016, eight months after its start.  This is the only one of the four portfolios that has not yet doubled in value, but a full year has not yet elapsed.

We set up a new $5000 portfolio to trade options on Johnson & Johnson (JNJ) in November 2015 and in July 2016, eight months later, the portfolio was worth over $10,000 and we declared a 2-for-1 split so that new subscribers could follow the portfolio for a starting investment of $5000.

Two of our portfolios are not available for Auto-Trade, but they are easy to follow on your own because they involve making a single trade at the beginning of the year and just waiting for the year to elapse.  These portfolios are designed for the options to expire worthless at the end of the year so no closing trades are necessary.  One of these portfolios will make 45% in 2016 if Facebook (FB) closes at any price above $105 (current price about $124) and Johnson & Johnson (JNJ) closes above $95 (current price about $125).  Both stocks could fall by a large amount and the full 45% gain will materialize.

We have been running the second of these portfolios for three years.  In 2014, it gained 20%.  While this was disappointing for us, it was still a lot better than most conventional investments.  In 2015, it gained 31%.  Through July of 2016, the portfolio had gained 52% and was on target to make 71% after commissions for the year (this gain will come about if the underlying stock (a volatility-based ETP) is at any price above $30, and it was at $65 at the end of July, so the 71% seems to be a sure thing for 2016).

Paying subscribers can choose to follow any (or none) or all of eight actual portfolios, either on their own or through Auto-Trade.  Some of our portfolios have specific goals.  One is a bearish portfolio that is designed to protect against other stock investments a subscriber might have.  This portfolio was started in June 2016 and has lost money since the market has risen steadily since it was started.  Another is based on the price of oil eventually recovering, it has also lost money in 2016 because the price of oil has fallen since we started the portfolio (the long positions in this portfolio don’t expire until 2018 so we have plenty of time to recover our losses).

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

December 5, 2016

Comparing Calendar and Diagonal Spreads in an Earnings Play

Last week, in one of our Terry’s Tips portfolios, we placed calendar spreads with strikes about $5 above and below the stock price of ULTA which announced earnings after the close on Thursday. We closed out our spreads on Friday and celebrated a gain of 86% after commissions for the 4-day investment. It was a happy day.

This week, this portfolio will be making a similar investment in Broadcom (AVGO) which announces earnings on Thursday, December 8. I would like to tell you a little about these spreads and also answer the question of whether calendar or diagonal spreads might be better investments.

Terry

Comparing Calendar and Diagonal Spreads in an Earnings Play

Using last Friday’s closing option prices, below are the risk profile graphs for Broadcom (AVGO) for options that will expire Friday, December 9, the day after earnings are announced. Implied volatility for the 9Dec16 series is 68 compared to 35 for the 13Jan17 series (we selected the 13Jan17 series because IV was 3 less than it was for the 20Jan17 series). The graphs assume that IV for the 13Jan17 series will fall from 35 to 30 after the announcement. We believe that this is a reasonable expectation.

December 2, 2016

Update on Oil Trade (USO) Suggestion

On Monday, I reported on an oil options trade I had made in advance of OPEC’s meeting on Wednesday when they were hoping to reach an agreement to restrict production. The meeting took place and an agreement was apparently reached. The price of oil shot higher by as much as 8% and this trade ended up losing money. This is an update of what I expect to do going forward.

Terry

Update on Oil Trade (USO) Suggestion

Several subscribers have written in and asked what my plans might be with the oil spreads (USO) I made on Monday this week. When OPEC announced a deal to limit production, USO soared over a dollar and made the spreads at least temporarily unprofitable (the risk profile graph showed that a loss would result if USO moved higher than $11.10, and it is $11.40 before the open today). I believe these trades will ultimately prove to be most profitable, however.

November 29, 2016

Benefiting From the Current Uncertainty of Oil Supply

The price of oil is fluctuating all over the place because of the uncertainty of OPEC’s current effort to get a widespread agreement to restrict supply. This has resulted in unusually high short-term option prices for USO (the stock that mirrors the price of oil). I would like to share with you an options spread I made in my personal account today which I believe has an extremely high likelihood of success.

Terry

Benefiting From the Current Uncertainty of Oil Supply

I personally believe that the long-run price of oil is destined to be lower. The world is just making too much of it and electric cars are soon to be here (Tesla is gearing up to make 500,000 next year and nearly a million in two years). But in the short run, anything can happen.

Meanwhile, OPEC is . . .

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