The Terry's Tips 2017 Track Record Final Results
The year has ended, and it is time to record the results for 2017. The composite average of our 10 portfolios gained 113% for 2017, just about the best year we have enjoyed in our 16 years of publishing Terry’s Tips. Only one portfolio (Honey Badger) lost money (and it covered the entire loss for the year in the first week of 2018).
• Boomer’s Revenge – (restarted with $5000 on 1/22/18 after withdrawal of $2797) – 56% gain for 2017
• Capstone Cascade – (restarted with $10,000 on 1/2/18 after withdrawal of $4836) – 48% gain for 2017
• Contango (our only portfolio not available for Auto-Trade – restarted with $5000 on 1/2/18) – 138% gain for 2017
• Earnings Eagle (started with $5000 on 6/7/17) – 31% gain over last 6 months of 2017
• Galloping Turtle (restarted with $5000 using new strategy on 11/20/17 after withdrawal of $3960) – 79% gain for 2017
• Honey Badger (restarted with $5000 using a new strategy on 12/26/17) – 48% loss for 2017 (fully recovered in the first week of 2018)
• Leaping Leopard (restarted on 12/26/17 with $5000 after withdrawal of $2001) – 40% gain for 2017
• Rising Tide (restarted on 1/2/18 with $5000 after withdrawal of $7615) – 152% gain for 2017
• Vista Valley (restarted in 2018 after VXX reverse split is carried out with $5000 after withdrawal of $5058) – 101% gain for 2017
• Wiley Wolf (restarted on 11/8/17 with $5000 after $19,840 withdrawal) – 728% gain for 2017
Each of the above portfolios is carried in a separate brokerage account and include all commissions. 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 at Terry's Tips, we disclose every trade and every position for every portfolio at all times.
All results include commissions at the standard rate charged by thinkorswim for Terry's Tips subscribers. Many newsletters conveniently (for them) do not include commissions when they report their trading results. By the way, our subscription rates are considerably less than just about any other options newsletter.
While we can’t promise that future years will be anywhere near as profitable as 2017 has been for us, we do believe that the basic strategies that we have developed can consistently deliver far greater returns than any conventional investments that we know of.
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 19, 2019
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum. The actual portfolio carried out at Terry’s Tips which trades these spreads has gained 134% in the first six weeks of 2019, making it our most profitable portfolio so far this year. (It also gained over 100% in 2018.) Of course, past results can’t be guaranteed to repeat themselves, but we do feel pretty good about these kinds of spreads, at least when the overall market is moving higher.
Terry
Monolithic Power Systems (MPWR) Marches Higher Following Their Earnings Report
Monolithic Power Systems’ stock price has risen steadily since bottoming in late December and several analysts expect more upside, take a look at these two articles to see what the appeal is – Don’t Miss This Stock: Monolithic Power Systems and ROE & Quant Signals Under the Lens For Monolithic Power Systems.
MPWR has made some important technical breaks over the past few weeks to reaffirm its bullish trend. First was a sustained push back above the 200-day moving average. Second was when it climbed over a horizontal level near $132 that has been well respected since last summer as both support and resistance. The significance of this level can be seen on a daily chart but perhaps more clearly on a weekly chart. In the past week the stock made a determined push above the level, taking out the November high at the same time to trade at a fresh 5-month high. A hurdle is seen around $142 and a break of the level would suggest MPWR is headed for record highs.
[caption id="attachment_2338" align="alignnone" width="300"]
MPWR Chart February 2019[/caption]
*source Tradingview.com
If you agree there's further upside ahead for MPWR, consider this trade which is a bet that the stock will continue to advance over the next four weeks, or at least not decline very much.
Buy To Open MPWR 15MAR19 130 Puts (MPWR190315P130)
Sell To Open MPWR 15MAR19 135 Puts (MPWR190315P135) for a credit of $1.23 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when MPWR was trading near $138. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers). Each contract would then yield $120.50 and your broker would charge a $500 maintenance fee, making your investment $379.50 ($500 – $120.50). If MPWR closes at any price above $135 on March 15, both options would expire worthless, and your return on the spread would be 32% (467% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
[caption id="attachment_2339" align="alignnone" width="238"]
IBD Underlying Updates February 14, 2019[/caption]
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
Read Full Article
February 10, 2019
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum. Our actual portfolio carried out at Terry’s Tips which trades these weekly ideas has gained 114% in the first five weeks of 2019. This portfolio also made over 100% in 2018 and we withdrew the starting investment amount so that we are playing entirely with profits at this time. Of course, there is no certainty that we can duplicate this success in the future, but we feel pretty good about our prospects.
Terry
Can Microchip Technology (MCHP) Maintain its Post-Earnings Momentum?
Microchip Technology saw its stock price rally just over 10% prior to pulling back as investor optimism grew following their earnings report in the past week. Just to be clear, the report was not as upbeat as expected. Actually, the stock had turned down initially, but it was a prediction from the company Chief Executive that caused investors to change their view and start buying. It’s a rather interesting turn of events and the following two articles explain why the markets have put so much weight to his prediction, and why the stock may continue to rise from here – Microchip’s stock soars after CEO calls for a bottom, and he’s been right before and Microchip: A Bottom Is Possibly In.
The push higher following earnings led to a signifcant technical break as the stock was pressed against a confluence of resistance prior to it. Resistance comes from the 200-day moving average as well as a declining trendline drawn from the June top. The stock price has pulled back a bit from horizontal resistance found at $89.20 that was a prior low and prior resistance following a gap down last summer. Support is found just above $85. In the even the support level does not hold, stronger support is found at the prior breakout point. Considering the significance of the technical break, bulls are likely to defend any dips in the near-term.
[caption id="attachment_2333" align="alignnone" width="300"]
MCHP Chart February 2019[/caption]
*source Tradingview.com
If you agree there's further upside ahead for MCHP, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.
Buy To Open MCHP 15MAR19 85.00 Puts (MCHP190315P85.00)
Sell To Open MCHP 15MAR19 87.50 Puts (MCHP190315P87.50) for a credit of $1.10 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when MCHP was trading near $87.50. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers). Each contract would then yield $355.50 and your broker would charge a $1000 maintenance fee, making your investment $644.50 ($1000 – $355.50). If MCHP closes at any price above $87.50 on March 15, both options would expire worthless, and your return on the spread would be 55% (627% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
[caption id="attachment_2334" align="alignnone" width="181"]
IBD Underlying Updates February 7, 2019[/caption]
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
Read Full Article
February 3, 2019
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
Terry
PayPal (PYPL) Dips After Earnings, Is it a Buy?
After briefly piercing to record highs, PayPal stock declined following its earnings report in the past week. Is the dip a buying opportunity? The following article provides some solid arguments for why it is – Buy the Dip in Paypal Stock Because $100 Is the Next Stop. Also an article recently published on The Motley Fool makes a compelling argument for growth on the back of rising popularity and potential for PayPal’s app Venmo. In the article, the company’s CEO was quoted as saying the P2P payment app could potentially surpass PayPal’s payment system in profitability – The Big News in PayPal’s Fourth-Quarter Update.
Aside from chart patterns, a significant appeal to PYPL is that it touched record highs this month, fully erasing the prior decline. Not only that, it was the first IBD Top 50 listed stock to do so while most have only recovered a part of the fall that took place late in 2018. In this context, it is certainly an outperformer. Support is found at $87.55 as a horizontal level there has previously acted as both support and resistance dating back to June last year. Note that this level was a major barrier in the fourth quarter. On a weekly chart, the 20-week moving average was the equivalent barrier for Q4. It currently falls near $85.50 to provide additional support in the event of further near-term downside. Just above it, the 50-day moving average is found, currently at $86.14.
[caption id="attachment_2329" align="alignnone" width="300"]
PYPL Chartl February 2019[/caption]
*source Tradingview.com
If you agree there's further upside ahead for PYPL, consider this trade which is a bet that the stock will continue to advance over the next six weeks, or at least not decline very much.
Buy To Open PYPL 15MAR19 87.5 Puts (PYPL190315P87.5)
Sell To Open PYPL 15MAR19 90 Puts (PYPL190315P90) for a credit of $0.95 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when PYPL was trading near $90. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers). Each contract would then yield $92.50 and your broker would charge a $250 maintenance fee, making your investment $157.50 ($250 – $92.50). If PYPL closes at any price above $90 on March 15, both options would expire worthless, and your return on the spread would be 59% (552% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
[caption id="attachment_2330" align="alignnone" width="196"]
IBD Underlying Updates February 1, 2019[/caption]
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
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