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The Terry’s Tips Track Record

Five-Year Track Record

Year Gain/Loss
2017 +113%

2018 -40%
2019 +103%
2020 +122%

2021 -2%
Average Year: +59%

Early 2022 Track Record

The extreme market volatility that existed in late 2021 continued into 2022 and most of the big moves were on the downside, two things that negatively impact the success of our 10K Strategy. This caused us to make some modifications on the way we carried out our weekly trades.

First, we have held about half our investment in cash so that when IVs fall to historically lower levels, (as they inevitably will) we won’t be crushed by our long positions falling so much.  Second, we have resisted the temptation to adjust every time the market surges one way or the other.  It usually reverses itself shortly after big moves in either direction.  And finally, we have maintained about half the portfolios in a delta-negative position so if the market does fall, some of them will do well.

The bottom line is that the composite gain for all four portfolios was over 10% for the first 13-week quarter of 2022.  During this period, the market (S&P 500) was down 18% and the Nasdaq fell 22%.  Considering we have held half our investment in cash, we have gained about 20% on the amount at risk. In any event, we have outperformed the underlying averages by a wide margin, so the 10K Strategy (with our recent modifications) seems to be handling this unusual volatility quite well.

Track Record for 2021

We carried out our 10K Strategy with 4 portfolios in 2021, each trading options on a separate underlying stock or ETF. For the first nine months of the year, weekly volatility of our underlying stocks or ETFs was higher than the option prices could support, and we incurred lower-than-usual returns or in some cases, losses. However, with three months to go, our composite portfolio average was above 20% for the year. Then volatility soared, and extended into 2022. Our final results were a disappointing loss of 2.4% for the year, as reported in our January 1, 2022 Saturday Report sent to subscribers:

PortfolioStock Start Current  Change     % 
   Value Value  
Boomers RevengeIWM       10,000      9,454   -546– 5.5%
Honey BadgerQQQ       10,000     11,350   +1,350 +13.5%
Rising TideCOST       10,000     7,566    -2,434 -24.3%
Wiley WolfMSFT       10,000     10,664     +664 +6.6%
  Totals        40,000     39,034     -966 -2.4%

Track Record for 2020 

We carried out our 10K Strategy with 5 portfolios in 2020, each trading options on a separate underlying stock or ETF.  During the year, we dropped one of the portfolios when the underling became too volatile for the options prices to handle, and we suffered a 50% loss on that portfolio.  

The other four 10K Strategy portfolios prospered, however, and chalked up an average gain of 122% for all 5 portfolios.  This record meant that in 3 of the past 4 years, our 10K Strategy portfolios have enjoyed average annual gains of over 100%.

At the end of 2020, three portfolios – Wiley Wolf (MSFT), Rising Tide (COST), and Earnings Eagle (TGT) – all more than tripled in value, led by the Wolf’s quadruple (this portfolio started out 2020 with $10,000 and ended up the year with $40,934 (after paying all commissions).

Track Record for 2019  

Our results for 2019 were extraordinary.  It was a good year for the market in general.  The S&P 500 (SPY) gained about 29%.  Just about any equity investment probably made money.  However, the average gain for our 10K Strategy portfolios exceeded 103%, or well more than 3 times as great as the market as a whole.   

Track Record for 2018

The success of the 10K Strategy is dependent on selecting underlying stocks or ETFs that stay flat or move higher.  The year 2018 was the only year in the past 10 years when the market fell during the calendar year.  This was especially true in the last quarter when prices fell across the board.  Our 10K Strategy portfolios all lost money in 2018, a dramatic difference from 2017 when the composite average portfolio gained over 113%.  Our worst 2018 performer was based on Facebook (FB). FB fell from a high of over $218 to end at $135, a drop of 38%.  Our portfolio lost over 90%, a huge reversal from the 700%+ gain that it had enjoyed in 2017 (see below).  

We carried out ten portfolios in 2018, many of which were experiments with strategies totally different from the basic 10K Strategy that has become the only strategy that we currently use. It was a down year for the market, and our composite loss for the year was 39.9% after culling out the portfolios which bore no resemblance to our basic strategy or which did not operate for the entire year.

The Terry’s Tips 2017 Track Record 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).

Each of our portfolios is carried in a separate brokerage account and include all commissions. We currently carry out four portfolios at Terry’s Tips is available for Auto-Trade at Tradier or TastyWorks (so you can follow a portfolio and never have to make a trade on your own).    All of these portfolios can be carried out inside an IRA.   Paying subscribers can follow the results of all the 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 Tradier 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.

Earlier Years Results

Terry’s Tips has carried out actual portfolios for subscribers to follow (or auto-trade if they wished) since 2003. 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. Of course, we must remind everyone that past performance is no guarantee that future results will be as great as they have been in the past, in spite of our expectations that they will do just that.

TERRY’S TIPS STOCK OPTIONS TRADING BLOG

June 20, 2022

Roku (ROKU) is a stock many believe is in play as a takeover candidate. Netflix and Disney are potential suitors, among others. Whatever the rumor or sentiment, the stock has been flat for the past seven weeks, which is saying something. In fact, since April 27, ROKU is down 2.7% while QQQ has fallen more than 13%.

There’s no denying that ROKU has been a spectacular flop for the past year. The shares are down a whopping 83% from their July 2021 high. But the stock has held up well over the past couple of months with takeover rumors in the air. It may not be advancing, but it’s not falling either. Moreover, the stock appears to have found solid support in the 72-73 area, the site of a two-year low.

One way to see how the market feels about a stock is by looking at equidistant out-of-the-money put and call prices. Currently, calls are trading for more than their corresponding puts, suggesting that the market sees more risk to the upside. That is highly unusual in this market, where most everything has richer put prices. We are therefore trading a put credit spread with the short put strike below the recent two-year low level. 

If you agree that ROKU is in play and will continue sideways at worst, consider the following trade that relies on the stock staying above $70 through expiration in six weeks. Note that ROKU is scheduled to report earnings the day before expiration.

Buy to Open ROKU 29Jul 65 put (ROKU220729P65)
Sell to Open ROKU 29Jul 70 put (ROKU220729P70) for a credit of $1.50 (selling a vertical)

This credit is $0.05 less than the mid-point of the option spread when ROKU was trading at $82.42. Unless the stock surges quickly from here, you should be able to get close to this amount.

Your commission on this trade should be no more than $1.30 per spread.  Each spread would then yield $148.70. This trade reduces your buying power by $500 and makes your net investment $351.30 ($500 – $148.70) for one spread.  If ROKU closes above $70 on July 29, both options will expire worthless and your return on the spread would be 42% ($148.70/$351.30).

November 22, 2021

Target
(TGT) reported earnings before the bell on Wednesday that beat estimates on
both revenue and profits. The company also expects its fiscal Q4 comparable
sales growth to be higher than previous forecasts. Moreover, TGT claimed the
supply chain mess has not been an issue – store shelves are full and ready for
the holiday buying onslaught.

Analysts
were mostly bullish on the report, giving TGT several target price increases
(there was one lower price). One went as high as $350, a 38% premium to
Friday’s closing price. The stock price was not rewarded, however. The shares
dropped 4.7% on Wednesday and slid further the rest of the week. However, this
was a common theme among several retailers, including Walmart (WMT). In fact,
the overall retail sector was lower for the week.

The pullback dropped the shares to just above their 50-day moving average (blue line in chart). This trade is thus a bet that TGT will regain its footing and stay above the 50-day as holiday sales numbers – that are predicted to be robust – start rolling in. The short 245 strike (red line) of our put credit spread is below the 50-day, relying on trendline support to hold through expiration.

If
you agree that TGT will stay atop its 50-day moving average line in chart),
consider the following trade that relies on the stock remaining above 245  (through expiration in six weeks.

Buy
to Open TGT 31Dec 240 put (TGT211231P240)
Sell to Open TGT
31Dec 245 put (TGT211231P245) for a credit of $1.60 (selling a vertical)

This
credit is $0.02 less than the mid-point
of the option spread when TGT was trading around $251. Unless the stock rises
quickly from here, you should be able to get close to this amount.

Your
commission on this trade will be only $1.30 per spread.  Each spread would then yield $158.70. This
trade reduces your buying power by $500 and makes your net investment $341.30
($500 – $158.70) for one spread.  If TGT
closes above $245 on December 31, both options will expire worthless and your return on the spread would
be 46% ($158.70/$341.30).

November 15, 2021

Affirm
Holdings (AFRM) provides a platform for point-of-sale payments for consumers
and merchants. In August, AFRM announced a partnership with Amazon.com (AMZN)
to offer flexible payment solutions to customers with AMZN purchases above $50.
AFRM reported earnings on Wednesday after the bell that missed on profits but
beat on revenue. The company also raised sales guidance.

Wall
Street apparently forgave the earnings miss, largely because it was not clear
if the discrepancy used comparable numbers. Moreover, AFRM said its AMZN
relationship as a buy-now-pay-later service was exclusive. Clearly, analysts
were looking at AFRM’s growth prospects, as the company was greeted with
several target price upgrades that reached as high as $185 (the stock closed at
$149 on Friday).

After a nasty, four-day 21% plunge heading into earnings that pulled the stock to its 50-day moving average, the stock rebounded 13.7% the day after the earnings news. Given the earnings rebound, analyst target upgrades and deal with AMZN, we are going with a bullish trade on AFRM that keys on the stock maintaining its three-month rally and staying atop its 50-day moving average (blue line in chart). The short put strike of our credit spread sits at $133 (red line in chart), just below the 50-day.

If
you agree that AFRM will continue its uptrend and stay atop its 50-day moving
average line in chart), consider the following trade that relies on the stock
remaining above $133  (through expiration
in seven weeks.

Buy
to Open AFRM 31Dec 128 put (AFRM211231P128)
Sell to Open AFRM 31Dec
133 put (AFRM211231P133) for a credit of $1.85 (selling a vertical)

This
credit is $0.05 less than the mid-point
of the option spread when AFRM was trading at $149. Unless the stock rises
quickly from here, you should be able to get close to this amount.

Your
commission on this trade will be only $1.30 per spread.  Each spread would then yield $183.70. This
trade reduces your buying power by $500 and makes your net investment $316.30
($500 – $183.70) for one spread.  If AFRM
closes above $133 on December 31, both options will expire worthless and your return on the spread would
be 58% ($183.70/$316.30).

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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