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The Terry’s Tips Track Record

Five-Year Track Record

YearGain / Loss
2017+113%
2018-40%
2019+103%
2020+122%
2021-2%
Average per year+59%

YTD 2022 Track Record – We Crushed the Market Averages!

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 8.4% through October 15, 2022.  During this period, the market (S&P 500) was down 25% and the Nasdaq has dropped over 38%. Clearly, we have outperformed the underlying averages by a wide margin. The 10K Strategy (with our recent modifications) has handled this falling market and unusually high volatility quite well. We have not enjoyed the near-60% annual gains we have averaged over the last five years, but very few investors have matched our results for 2022. Have you? Would you be happy if your investment portfolio had gained 8.4% for the first nine months of 2022?

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 rose to extreme levels. 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%
2021 Results

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). This result shows how absurdly successful our strategy can be when the market edges higher and volatility is muted throughout the year. Fortunately, this is the pattern for most market years.

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

January 24, 2023

January 24, 2023

Dear [[firstname]],

Here is your Option Trade of the Week, as given to our Terry’s Tips Insider Members as part of the Saturday Report. With earnings season underway, we’re back to our typical earnings plays with a return to the bearish side.

Before getting to the trade, there’s still time to jump on our huge discount offer to join Terry’s Tips as an Insider Member that lets you trade up to four portfolios. These portfolios use our proprietary 10K Strategy, which has generated average annual gains of 60% for the past five years in actual brokerage accounts (including all commissions).  In 2022, our portfolios beat their underlying stock performance by an average of 22%

We’re still running a special new-year sale that saves you more than 50% on a monthly subscription to Terry’s Tips. For just $98, you’ll get:

  • A month of all trade alerts in our four portfolios, giving detailed instructions for entering and exiting positions.
  • Four to five (depending on the month) weekly issues of our Saturday Report, which shows all the trades and positions for our four portfolios, a discussion of the week’s trading activity and early access to our Option Trade of the Week.
  • Instructions on how to execute the 10K Strategy on your own.
  • A 14-day options tutorial on the opportunities and risks of trading options.
  • Our updated 10K Strategy white paper, a thorough discussion of the strategy basics and tactics.
  • Full-member access to all our premium special reports that can make you a wiser and more profitable options trader. 

To become a Terry’s Tips Insider Member, just Click Here, select Sign Up Now and use Coupon Code D21M to start a monthly subscription to Terry’s Tips  for half off. You can cancel after a month but, of course, still keep all the valuable reports.

We look forward to having you join us in 2023! Now on to the trade …

Tarnished Goldman

With earnings season now underway, we can focus on companies that have recently reported. Though the docket was sparse this past week, there were a few juicy names to choose from. One was Goldman Sachs (GS), which reported a miserable quarter before the week’s trading began on Tuesday.

Earnings plunged 66% from a year earlier on slower corporate dealmaking and 48% lower investment banking fees. Earnings per share came in at $3.32, far below the expected $5.56. FactSet noted it was the bank’s largest miss in years. Revenue also dropped and missed estimates.

The stock reacted by falling 6.4% on Tuesday, its second-largest one-day, post-earnings decline since April 2009. The week didn’t get any better for GS, as reports came in on Friday that the Federal Reserve is investigating whether the bank had the appropriate safeguards in its consumer business. The stock fell 2.5% on a day when stocks were higher.

The stock’s 8.6% plummet last week pulled it below its 20-day and 50-day moving averages. The 50-day is rolling over into a decline for the first time in three months, while the 20-day appears poised to head lower as well. We are going with a bearish call spread, with the short call strike sitting between the 20-day (blue line) and 50-day (red line) trendlines. However, given the 50-day’s current path, it should fall below this strike and serve as a second potential point of resistance to keep the spread out of the money.

If you agree that GS will continue to struggle, consider the following trade that relies on the stock staying below $360 (green line) through expiration in 6 weeks:

Buy to Open the GS 3 Mar 365 call (GS230303C365)

Sell to Open the GS 3 Mar 360 call (GS230303C360) for a credit of $1.25 (selling a vertical)

This credit is $0.05 less than the mid-point price of the spread at Friday’s $341.84 close. Unless GS falls quickly, you should be able to get close to that price. The commission on this trade should be no more than $1.30 per spread. Each spread would then yield $123.70. This trade reduces your buying power by $500, making your net investment $376.30 per spread ($500 – $123.70). If GS closes below $360 on Mar. 3, both options will expire worthless and your return on the spread would be 33% ($123.70/$376.30).

Any questions?  Email Terry@terrystips.com

Testimonial of the Week

I have been a subscriber for about a year. I autotrade in 2 different accounts, all your strategies. I read everything you write on Saturdays. I love your happiness thoughts and everything else. I usually do not communicate at all but I had to tell you how well my accounts with you are doing compared to everything else. You are awesome. Keep up the good work. Thank you.

~ Maya

Any questions?  Email Terry@terrystips.com.

Thank you again for being a part of the Terry’s Tips newsletter.

Happy trading,

Terry

January 9, 2023

January 9, 2023

Dear [[firstname]],

Here is your Option Trade of the Week, generated by our trading team, for your consideration. We’re going with another ETF this week, but this time back on the bearish side.

Before getting to the trade, there’s still time to jump on our huge discount offer to join Terry’s Tips as an Insider Member that lets you trade up to four portfolios. These portfolios use our proprietary 10K Strategy, which has generated average annual gains of 60% for the past five years in actual brokerage accounts (including all commissions).  In 2022, our portfolios beat their underlying stock performance by an average of 22%

We’re still running a special new-year sale that saves you more than 50% on a monthly subscription to Terry’s Tips. For just $98, you’ll get:

  • A month of all trade alerts in our four portfolios, giving detailed instructions for entering and exiting positions.
  • Four to five (depending on the month) weekly issues of our Saturday Report, which shows all the trades and positions for our four portfolios, a discussion of the week’s trading activity and early access to our Option Trade of the Week.
  • Instructions on how to execute the 10K Strategy on your own.
  • A 14-day options tutorial on the opportunities and risks of trading options.
  • Our updated 10K Strategy white paper, a thorough discussion of the strategy basics and tactics.
  • Full-member access to all our premium special reports that can make you a wiser and more profitable options trader. 

To become a Terry’s Tips Insider Member, just Click Here, select Sign Up Now and use Coupon Code D21M to start a monthly subscription to Terry’s Tips  for half off. You can cancel after a month but, of course, still keep all the valuable reports.

We look forward to having you join us in 2023! Now on to the trade …

Attention Shoppers

With earnings reports non-existent, we’re sticking with ETFs again this week, this time on the bearish side with the retail sector. The SPDR S&P Retail ETF (XRT) is a broad-based, equal-weighted index of around 100 retail stocks. No stock is worth more than 1.5% of the portfolio and the top 10 holdings are littered with small niche names, some of which I’ve frankly never heard of (Sally Beauty, Franchise Group, Leslie’s). Amazon and Costco, on the other hand, make up a mere 2.2% combined.

XRT had a rough 2022, losing about a third of its value. That puts it on par with tech stocks, which it is not, and trailing the broader market. Should we expect a rebound in 2023? I won’t hazard a guess. But we know the Fed will continue to raise rates to tame inflation. Many expect some sort of recession. The outlook appears muddy at best and bearish at worst.

XRT has staged a mini-rally to start 2023, gaining 3.8% in the first week. But the ETF is now bumping into its 50-day moving average. However, the 50-day hasn’t provided much resistance or support for the past several months. Of greater concern is the overhead 200-day moving average, which has been declining for more than a year. This trendline marked a top in August and kept XRT in check in November, allowing just two daily closes above it.

This bearish trade is a play on XRT once again faltering at the 200-day, which sits 3.7% above the Friday closing price. Note that the short call strike of our spread (red line) sits above the 200-day (blue line), meaning this resistance will need to be broken to move the spread into the money. Options traders have a similar outlook, pricing puts higher than equidistant out-of-the-money calls.

If you agree that XRT will fail to overtake the 200-day, consider the following trade that relies on the ETF staying below $66 through expiration in 6 weeks:

Buy to Open the XRT 17 Feb 69 call (XRT230217C69)

Sell to Open the XRT 17 Feb 66 call (XRT230217C66) for a credit of $0.85 (selling a vertical)

This credit is $0.05 less than the mid-point price of the spread at Monday’s $62.46 close. Unless XRT drops quickly, you should be able to get close to that price.

The commission on this trade should be no more than $1.30 per spread. Each spread would then yield $83.70. This trade reduces your buying power by $300, making your net investment $216.30 per spread ($300 – $83.70). If XRT closes below $66 on Feb. 17, both options will expire worthless and your return on the spread would be 39% ($83.70/$216.30).   

Testimonial of the Week

I have been a subscriber for about a year. I autotrade in 2 different accounts, all your strategies. I read everything you write on Saturdays. I love your happiness thoughts and everything else. I usually do not communicate at all but I had to tell you how well my accounts with you are doing compared to everything else. You are awesome. Keep up the good work. Thank you. ~ Maya

Thank you again for being a part of the Terry’s Tips newsletter. Any questions?  Email Terry@terrystips.com

Happy trading,

Terry

January 6, 2023

January 6, 2023

Two and a half years ago, I found myself in the ICU of the University of Vermont Hospital.  I had all the symptoms of Covid even though I had tested negative several times.  My doctor kept saying that the tests had to be false negatives.  Surely, it was Covid, he said.

I checked myself in to the ER of Porter Hospital in Middlebury at midnight on a Friday.  My blood pressure was 65 over 45, and after filling me full of fluids and keeping me awake all night, they couldn’t get that upper reading over 70.

In the morning, they rushed me north to the ICU where they anticipated doing a surgical procedure on my aorta.  They let me make a phone call to Jon Lewis who had been sharing the responsibilities of making the trades in our portfolios.  I told him that he would have to write the Saturday Report that day as well as taking over all the portfolios on Monday.  He said he didn’t think he could do it.  I told him that I surely couldn’t do it, and he was the only one out there who could do it all.

When the test results at the ICU came back, we learned that I did not have Covid after all, and the anti-biotic that they had given me at Porter had saved my life.  Seems that I had a tick-induced disease called Anaplasmosis, and a week later, I felt totally fine.

Ever since that Saturday in July, Jon Lewis has made every trade in every portfolio and written every Saturday Report.  I spoke with him and shared ideas on a regular basis, but he made all the final decisions.  Jon has done a better job than I have in carrying out the 10K Strategy.  For 2022, I traded this strategy in my personal portfolio and did far worse than the market averages. It was my worst year ever. 

Meanwhile, Jon beat those averages by more than 20%. He wisely handled the extreme volatility by keeping about half the portfolios in cash, and placing spreads at a larger range of strikes than we had ever used in the past.

I endured more health issues again this year.  I have had asthma-like breathing issues that prevented me from playing tennis singles or taking long-distance hikes.  In June, a biopsy showed a “high risk” cancer tumor in my prostate.  A long course of radiation has hopefully taken care of it.  And an adjustment to my pacemaker has improved my breathing considerably.

I am almost 84 years old and have been involved in Terry’s Tips for 21 years since I started in in 2001.  I continue to love options trading and place trades in my personal account nearly every trading day.  But this seems to be the appropriate time to turn the entire business over to Jon.

I want to thank my loyal subscribers who hung in there through the difficult years (like 2022).  I have enjoyed conversations over the years with many of you. I hope some of those relationships will continue as we move forward.

I will continue to read the Saturday Report each week, and surely have thoughts I would like to share with Jon. I may offer some additions to the quotations list at the end, but going forward, this is his baby. I am absolutely certain that if volatility falls just a bit to where it has hung out in the great majority of years, he will kill the market averages by a huge margin.

I wish Jon, and all the subscribers who make Terry’s Tips possible, all the luck in the world.  You have made this a wonderful ride for me, and I thank you from the bottom of my heart.

Happy trading,

Terry

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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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