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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

March 5, 2024

March 5, 2024

Sunny Outlook

We’re headed back to the bullish side this week with a trade on First Solar (FSLR). The country’s largest solar module maker reported earnings on Tuesday after the bell. Earnings per share came in above estimates, while revenue fell short despite growing more than 15% year over year. The company guided earnings and sales that were in line with or slightly higher than the analyst consensus.

The stock jumped as much as 9% on the news before closing 3% higher. That’s in sharp contrast to other solar companies, which have been plagued by lower demand, high interest rates, regulatory changes and higher inventories. But FSLR managed to overcome those headwinds with stronger pricing power, something analysts see continuing in 2024.

The news was not met with any ratings changes, though there were a few target price increases. Depending on the source, FSLR’s average target price is in the $210-235 range, which is well above Friday’s $158 close. Given that the stock reached a high of $232 last May – its highest level in the past 25 years – these estimates may be a tad overexuberant.

My take on FSLR – based on the charts – is more conservative. The stock has gone nowhere in the past five months, travelling mostly between the 140 and 175 levels. The 20-day and 50-day moving averages, which have provided nothing in terms of support or resistance, are horizontal and of little use.

Given the positive earnings results and outlook, we’re looking for the bottom of this trading range continuing to hold at 140, a level the stock has closed below just seven times going back to October 2022. The short strike of our put spread is at 140, which is more than 11% below Friday’s close. Because we’re going so far OTM with this trade, the credit and max return are somewhat lower than most of our trades. Less risk, less reward.        

If you agree that the stock will continue respecting the bottom of its trading range, consider the following credit spread trade that relies on FSLR staying above $140 (blue line) through expiration in 7 weeks:

Buy to Open the FSLR 19 Apr 135 put (FSLR240419P135)
Sell to Open the FSLR 19 Apr 140 put (FSLR240419P140) for a credit of $0.90 (selling a vertical)

This credit is $0.05 less than the mid-point price of the spread at Friday’s $158.05 close.   Unless FSLR surges at the open on Monday, 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 $88.70. This trade reduces your buying power by $500, making your net investment $411.30 per spread ($500 – $88.70). If FSLR closes above $140 on Apr. 19, the options will expire worthless and your return on the spread would be 22% ($88.70/$411.30).

** We are crushing it! Our Costco (COST) portfolio is up 23% already this year. Our Microsoft (MSFT) portfolio is up 14% (last year this portfolio returned more than 70%). Don’t be left behind … there’s still time to save more than 50% on a monthly subscription to Terry’s Tips. Just Click Here, select Sign Up Now and use Coupon Code D21M to start a monthly subscription to Terry’s Tips for half off.**

January 31, 2024

January 31, 2024

Dear [[firstname]],

Here’s your Option Trade of the Week as included in this past weekend’s Saturday Report for our Terry’s Tips Premium Members.The credit from last week’s trade ran away from us pretty quickly, so I opted to pass on sending it out knowing that you wouldn’t get the minimum credit. This week’s trade – which gets us back on a bullish track – has a better chance for entry. So, I’m hoping that you can make it work.

Before that, though, I have to tell you that our Microsoft (MSFT) portfolio – we call it Wiley Wolfis on fire. With January in the books, we are already up more than 22% while the stock itself is up less than 6%. In fact, we booked more than half that huge gain just today after MSFT’s earnings!

How did we do it? The same way we bagged 70% and 92% profits using MSFT and QQQ last year – Dr. Terry Allen’s 10K Strategy. This market-beating strategy has proven itself over the past two decades … and this year looks to be no exception.

You can’t afford to miss out on these profits. Resolve to make 2024 your best trading year ever – and learn about Terry’s unique strategy – by becoming a Premium Member of Terry’s Tips.

For our loyal newsletter subscribers (that’s you), I’m of course keeping the sale going that saves you more than 50% on a monthly subscription to Terry’s Tips. Plus, I’m adding a promise that this rate will never increase. I won’t make this promise forever, though, so now is the time to get in on the action … and profits.

As a Premium Member to Terry’s Tips, you’ll get …

  • A month of all trade alerts in our four portfolios, giving detailed instructions for entering and exiting positions. Trade one portfolio (I recommend Wiley Wolf) or all four. It’s up to you.
  • 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.
  • Access to our autobrokers to make trades on your behalf.
  • 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. 
  • Annual subscription available for more than 50% savings

And, for a limited time, I am including a Special Bonus. Terry Allen has condensed his 30 years of options trading experience into an eBook – Making 36% – A Duffer’s Guide to Breaking Par in the Market Every Year, in Good Years and Bad. Learn a different way to trade using Terry’s unique and decades-tested 10K Strategy. This book is normally $9.98 on our website (and $19.95 on Amazon), but I will personally send you the digital version for free with a paid subscription.

To become a Terry’s Tips Premium 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, keep all the valuable reports and the book.

I look forward to having you join in the fun and profits! Now on to the trade …

It’s Intuitive

Lots to chew on this week with earnings season in full swing, so let’s dive right in with a bullish trade on Intuitive Surgical (ISRG). The company makes surgical instruments, notably the da Vinci robot, that emphasize minimal invasiveness. ISRG reported Tuesday after the bell, easily beating on the top (profit) and bottom (revenue) lines. Earnings per share increased 30% from a year earlier, while revenues improved more than 16%. Much of this growth came from a 21% increase in da Vinci procedures.

Analysts were quick to raise their target prices, with at least a half dozen trying to beat each other to the punch. These were not minor increases, either. One firm raised its target by 35%, while several others were around 15%. That equates to increases of $30 to more than $100 … not bad for a $375 stock. Oddly, there were no rating increases, keeping ISRG at a solid buy rating. However, there are few holds on the stock, leaving some room for upgrades.

Also odd is the fact that the stock fell as much as 3.4% on Wednesday, though it closed just 0.4% lower. That’s the smallest move after earnings in more than 11 years. There wasn’t much action after that, as ISRG gained about a percent on Thursday and Friday. The stock reaction might give one pause given the strong earnings results. However, the muted move makes more sense since the company already released bullish guidance numbers a couple of weeks ago. That caused the shares to pop more than 10%, making this week’s news less impactful.

The guidance surge pulled the stock away from its 20-day moving average, a trendline that has guided a 47% rally over the past three months. The shares spent a few days just below the 20-day in early January, the only time they were staring up at the trendline since crossing above it on November 1. We are therefore using the 20-day as the basis of this week’s bullish trade. The short put strike of our spread sits just below the 20-day, which is about 6% beneath Friday’s close.

If you agree that the stock will continue trading above, or at least near, the 20-day moving average (blue line), consider the following credit spread trade that relies on ISRG staying above $350 (red line) through expiration in 7 weeks:

Buy to Open the ISRG 15 Mar 345 put (ISRG240315P345)
Sell to Open the ISRG 15 Mar 350 put (ISRG240315P350) for a credit of $1.00 (selling a vertical)

This credit is $0.10 less than the mid-point price of the spread at Friday’s $374.76 close.   Unless ISRG surges sharply at the open on Monday, 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 $98.70. This trade reduces your buying power by $500, making your net investment $401.30 per spread ($500 – $98.70). If ISRG closes above $350 on Mar 15, the options will expire worthless and your return on the spread would be 25% ($98.70/$401.30).

Testimonial

It is often said that options are to stock trading as chess is to checkers. I was looking to find the chess master amongst the checker’s champs, and Terry is the one. Looking for very smart yet understandable way to trade options? Look no further. ~ Phil Wells

Remember to click here, select Sign Up Now and use Coupon Code D21M to start a monthly subscription to Terry’s Tips for half off. And get Terry’s eBook for free.

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

January 17, 2024

January 17, 2024

Dear [[firstname]],

It may be a little late, but Happy New Year! I haven’t sent an issue for a while because the credits for our weekly trades weren’t close enough to my target entry prices. As you know, I will not send an issue with a trade you have no chance of entering. This week, however, the credit is higher than when I sent the trade to our premium subscribers, meaning your maximum profit is now greater.

This is my first chance to tell you about the amazing profits we racked up last year. Our QQQ portfolio gained more than 90% for the year, while our MSFT portfolio brought in 70%. We’re on some kind of roll with MSFT, averaging gains of more than 100% over the past 5 years. And 2024 has started the same way … in the profit column.

You can’t afford to miss out on these profits. Resolve to make 2024 your best trading year ever with a subscription to Terry’s Tips.

For our loyal newsletter subscribers (that’s you), I’m of course keeping the sale going that saves you more than 50% on a monthly subscription to Terry’s Tips. Plus, I’m adding a promise that this rate will never increase. I won’t make this promise forever, though, so now is the time to get in on the action … and profits.

As a Premium Member to Terry’s Tips, you’ll get …

  • A month of all trade alerts in our four portfolios, giving detailed instructions for entering and exiting positions. Trade one portfolio or all four. It’s up to you.
  • 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. 

And for a limited time, I am including a Special Bonus. Terry Allen has condensed his 30 years of options trading experience into an eBook – Making 36% – A Duffer’s Guide to Breaking Par in the Market Every Year, in Good Years and Bad.” Learn a different way to trade using Terry’s unique and decades-tested 10K Strategy. This book is normally $9.98 on our website (and $19.95 on Amazon), but I will personally send you the digital version for free with a paid subscription.  

To become a Terry’s Tips Premium 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, keep all the valuable reports and the book.

I look forward to having you join in the fun and profits! Now on to the trade …

United We Fall

Earnings season started this week, though the number of reports was limited. Big banks dominated the headlines, but I didn’t see anything tradeable there. And I was looking for a bearish play to diversify a portfolio that will be all put spreads after this coming Friday.

So, I went with a company that’s bigger – by market cap – than any bank: UnitedHealth Group (UNH). The company reported on Friday, beating expectations for both revenue and income. But a key metric – the medical cost ratio – came in well above estimates. And that proved to be UNH’s undoing, as the stock slumped 3.4% on Friday.

UNH has a half-trillion-dollar market cap, so it gets a lot of analyst coverage. But oddly, there wasn’t a peep from the analyst community on Friday –  no ratings changes and no target price moves. Perhaps they were mulling over their overly bullish stance toward the stock.

According to Yahoo! Finance, all 22 rating analysts consider UNH a buy or strong buy. The average target price is around $600, which is 15% above Friday’s close and 7% above the stock’s all-time high, set in October 2022. And it’s not like UNH set the world on fire in 2023. In fact, the stock closed the year a few bucks lower. Maybe we’ll start seeing some analysts ease back on the throttle and temper their targets and ratings, which could put some pressure on the stock.

The price drop on Friday pulled the shares below both their 20-day and 50-day moving averages. For the technical purists, the 20-day (blue line) bearishly crossed below the 50-day (red line) at the end of last year.

I’ve also noted an interesting pattern with UNH. Whatever the stock does the day after earnings tends to be the path for the next several weeks. After the past two earnings reports, the stock gained after earnings and continued to be higher through the subsequent five weeks. The two quarters before that, it was the opposite story – lower the day after earnings and five weeks after earnings. So, if history holds, UNH may find some rough sledding for the next few weeks. Plus, it will have to overcome its short-term moving averages, which are both headed lower.

This week’s bearish call spread has a short strike at the 540 level, which is above both the 20-day and 50-day moving averages. It also sits in an area where the stock has struggled to consistently stay above. Note that this is a 10-point spread because that is the strike increment in the 16Feb series. We’re going with the monthly series because UNH’s weekly options have poorer liquidity. Thus, these spreads will require more buying power, as noted below.

If you agree that the stock will continue to struggle after its earnings slump, consider the following credit spread trade that relies on UNH staying below $540 (green line) through expiration in 5 weeks:

Buy to Open the UNH 16 Feb 550 call (UNH240216C550)
Sell to Open the UNH 16 Feb 540 call (UNH240216C540)

for a credit of $2.20 (selling a vertical)

This credit is $0.10 less than the mid-point price of the spread at Friday’s $521.51 close.   Unless UNH falls sharply at the open on Tuesday, 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 $218.70. This trade reduces your buying power by $1,000, making your net investment $781.30 per spread ($1,000 – $218.70). If UNH closes below $540 on Feb 16, the options will expire worthless and your return on the spread would be 8% ($218.70/$781.30).

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

Remember to click here, select Sign Up Now and use Coupon Code D21M to start a monthly subscription to Terry’s Tips for half off. And get Terry’s eBook for free.

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

Happy trading,

Jon L

Making 36%

Making 36% – A Duffer's Guide to Breaking Par in the Market Every Year in Good Years and Bad

This digital 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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