How We’re Trading Today
Everyone always wants to know how we’re trading or what we’re trading nowadays. As we’ve been 100% transparent about (which by now I’m sure we sound like a broken record!) we are Stock Options Analysts with years of trading experience. And since becoming Stock Options Analysts, we’ve scaled back on our own trading to focusing more on helping other people with their stock options trading. So yes, we still enjoy trading for an additional income, but what in the world ARE we trading right now? Let’s find out!
Which Indicators Are Used?
We mostly look for tickers with high win rates for our monthly Bull and Bear Trade Strategies (where price closes above our Low Target Level, or below our High Target Level, during the monthly expiration cycle). We use our Win Rates Add-On to quickly find tickers in our watchlist with the highest win rates… this shows us what’s winning RIGHT NOW. We also use our PRO Indicators to see which months won or loss these strategies (which is great if you’re a visual trader like we are!). So, for those of you who have access to our Win Rates Add-On and PRO Indicators, you can trade this too! (you can get all of these and more in our ELITE Package!)
Entry Criteria & Chart Setup
The ticker needs to have at least a 75% win rate for the Bull or Bear strategy over the past 60 months (5 years) when trading the monthly expiration cycle.
First, we have our PRO Targets indicator to automatically plot our monthly target levels on our charts for us. Second, we have our PRO Insight indicator set to show win rates over the past 60 cycles (that’s 60 months or 5 years.) Finally, we have our Bull Win Rate column or Bear Win Rate column (which are included with the “Win Rate Add-Ons”) added to our watchlist to see the win rates for the past 60 months. This helps us quickly scan through our list to see which tickers are winning this strategy right now!
Options Strategies To Trade
Once we find a ticker that has at least a 75% win rate for the Bull or Bear strategy, we want to trade it in a way that allows us to profit from price closing above our Low level (Bull Strategy) or below our High Level (Bear Strategy.) We typically recommend placing trades where you can capture a partial profit and close out of your trade early (i.e. credit spreads), however you can always be creative with how you build out your options strategy and when you choose to exit for profit!
Although we do love and trade Credit Spreads with our Bull and Bear strategies, we also like trading Diagonal Spreads… And although you will technically buy this Diagonal Spread, the key is to take in a credit! When you take in a credit instead of paying a debit, these spreads are set up similarly to credit spreads. There are two main differences between them… (1) with Diagonals, your long option has an expiration date that is further out than your short option expiration date and (2) with Diagonals, you have the potential to profit more than the max credit received when entering the trade.
This Diagonal structure allows us to actually hold our trade all the way up to the short option’s expiration date in order to capture the max credit or possibly even more. And with the long option having a later expiration date, you could even hold these trades through the short option’s expiration date. In this case, the long option would offer protection if you experience assignment after expiration (yes… you CAN still be assigned up to 90 minutes after your short option expires). And if you don’t get assigned, then simply close the long strike Monday morning and enjoy your winning trade 🙂
Summary
We essentially just look for tickers that have won our monthly Bull or Bear Strategy at least 75% of the time over the past 5 years. Then, we enter a Credit Spread or Debit Spread where we profit if price closes above our Low Level (Bull Strategy) or below our High Level (Bear Strategy) for that month. While Credit Spreads are easier to enter and they have a defined max profit (unlike the varying max profit of a Diagonal Spread), Diagonal Spreads still offer higher profit potential and better protection if you choose to hold your trade through expiration.
Get Started Today
Interested in trading like us? With our Training Course Package you’ll have access to our full training course to learn how to start trading options, PLUS you’ll get the Win Rates Add-On, PRO Indicators and all of our other Elite add-ons, indicators and tools! If you’re not interested in our full training course, BUT you still want the Win Rates Add-On, PRO Indicators and all of our other Elite add-ons, indicators and tools, you can check out our ELITE Package instead.