# Andrew Crowder

Andrew Crowder
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Andrew Crowder

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## The Beauty Of Credit Spreads [View article]

## Short-Term Reversion To The Mean Underway? [View article]

## Stop Guessing And Learn The Statistical Way To Invest [View article]

Your math is way off, so that should be ignored. However, again you are correct otherwise.

If you bring in say, $250 in premium, commissions will be roughly $12.50 to $15.00 per 10 contracts and in most cases because tey are out-of-the-money spreads you do not have to pay on the way out as most trades will be left to expire worthless thereby accepting the max gain on the trade. I hope this helps.

## The Market Is At A Short-Term Pivotal Point [View article]

## Stop Guessing And Learn The Statistical Way To Invest [View article]

## Some Investors Will Never Understand... And That's Okay [View article]

## Stop Guessing And Learn The Statistical Way To Invest [View article]

As for your housing example...what are the probabilties that you speak of...it sounds like more conjecture than hard stats. In fact, like in the tech boom and every other bubble, the probability or "pot odds" of a move lower in housing was high...due to mean-reversion.

You must also understand the concept of duration to fully understand the concept. I would also argue that they are not the best and the brightest...just look at the latest "rogue trader" and his lack of knowledge when it came to the risk-associated with his billion dollar position.

I try not to make assumptions. Like all options professionals who sell premium to investors who wish to speculate on large moves occurring (selling out-of-the-money credit spreads) we use probabilities to our advantage. I can tell you firsthand this is how it's done.

As for teaching people to be naive, respectfully that is a ludicrous statement.I try to teach people how to use probabilities to their advantage. More importantly, I teach people how credit spreads are risk-defined at order entry. But the most important aspect and the one that you neglect to mention as to how all of these so-called geniuses lost all their money - is position-size. Position-size is the key to long-term success and it was inappropriate position-size and illiquid markets that led to the financial collapse, not the strategy employed.

## Stop Guessing And Learn The Statistical Way To Invest [View article]

Probabilities calculates the likelihood of a future event occurring, given certain parameters like time and volatility.

Probability-based trading is self-adjusting for changes in volatility. We can apply options strategies that have known probabilities, adjusting for current implied volatility and duration.

As for the statistical method I promote...talk to any professional options trader...view sites like Tastytrade..read about out-of-the-money credit spreads. Over the past year I have a win ratio of 23 out of 25 winning trades when it comes to credit spreads on ETFs. I ma not making outlandish returns. My return of capital is roughly 12-15%, so for every ten contracts I trade I make anywhere from $200-$300. Trade $6000-$10000 and I am making roughly $1000 a cycle.

Call me crazy, but trading using probabilities is the wave of the future.

Fundamental analysis looks at sample of past financial metrics to see if the current values are high or low, and assumes stock prices will respond in predictable ways.

Technical analysis counts the number of times certain price behaviors have occurred in a sample of past data, and assumes future markets will exhibit that specific behavior.

Ask any successful professional options trader if they use fundamental analysis or technical analysis. The answer is in most cases none. I have several traders who have worked on the floor and work with several strategists who have been in this game for roughly 30 years. They are trying to sell books, they are just making steady income. It is my hope that I can teach a few self-directed investors the strategies I have used for years, because for the or the first time it is actually affordable for the self-directed investor to trade this way. Ten years ago commissions and other transaction costs (software, etc.) would have made it impossible for the self-directed investor to trade this way. Your not going to get rich trading this way. There are no claims of making 100%, 200% or 300%. Those types of gains are not sustainable over long-term.

Again, I would suggest rather than responding with your opinion to first do some legitimate research on the topic. As an analyst who worked for Oppenheimer I know your side and it doesn't work. Fundamental analysis and technical analysis don't give you an edge. It's just noise, an engagement tool for the masses. You truly need to learn about the industry itself to fully understand where I am coming from, coupled with an astute grasp of probabilities and how to use them with credit spreads.

I hope this helps.

## Stop Guessing And Learn The Statistical Way To Invest [View article]

You are making the assumption that a max loss would be taken on each losing trade.

## Stop Guessing And Learn The Statistical Way To Invest [View article]

## Stop Guessing And Learn The Statistical Way To Invest [View article]

The fact is, every professional options traders use credit spreads. we are selling options to those in the marketplace who are speculators.

I would suggest that you read about probabilities of success. Start with articles from Tom Preston or Tom Sosnoff. I actually have quite a few on my site as well.

All of it is based on the Black-Scholes model and other binomial models, straight statistics, no guessing here.

IF after reading some articles on the statistical advantages of using out-of-the-money credit spreads please feel free to comment or email me and I would be more than happy to help you along.

However, before you make allegations do the research.

## Stop Guessing And Learn The Statistical Way To Invest [View article]

Since we brought in $0.25 per contract, our max loss would be $1.75.

Many newbie traders have issue with the risk/reward, but they don't understand the concept of probabilities. You are essentially putting up a maintenance requirement of $1.75 to make $0.25 and the trade has an 85% chance of success. For a max loss to occur the underlying, in this case, SPY, would have to move through the $148 strike at expiration, which is currently 5% away. And if it does start moving in that direction we can always make adjustments, however, I am always a fan of keeping my position-size small and allowing the probabilities to work themselves out. It is rare to see a max loss on an 85% or higher credit spread. I hope this helps.

## How To Choose Your Own Probability Of Success [View article]

By the way, I don't predict the future. I never claimed to. I make an assumption, but my assumption is always backed by a strategy with a high probability of success. I would suggest reading any of my articles on credit spreads, etc. or you could always go to Tom Sosnoff's website Tastytrade as they do a very good job speaking of similar strategies.

## Overview: On the Eve of Options Expiration [View article]

## The Market Presents Another Short-Term Opportunity [View article]