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Kim Klaiman is a full time options trader and founder of SteadyOptions. He trades mostly non-directional strategies, like pre-earnings strangles and iron condors. Likes to trade strategies with negative correlation. He lives in Toronto, Canada. Visit the forum. SteadyOptions... More
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  • $TSLA, $LNKD, $NFLX, $GOOG: Thank You, See You Next Cycle

    Our long term followers know that buying premium into earnings is one of our favorite strategies. I wrote about the strategy in my Seeking Alpha article Exploiting Earnings Associated Rising Volatility. IV (Implied Volatility) usually increases sharply a few days before earnings, and the increase should compensate for the negative theta. We have been using this strategy in our SteadyOptions model portfolio with great success.

    However, not all stocks are suitable for that strategy. Some stocks experience consistent pattern of losses when buying premium before earnings. For those stocks we are using some alternative strategies like calendars.

    In one of my previous articles I described a study done by tastytrade, claiming that buying premium before earnings does not work. Let's leave aside the fact that the study was severely flawed and skewed by buying "future ATM straddle" which simply doesn't make sense (see the article for full details). Today I want to talk about the stocks they used in the study: TSLA, LNKD, NFLX, AAPL, GOOG.

    Those stocks are among the worst candidates for a straddle. In fact, they are so bad that they became our best candidates for a calendar strategy (which is basically the opposite of a straddle strategy). Here are our results from trading those stocks in the recent cycles:

    • TSLA: +28%, +31%, +37%, +26%, +26%, +23%
    • LNKD: +30%, +5%, +40%, +33%
    • NFLX: +10%, +20%, +30%, +16%, +30%, +32%, +18%
    • GOOG: +33%, +33%, +50%, -7%, +26%

    You read this right: 21 winners, only one small loser.

    This cycle was no exception: all four trades were winners, with average gain of 25.2%.

    I'm not sure if tastytrade used those stocks on purpose to reach the conclusion they wanted to reach, but the fact remains. To do a reliable study, it is not enough to take a random list of stocks and reach a conclusion that a strategy doesn't work.

    At SteadyOptions we spend hundreds of hours of backtesting to find the best parameters for our trades:

    • Which strategy is suitable for which stocks?
    • When is the optimal time to enter?
    • How to manage the position?
    • When to take profits?

    The results speak for themselves. We booked 147% ROI in 2014 and 32% ROI so far in 2015. All results are based on real trades, not some kind of hypothetical or backtested random study.

    If you want to learn more how to use our profitable strategies and increase your odds:

    Start Your Free Trial

    Feb 12 2:33 PM | Link | Comment!
  • Name Of The Game: Steady, Consistent, Transparent

    Numbers don't lie. Take a look how the major indexes performed in January, and compare it to SteadyOptions performance:

    S&P 500: -3.1%
    Dow Jones: -3.7%
    Russell 2000: -3.3%
    SteadyOptions: +20.7% ROI

    After booking 146% ROI in 2014, we closed 8 trades in January, producing an incredible 88% winning ratio and 16% average return per trade.

    Our success continues in February. Here is the list of ALL trades we closed so far in 2015:

    • LNKD calendar: +30.0%
    • EXPE straddle: +0.7%
    • GMCR calendar: +6.8%
    • VIX calendar: +10.0%
    • RL straddle: +13.8%
    • GOOG calendar: +33.3%
    • FB calendar: +15.0%
    • BABA calendar: +26.3%
    • MSFT straddle: -2.0%
    • SPY/TLT combo: +15.0%
    • NFLX calendar: +10.2%
    • RUT Iron Condor: +19.3%
    • INTC straddle: +6.8%

    13 trades. 12 winners. Overall 2015 YTD ROI: 30.9%, or 18.5% return on the whole account (based on 10% allocation per trade). That means that if you allocated 10% of your portfolio to each trade, your account would be up 18.5% just in the last 5 weeks.

    I know this sounds too good to be true. I know that people are tired of investment services that manipulate their numbers (you can find some examples here). However, those numbers are real. They are based on actual trades. All trades come with screenshots of broker fills. Each and every trade is archived on the forum and can be verified.

    In fact, many of our members did even better than the official performance. Some members books 50% gain in SNDK, 30%+ gain in INTC, 30%+ gain on YELP, 25%+ gain on AMZN, 15%+ gain on YUM etc, in addition to our official picks.

    At SteadyOptions, full transparency is the name of the game. No "hypothetical performance reporting", "profit potential" or other tricks. We execute all trades in our personal accounts. ALL trades are listed on the performance page. We won't ask you to email us to get the track record. We won't ask you to sign up first to get the track record from the members area. Can other newsletters show the same level of transparency?

    Finally, we would like to share with you the latest testimonial from one of our members:

    "I would definitely recommend SteadyOptions for the trader who is tired of the "double your money in a month" type of philosophy and just wants to steadily and confidently increase his account by credible and attainable figures. Kim is a great trader while also being a patient and thoughtful teacher and his forum is an invaluable source of wisdom for the serious trader that wants to learn to fish his own fish. It is refreshing to learn from a real trader, with real numbers, trading his own money as opposed to the other "traders" that "teach" for a living."

    It is not a coincidence that SteadyOptions is a top ranked newsletter on Investimonials. You can read all our reviews here.

    Why not to try us free for 10 days? You have nothing to lose - cancel before the end of the free trial and you are not billed.

    Start Your Free Trial

    Feb 07 12:21 AM | Link | Comment!
  • Steady Options 2014 - Year In Review

    Happy New Year everyone! Wishing you and your families a lot of health, prosperity and happiness in 2015.

    2014 marks our third year as a public service. We had an fantastic year. We closed 150 trades in 2014 which produced 146.6% ROI, based on fixed $1,000 allocation per trade (non-compounded) and 6 trades open. The winning ratio was pretty consistent around 63%. We had only one losing month in 2014. Check out the Performance page to see the full results. Please note that those results are based on real fills, not hypothetical performance.

    Performance dissected

    It is important to mention that those numbers are pre-commissions, so your actual results will be lower. As with every trading system which uses multi leg trades, commissions will have a significant impact on performance, so it is very important to use a cheap broker. We have extensive discussions about brokers and commissions on the Forum (like this one) and help members to select the best broker. Commissions reduce the monthly returns by approximately 2-3% per month, depending on the broker. Please refer to Performance Dissected topic for more details.

    August was our only losing month in 2014. Our biggest loser was 50%, and only nine trades have lost more than 20%.

    Our strategies

    SteadyOptions uses a mix of non-directional strategies: earnings plays, Iron Condors, Calendar spreads etc. The pre-earnings strategy is based on my Seeking Alpha articles 'Exploiting Earnings Associated Rising Volatility' and 'How To Rent Your Options For Free'. This strategy aims for consistent and steady gains with holding period of 2-7 days.

    SO model portfolio is not designed for speculative trades although we might do some in the speculative forum. SO is not a get-rich-quick-without-efforts kind of newsletter. I'm a big fan of the "slow and steady" approach. I aim for many singles instead of few homeruns. My first goal is capital preservation instead of doubling your account. Think about the risk first. If you take care of the risk, the profits will come.

    We continue expanding the scope of our trades beyond the earnings trades, Iron Condors and calendars. We are trading SPY, GLD, TLT, VIX and other ETFs to diversify the portfolio. We also started trading weekly trades to boost the returns. We will continue refining those strategies to get even better results. This gives members a lot of choice and flexibility.

    Looking at specific strategies, pre-earnings calendars were big winners in 2014, producing 17% average return with over 80% winning ratio. We will continue trading what works the best and adapt to the market conditions.

    What makes SO different?

    First, we use a total portfolio approach for performance reporting. This approach reflects the growth of the entire account, not just what was at risk. We balance the portfolio in terms of options Greeks. SteadyOptions provides a complete portfolio solution. We trade a variety of non-directional strategies balancing each other. You can allocate 60-70% of your options account to our strategies and still sleep well at night.

    Second, our performance is based on real fills. Each trade alert comes with screenshot of my broker fills. Many services base their performance on the "maximum profit potential" which is very misleading. Nobody can sell at the top and do it consistently. We put our money where our mouth is.

    Our performance reporting is completely transparent. All trades are listed on the performance page, with the exact entry/exit dates and P/L percentage.

    It is not a coincidence that SteadyOptions is ranked #1 out of 704 Newsletters on Investimonials, a financial product review site. Read all our reviews here. The reviewers especially mention our honesty and transparency.

    We place a lot of emphasis on options education. There is a dedicated forum where every trade is discussed before the trade is placed. We discuss different strategies and potential trades. Unlike most other services that just send the trade alerts, our members understand the rationale behind the trades and not just blindly follow the alerts. SO actually helps members to become better traders.

    Other services

    In addition to SteadyOptions, we offer the following services:

    The LCD is our most diversified and scalable portfolio, I highly recommend that members check it out. It is offered as an added bonus of all subscription plans. We also offer Managed Accounts for Anchor Trades and LCD.

    Let me finish with my favorite quote from Michael Covel:

    "Profits come in bunches. The trick when going sideways between home runs is not to lose too much in between."

    Subscription is now open to new members for a limited time. We invite you to join one of the most successful options newsletters. When you join SteadyOptions, we will share with you all we know about options. We will never try to sell you any additional "proprietary systems", training, webinars etc. All our "secrets" are included in your monthly fee.

    Happy Trading from SO!

    Start Your Free Trial

    Jan 04 3:33 PM | Link | 2 Comments
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