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2 2 HOW TO USE OPTIONS STRATEGIES IN TODAY S MARKETS WITH DON KAUFMAN

3 Risk Disclosure We Are Not Financial Advisors or a Broker/Dealer: Neither TheoTrade nor any of its officers, employees, representafves, agents, or independent contractors are, in such capacifes, licensed financial advisors, registered investment advisers, or registered broker-dealers. TheoTrade does not provide investment or financial advice or make investment recommendafons, nor is it in the business of transacfng trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any parfcular client s situafon. Nothing contained in this communicafon consftutes a solicitafon, recommendafon, promofon, endorsement, or offer by TheoTrade of any parfcular security, transacfon, or investment. SecuriFes Used as Examples: The security used in this example is used for illustrafve purposes only. TheoTrade is not recommending that you buy or sell this security. Past performance shown in examples may not be indicafve of future performance. Return on Investment ROI Examples: The security used in this example is for illustrafve purposes only. The calculafon used to determine the return on investment ROI does not include the number of trades, commissions, or any other factors used to determine ROI. The ROI calculafon measures the profitability of investment and, as such, there are alternate methods to calculate/express it. All informafon provided are for educafonal purposes only and does not imply, express, or guarantee future returns. Past performance shown in examples may not be indicafve of future performance. InvesFng Risk: Trading securifes can involve high risk and the loss of any funds invested. Investment informafon provided may not be appropriate for all investors and is provided without respect to individual investor financial sophisfcafon, financial situafon, invesfng Fme horizon, or risk tolerance. OpFons Trading Risk: OpFons trading is generally more complex than stock trading and may not be suitable for some investors. GranFng opfons and some other opfons strategies can result in the loss of more than the original amount invested. Before trading opfons, a person should review the document CharacterisFcs and Risks of Standardized OpFons, available from your broker or any exchange on which opfons are traded. No part of this presentafon may be copied, recorded, or rebroadcast in any form without the prior wri\en consent of TheoTrade. No SoliciFng. No Recording. No Photography. 3

4 4 Copyright Disclaimer All rights reserved. This Material may not be reproduced or distributed, in whole or in part, without prior written permission of TheoTrade, LLC. Any other reproduction or distribution, in whatever form and by whatever media, is expressly prohibited without the prior written consent of TheoTrade, LLC. For further information, please contact: TheoTrade, LLC N. Scottsdale Rd. # 410 Telephone: support@theotrade.com

5 5 Don Kaufman Ø Co-Founder TheoTrade Ø Industry-leading options strategist Ø Derivatives Risk Manager Ø 19 year trading career Ø 17 years of thinkorswim platform experience

7 7 About TheoTrade TheoTrade Specializes in education for options, futures, and stocks. Founded by professional traders and trading educators each with a minimum of 15 years experience, several with many decades TheoTrade is here to help you mitigate the risks in the market, while learning a skill set that can last a lifetime.

8 8 Your TheoTrade Instructors Doc Severson Stocks, Options and Technicals Corey Rosenbloom Swing Trader and Technical Strategist Jeff Bierman Stock trader & Former CMT for TD Ameritrade Steve Slim Miller - 43 year veteran stock, futures trader Tony Rago - Nasdaq Futures and Intraday Strategist

9 9 What You Will Learn In This Presentation Learn the right strategy and approach for any market so whether you're an intraday trader, swing trader, or long term investor you'll know the right time frames to use and appropriate risk exposure Discover how small adjustments and tweaks to your current trading regimen can potentially produce stellar results. How to understand what the correct trade logic and strategy can mean for your positions and portfolios while creating a more systematic approach to markets. How to identify the flaws within your trading strategy preventing you from being a consistent trader while learning to exploit mathematical edge when it exists. What are the right steps to take whether your trading or investing

10 10 Experience is the Worth Millions For 15 years I worked educating and watching order-flow for thinkorswim and TD Ameritrade s 7 million clients. I ve looked at 100s of thousands of accounts I ve seen what works and what doesn t What doesn t gets repeated over and over again! Tonight I will start with identifying areas of weakness followed by how and when we can approach and exploit market opportunities!

11 11 Buying Call Options We buy a call option in APPLE! APPLE goes UP! Do we make money?

12 12 AAPL Rally! Between Jan 3 rd and Jan 16 th Apple rallied

13 AAPL 1/3/

14 AAPL 1/16/

15 15 Being RIGHT isn t Everything You were in a trade you felt you did everything right. Directional bias was correct Timing and entry were effective However, you did NOT make money incredibly disheartening.

16 16 Your Approach to the Markets How you approach and effectively trade in markets is more significant than being right. You bought an option; watched the stock move your intended direction yet nothing? What went wrong?

17 17 One Small Tweak from HUGE Potential! In the aforementioned, APPL example what could we have done differently from a strategy perspective? You are one small strategy tweak and this AAPL trade is a potential home run! Let us do it again same stock, different strategy!

18 AAPL 1/3/

19 AAPL 1/16/

20 20 Recapping our AAPL Spread Trade Opening trade Closing trade Percentage return on investment 110%

21 21 The Right Trading Strategy and Logic Spread Trades Defines your risk Provide a high probability of success Limit capital exposure Does NOT need a stop order! Never need to buy or sell the stock!

22 22 Creating Trades that WORK! I will make the argument most clientele are right picking direction. However, they just do not know the correct strategies and CRITERIA to employ to make money. At TheoTrade we approach the markets using the from the following principles:

23 23 TheoTrade Principles 1. Trade Logic 2. Capital Allocation 3. Directional Bias

24 24 Trade Logic Place Strategy and Trade Logic first. The vast majority of people involved in markets are infatuated with market direction, attempting to predict the next move a stock is going to make. In reality, what you think a stock is going to do does not always translate into profits. Many investors and traders alike place far too much emphasis on being right or picking the next move a stock might make. The right strategy coupled with established entry and exit criteria allows you not to be right in picking a direction in a stock or the markets in order to be profitable.

25 25 Capital Allocation How and where you allocate capital should be strongly considered as a viable portion of your trading methodology. Capital allocation takes precedence over being right in the markets. Why you ask? Experience and watching order flow for decades has taught us invaluable lessons. Have you ever been stopped out of a trade or bailed out of a position only to see the markets turn around shortly thereafter? How and where you allocate capital can define not only losses, but it can be the defining factor in your overall success or failure in the markets. Our war cry is duration over direction. You need to be capable of sustaining trades long enough to be profitable. Think about it: You need to survive long enough to be right!

26 26 Directional Bias We are not anti-charts. Rather, we recognize that where you think a stock might go does not always mean the markets will agree with your sentiments. Being right directionally cannot define us as investors or traders, for we may not be right often enough. At TheoTrade we are realists regarding the marketplace, and we must place our capital at risk ONLY with the correct trade logic and a comfortable allocation.

27 27 Strategies You Need in your Arsenal Thus far we reviewed one strategy and our TheoTrade principles related to how we approach the markets. What other strategies do you need in your trading arsenal? Let us review a few of the core strategies we all need!

28 100

29 29 The Secret is in the Sauce Now you may be thinking hey I can read about options strategies anywhere and can do this! Well think again Strategy is only 10% of the battle and at TheoTrade what we do best is criteria! We give you the specifics behind trading the strategies

30 30 Criteria Answers the Trading Specifics What might be a good stock or ETF candidate for me to trade? What is the correct options expiration cycle for a spread? How much capital do I commit to this Iron Condor? What Strike Price Options do I sell? What Strike Price Options do I buy?

31 31 THEOTRADE RECIPES IN TRADING Criteria it's what we at TheoTrade do!

32 32 TheoTrade is the Answer to Your Questions What is the right probability for my trade? How many options contracts do I trade in for my account size? When do I close my Risk Twist Spread? What if the stock sells off big? Do I bail-out of the Short Spread? What is the stock rallies massively? Can I fix a losing trade?

33 33 TheoTrade Has Your Answers TheoTrade has the answer to your trade related questions! We Build Recipes with definitive criteria and checklists for each strategy and each unique variable you will encounter.

34 34 How, When, Why, at What Price? Earnings are approaching what steps do I take? Can I sell options without ever owning the stock? This is just the beginning of the many variables you will face while trading options!

35 35 How would you like to spend a week with TheoTrade detailing trade logic, setups, and CRITERIA for ALL the major options strategies? Selling Spreads Iron Condors Covered Calls and Selling Puts Calendar Spreads and Roll Values Advanced Strategies, Ratios, Risk Twist and more!

36 36 Strategy Week: Using High Probability Options Strategies Trade Instructor: Don Kaufman Attend Live Monday- Friday, January 22nd - 26th from 10 AM to 11:30 AM EST Class slide deck that includes entry and exit criteria checklist Lifetime Access to the On-Demand Recordings available immediately following each daily session. As an added bonus BONUS #1: Options 101: The Basics & Beyond Class BONUS #2: Options 201: Vertical & Calendar Essentials BONUS #3: Options 301: Volatility Essentials 1 Month ACCESS PASS to TheoTrade! $199 *Course qualifies you for a reduced commissions rate*

37 37 TheoTrade.com/Week Selling Vertical Spreads - Why entry and exit criteria is the key to consistent returns so you're never left guessing what options to trade Iron Condors - Step by step directions on how to enter high probability Iron Condors and when to take off the trade. Nothing left to the imagination. Covered Calls and Short Puts - Find the most vital criteria for selling the right options, eliminate the guess work, and maximize the benefits of time decay while you minimize your risks. Calendar Spreads and Rolling Trades Learn how to create calendar spreads and volatility bombs while taking a comprehensive approach to pricing when and how to roll trades. Advanced Strategies - Ratios spreads, Risk Twist and combining options positions - learn how to put strategies together and thrive in markets! Which stocks and indexes make the best candidates for options strategies What strikes and what expiration period to select to give you the highest probability of success When to open and when is the best time to close any options strategy Lifetime Access to the On-Demand Recording

38 38 TheoTrade 1 Month Access Pass Your Guide to Selling Spreads Course INCLUDES a 1 MONTH ACCESS PASS to EVERYTHING we will do online for the next MONTH, including: Daily Coaching Sessions with Timely Topics on Stocks, Options and Futures Live Trading Chat Room: Traders Provide Real Trade Ideas and Real-Time Market Insights and Analysis Instructor & Coaching Archives - Missed something from the daily continued education watch the recording at your convenience Start Here Section - Whether you're a new or experienced trader these 22 videos will get you started the RIGHT way. ed trade ideas TheoTrade proprietary indicators!

39 TheoTrade.com/Week 39

7pm Central Time

Live @ 7pm Central Time 2 Using Options for Consistent Returns with Don Kaufman 3 Risk Disclosure We Are Not Financial Advisors or a Broker/Dealer: Neither TheoTrade nor any of its officers, employees,