Visit OptionsEducation.org to register!

Transcription

1 Today s webinar will begin at 3:30 CT / 4:30 ET The Options Industry Council has a full schedule of live events, including evening seminars around the country and online webinars. Sign up today! UPCOMING WEBINARS March 22, 2017 Options Strategy Selection: What You Should Think About Before You Trade Join OIC for a discussion this month as we delve into how our panel of experts approach choosing their optimal options strategy. Moderated by Joe Burgoyne, Director of Education at OIC, the panel will discuss important questions investors and traders should consider before trading including: How much capital is at risk? What is the forecast of the underlying security? What are your profit targets and should stop losses be used? Should volatility levels be considered? Our panel will discuss these questions and more in explaining how they decide which strategy is best. April 12, 2017 Income with Portfolio Overwriting Join OIC for a discussion on how Portfolio Overwriting can potentially generate income by using covered call writing in long-term, buy-and-hold portfolios. Hear from Alan Ellman of Blue Collar Investor as he explains his approach to income generation. Visit OptionsEducation.org to register!

2 2 Choosing an Options Strategy Using Behavioral Japanese Candlestick Trading March 15, 2017 Joe Burgoyne Director, Options Industry Council Dan Gramza, President, Gramza Capital Management

3 3 Who We Are About OIC The Options Industry Council (OIC) is an industry resource funded by OCC, the world s largest equity derivatives clearing organization and sole central clearinghouse for U.S. listed options, and the U.S. options exchanges. OIC s mission is to provide free and unbiased education to investors and financial advisors about the benefits and risks of exchange-traded equity options. Managed by OCC, OIC delivers its education through the Options Education Program, a structured platform offering live seminars, self-directed online courses, mobile tools, podcasts, webinars and live help. OIC s resources can be accessed online at or via mobile app for ios. About OCC OCC is the world s largest equity derivatives clearing organization and the foundation for secure markets. Founded in 1973, OCC operates under the jurisdiction of both the U.S. Securities and Exchange Commission (SEC) as a Registered Clearing Agency and the U.S. Commodity Futures Trading Commission (CFTC) as a Derivatives Clearing Organization. OCC now provides central counterparty (CCP) clearing and settlement services to 19 exchanges and trading platforms for options, financial futures, security futures and securities lending transactions. More information about OCC is available at

4 4 U.S. Listed Options Exchanges

5 5 Annual Options Volume OCC Annual Contract Volume by Contract Type Cleared Contracts (Billions) Equity Non-Equity

6 6 The Options Industry Council Options involve risks and are not suitable for everyone. Individuals should not enter into options transactions until they have read and understood the risk disclosure document, Characteristics and Risks of Standardized Options, available by visiting OptionsEducation.org. Copies may also be obtained by contacting your broker or The Options Industry Council at One North Wacker Drive, Chicago, IL For the sake of simplicity, the examples about to be presented do not take into consideration commissions and other transaction fees, tax considerations, or margin requirements. These are factors that may significantly affect the economic consequences of a given strategy, and they should be considered before making actual investments. Any strategies discussed, including examples using actual securities and price data, are strictly for illustrative and educational purposes only and are not to be construed as an endorsement, recommendation, or solicitation to buy or sell securities. Past performance is not a guarantee of future results. The strategy suggestions presented during this discussion are the ideas of the presenter and not those of The Options Industry Council or OCC. Also, OIC makes no recommendation with respect to any financial education firm. OIC does not control, nor has it developed or reviewed the relevant content, and does not make any warranty, express or implied, as to the accuracy, usefulness, timeliness or even the continued availability or existence of information created or maintained by others. Opinions expressed by others are not necessarily those of OIC, nor does OIC endorse, warrant, or guarantee products, services or information described or offered by such firms. Copyright The Options Industry Council. All rights reserved.

7 Choosing an Options Strategy Using Behavioral Candlestick Trading Prepared and Presented by Dan Gramza

8 Disclaimer Materials in this presentation are covered under current United States and international copyright laws. NO PORTION OF THIS PRESENTATION MAY BE REPRODUCED WITHOUT THE WRITTEN PERMISSION OF THE AUTHOR. The content in this presentation is for educational and informational purposes only. There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. For Free Daily Market Commentary visit: dangramza.com 8

9 Why Do People Trade Options? Price Direction Up, Down, Sideways Volatility Direction Up, Down, Sideways Mis-pricing between options Mis-pricing between options and the underlying stock 9

10 Common Option Mistakes A directional position without a specified directional bias Abuse of OTM options Too tight an expiration Buying options with high implied volatility Overstay a non performing trade 10

11 Directional Option Strategy A directional position with a specified directional bias ATM Expiration beyond current expiration Buying options with low implied volatility Using time and price to regulate the trade 11

12 Behavioral Japanese Candle Construction Selling Shadow Close High Buying Body Selling Body Open Open Low Buying Shadow Close 12

13 Behavioral Candle Characteristics 13

14 Behavioral Japanese Candle Trading Strategies 14

15 GRAMZA LEAD UP PATTERN OVERVIEW 3 candle reversal pattern Can be utilized in different time frames and different market conditions Trade Entry Determined amount above the bullish candle. Determined amount below the bearish candle. 15

16 GRAMZA LEAD UP PATTERN OVERVIEW Typically profitable with the candle occurring after the reversal setup candle. If the pattern trade entry has not occurred within 3 periods of time or is not profitable within 3 periods of time after trade entry consideration should be given to exit the position even though the trade risk management parameters have not been met. 16

17 GRAMZA LEAD UP PATTERN OVERVIEW Trade profit management is a trailing stop Determined amount below the lows of the candles following trade entry for a bullish pattern Determined amount above the highs of the candles following trade entry for a bearish pattern or a magnitude objective based upon the volatility of the market being traded. 17

18 BULLISH Gramza Lead Up to REJECTION 3 Lower Highs Sell Stop Sell Stop Sell Stop Buy Entry Sell Stop Sell Stop 18

19 1 Sell Exit 2 3 Buy Entry Sell Stop 19

20

21 BEARISH Gramza Lead Up to REJECTION Buy Stop Buy Stop Sell Entry Buy Stop Buy Stop 3 higher Lows Buy Stop 21

22 Buy Stop 3 Sell Entry 1 2 Buy Exit 22

23

24 1 2 3 Call Option 10/15= $ Call Option 10/5 = $

25

26 26

27 27

28 28

29 29

30 Intro Video on Free Daily Video Commentary 30

31 About Dan Gramza Over 30 years experience trading futures, options on futures, stocks, stock options and cash markets around the world Started on the exchange floors, trades upstairs Experience with scalping, day trading, swing trading and position trading Testified as expert in US Federal Court Set up prop trading operations Co-inventor of 2 issued security patents and 3rd pending security patent Co-inventor currency ETF Has worked with traders from over 36 exchanges, 450 institutions, and 35 countries 31

32 Questions & Answers Session Thank You for Attending 32

33 33 The Options Education Program Whether you re an options novice or just deployed an iron condor, the Options Education Program has you covered. Take the MyPath assessment so you can learn at your own pace online and customize your own curriculum for your skill level. Download our podcasts and videos and learn options on your own time. Attend seminars and webinars and hear first hand about options strategies. Get all your options-related questions answered by our leading professionals at Investor Services.

34 34 For More Information ore Information Investor Services: OIC YouTube Channel Follow us on

35 Thank you for attending Thank you for attending.