Master Weekly Options Processes and Tricks 2015

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1 Marc Nicolas Founder & Head Trader 20 Year Trading Veteran Master Weekly Options Processes and Tricks 2015 Real Trades Real Accounts Since 1994

2 During This Class You Will Learn... * How to Stack Weekly & Longer Term Options for Consistency AND How to Properly Defend Bad Positions! * Support & Resistance For High Probability Plays! * Cost Reduction Trading Strategies For Low Implied Volatility! * Learn To Spot The Perfect Setup Including What Day, What Option Strikes & What Deltas MUST Be Used In Order To Win And Give You The Highest Probabilities! * Learn The Keys To Dividing The Weeks Cycle And How to Use Proper Strategies For Particular Days Of The Week! * Little Known Secrets For Finding Cheap Options On Fridays With The Potential For Doubling & Tripling You Invested Capital While Having Extremely Limited Risk On The Downside! * And So Much More Its Too Much To List Here!

3 Do You Want to Be A Jack of All Trades, and MASTER OF NONE? Do you really need to master all these Options Strategies? NO! Master The Few That Make You Money!

4 1-2-3 Punch High Probability Positive Theta Play

5 THE MASTERCLASS OBJECTIVE!! Consistent PROFITS With Your Trading Do It With Minimum # Of Trades A Year With Less Time In Front Of A Computer! Understand Income Trades Vs Wealth Trades & Their Allocations In Terms of Risk & Sizes

6 THE BASICS INDIVIDUALLY Understanding Put / Call Behaviours Master SPY Weekly Options Directional Trades Debit Spread Mastery /Diagonals for Quick Decay 123 Punch Credit Spread Mastery Iron Condor Mastery Defending Any Of These Strategies

7 COMBINING AND DEVELOPING Master & Understand Volatility Timing Directional Plays Vs Spreads Timing Monthly Vs Weekly Options Timing Credit Vs Debit Spreads Keeping Active With The Right Money Management

8 OPTIONS CHECK LIST Key Metrics To Check 1. Open Interest: 1,000 s minumum 2. Daily Volume: 100 s contract minimum 3. Tight Spreads / High Liquidity: Underlying needs millions of shares, eg SPY 4. ROC = Max Profit (credit)/total Margin Capital Requirement to make the trade 5. DELTA is the most important Greek 1. It shows the amount by which the price of an option changes for every dollar move in the underlying. 2. It is a close equivalent to the probability to be in the money by expiration. 3. It shows the equivalent relationship of ownership of stock to options 4. It helps manage portfolios with a mix of positive and negative deltas (CALL Deltas are +VE from 0 to +1 ; PUT Deltas are -VE from 0 to -1)

9 OPTIONS CHECK LIST Key Metrics To Check 6. Volatility: Understand Implied Volatility vs Historical Volatility 7. Probability of being Tested is almost a certainty in most case below 2 standard deviations of 95% of probability or less (probability of touching 1.8*DELTA) 8. Implied volatility: what the market place is implying the volatility of the stock will be in the future, based on price changes in an option. 1. This figure is expressed on an annualized basis (like historical volatility). 2. Implied volatility is more interesting to retail option traders because it's forward-looking (which historical is not).

10 OPTIONS CHECK LIST Key Metrics To Check BELL CURVE EXAMPLE Theoretically there s a 68% probability that a stock trading at $100 with an implied volatility of 20% will cost between $80 and $120 a year later. Also there is a 16% chance it will be over $120 and a 16% chance it will be below $80. Remember, this is theoretical, as implied volatility is not an exact science.

11 OPTIONS CHECK LIST Key Metrics To Check 8. Implied Volatility Contd: 1. HIGH VOL: With DayTradingZones Tools or Daily Analysis Buy/Sell Zones Extremes SELL VOLATILITY WITH VERTICAL SPREADS/NAKED PUT/IRON CONDORS/STRANGLES (40-150% IV Percentile) 2. LOW VOL: Debit Spreads /Diagonals (0-20 and IV Percentile diagonals) 1. Risk 1 to make 1 on short term debit spreads 2. Risk1 to make 3 or more on long term leaps OR 1. Sell premium 2 Deviations out for a 90/95% chance of Success

12 WEEKLY OPTIONS The reward is big so is the risk. These are perfect with SPY options to substitute futures. DAYS AND SIZE TO TAKE THEM: 1 or 2 trades per day on THURSDAY and FRIDAY. ONLY small size and only 1 trade FRIDAY All with with stop losses. No more than 10% of your total option capital available shoud be allocated to weeklies. 10 spy options weekly contracts = 1ES 15 USO options contract weekly = 1 CL 1AAPL contract = 1 NQ Use TBT or TLT FOR ZB USE FXE FOR 6E (Euro futures)

13 OPTION STRATEGIES NAKED PUTS: 2 deviation out at least 85-95% probability of success CREDIT SPREADS: 66% probability of success or higher - 1/3 of the strike width for the premium minimum for monthly spreads. For Weeklies shoot for 65cents to 1.2$ with high probability. IRON CONDORS: same as credit spreads roll leg when delta are unbalanced to collect more also start directionally.

14 ZONES BUY CAUTION SELL + TRADE SET UPS + CLUSTERS + STANDARD DEVIATION DEVIATIONS 1sd ATM call + ATM put * sd AM call + ATM put * MINUTE CHART LIVE EXAMPLES

15 POWER OF THE MACD The Moving Average Convergence-Divergence (MACD) indicator is one of the simplest and most effective momentum indicators available. The MACD turns two trend-following indicators, moving averages, into a momentum oscillator by subtracting the longer moving average from the shorter moving average. Result, the best of both worlds: trend following and momentum. The MACD fluctuates above and below the zero line as the moving averages converge, cross and diverge.

16 4 TRADE SET-UPS Note: All 4 Set-Ups are valid for Short or Long Trades

17 All Your Capital In One Idea Or Trading Style! 100K Example

18 Power Of Diversification + STACKING Weekly & Monthly