IT S no mystery that the government, the media and those pulling the strings want you to believe a reality that

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1 Strategic Options Alert Trading Manual

2 Strategic Options Alert Trading Manual By Charles Del Valle, Editor of Strategic Options Alert IT S no mystery that the government, the media and those pulling the strings want you to believe a reality that doesn t exist. They suggest our economy is robust and that your well-being is always being looked after. We all know that s not the case. We have an economy that is, at very best, stalling out. Our jobs market is disappointingly weak. We re seeing an extreme corporate earnings recession, and retailers across the income spectrum are laying their employees off. Already, there have been announcements from Ralph Lauren, Wal-Mart, Gap, Sears, Macy s, Nordstrom and J.C. Penney. And recently, 47% of CFOs polled said they ve become more cautious on hiring and spending because of political uncertainty. Then there s the fact that the poorer half of Americans in this country are mad as hell. They haven t had a raise in years. Meanwhile, our middle class is slowly but surely shrinking, and a college education doesn t mean what it used to for job prospects. None of that paints a picture of an economy in full recovery. In fact, it speaks to the coming crash we consistently talk about in our monthly Strategic Investment newsletter. And since a market crash is on the way, we want people to be prepared. That s why James Dale Davidson, the founder of Strategic Investment, and I have made it our business to use logic and deep research to help our readers prepare for events few others would have ever predicted. And it s precisely why we ve spent over a decade creating and perfecting the system behind Strategic Options Alert a reliable way to make money, even if the market is crashing. So let me take a moment to say welcome and congratulations! I m Charles Del Valle, the editor of Strategic Options Alert, and I m confident that by joining this service, you ve made a wise financial decision that will help you ensure your wealth ahead of a market collapse. I m excited to get you started with this service so you can start making huge gains with our proven, proprietary system. That s why I ve put together this trading manual for you, which will cover the particulars of our system and the overall service. That way, you ll know exactly what to expect with Strategic Options Alert, and you ll be completely comfortable and confident when you make our trade recommendations. But before I get to that, let me give you a little bit more background on who we are The Strategic Options Alert Team James has always been ahead of the curve, which is why I teamed up with him over a decade ago. For about 40 years, he s been making predictions most analysts called absurd and then seeing events play out exactly as he called them. 1

3 For example, his 1987 book, Blood in the Streets, hit bookshelves early that year, predicting that the market was setting itself up for a historic crash. Just months later, that s exactly what happened when the S&P 500 lost 25% in a single day in October, forever known as Black Monday. Then, in 1989, he warned that Japan s booming economy was headed for a bust of massive proportion. The country s Nikkei stock market index peaked a year later and collapsed. More than two decades later, Japan s stock market and its economy have yet to recover. That same year, he even testified before the U.S. House Ways and Means Committee about the dangers of government-backed home lenders such as Fannie Mae. Few listened at the time, or to his repeated warnings in subsequent years. Yet in 2007 to 2009, Fannie Mae s structural weaknesses were proven to be at the heart of the nation s historic housing collapse. I could go on, but my point is that James Dale Davidson has a proven track record of making valuable predictions. He questions the status quo, and it routinely puts him ahead of the curve. That style of investing spoke to me. You can say my path to questioning the financial and monetary authorities started when I was young. I worked a job at a brokerage right out of high school because I was naïve enough to believe that I d learn to invest. Boy, was I wrong. Three months later, all I had learned was to sell stocks to people over the phone. So I went online (this was back in 2000) to seek out how to make money in the stock market. After hours of searching, I was dumbstruck by how little information was out there. There weren t many sites that taught you how to invest. And to the extent that there were, the theories and ideas were the same. It was mainstream advice for a mainstream investor looking to do nothing more than passively invest. That wasn t for me. I wanted something unique something better. So a few years later, I linked up with an investor who had done business around the globe. You could call him a contrarian. He liked to put money into companies that were hated. Then he d wait a few years until people loved the company again and he made a lot of cash. It s called value investing. And the contrarian nature of it all intrigued me. I learned everything I could from him and applied it to my own technique. James Dale Davidson has a similar idea when it comes to investing, which is why we make such a great team. Buy when everyone is telling you to do the opposite. He even invested in an Argentine bank when everyone thought it was crazy to do so and he made millions off that deal. It s this type of contrarian trading that got us started on the Strategic Options Alert system. We knew a crash was coming, and we wanted to code a system that would pinpoint massive gains no matter what the stock market did. So we gathered a research team, including Chad Shoop a highly sought-after market technician who has been instrumental in developing, refining and backtesting the system using a decade s worth of stock market data with the system s various indicators and algorithms. There are several other members of our team as well, such as a board member of the Chartered Market Technicians Association, so that there are no holes in the system and that anyone, no matter their age, net worth or investment experience, can execute our recommendations. Once we had our team, we started putting the system together. And after vigorously back testing it for the last decade an era that includes a 58% stock market collapse as well as 220% stock market rally one thing became glaringly clear: With this specialized team at the helm, the results are second to none. This system continues to defy expectations, finding one triple-digit winner after another. For example, it s shown gains like 2

4 142% on Brinker International in just six weeks. 149% on the defense company Raytheon in six weeks. 323% on Verisign in 10 weeks. 277% on Nvidia Corporation in eight weeks. And that s just to name a few of the gains we saw on the stocks that went up. But here s the incredible thing: Our system also showed the potential to rack up massive winners from stocks that went down and the gains came even faster. Some of those gains from the past two years include: 198% on Carbo Ceramics in three weeks. 168% on Axiall Corporation in two weeks. 192% on Carpenter Technology in three weeks. 178% on Tidewater in five days. So while the stock market went basically nowhere, this proprietary code helped our team pinpoint over 79 big gains often in under 30 days. And we could have made every single one of these gains without shorting stocks or going on margin or using risky investments, such as leveraged commodities. And while all these gains are great, they re nothing compared to the opportunities that will be available when the stock market crashes. Clearly, for those who position themselves strategically during the next crisis, there are fortunes to be made. So with that in mind, let s talk about inner workings of this system Our Trading System There are three primary signals we use to pick every investment: a ranking signal, which tells us what to buy; a market signal, which tells us why to buy; and a timing signal, which tells us when to trade. Let me start with the what to buy signal. What to Buy: We start with a universe of 6,000 stocks and whittle it down to around 1,500. We do this by only using companies that are listed on the major exchanges, have a share price above $5 and trade a minimum of 350,000 shares per day. Then we rank all of the stocks to find the top 100 and bottom 100, ideally. We do this every morning by calculating key statistics, such as The six-month rate of change in price. This tells us if the stock is likely to make a major move up or down in the next few weeks. Another key statistic is the 12-month free cash flow. This is especially critical if stocks start to sell off. If the free cash flow is low, a stock will get hammered. We also use ratios, such as the money spent on share buybacks divided by the company s market cap. By the time we re done, we can pinpoint the top two to three trades to make. So in a nutshell, our ideal goal is to identify the top 100 and bottom 100 stocks, before narrowing them down to the best two to three trades. 3

5 But it s not good enough for us to just follow a system blindly. Behind every stock-picking system there is a bigger story that helps us connect the dots. This is when we get to the why step, which becomes a lot more labor-intensive Why to Buy: We go behind the numbers and look at the individual stock, asking ourselves about its story. We search for things like: New product announcements. Negative news that investors may have missed. Or any other statistic that points to an anomaly that could either accelerate our profits or give us a reason to cancel the trade. Now, the third part of this system is when to trade. When to Trade: This is where the complexity of the system really starts to ramp up. It s the brains of the code. Here is the exact code we use to trigger the when : As you can see in the above image, the system is made up of some fairly complicated indicators. The Vix Fix, for example, is virtually unknown to most professional investors. I ve highlighted it for you in the image on the following page. The VIX also known as the Fear Index or the CBOE Volatility Index only applies to the S&P 500 Index. It allows you to measure the expected volatility (or fear) in the overall market over the next 30-day period. 4

6 When the VIX spikes sharply higher, it means that investors are buying more protection for their portfolio in expectation of a drop in the market. When the VIX wanders lower, investors aren t buying protection because they re confident the market is going to rally. But the VIX Fix allows you to measure the fear associated with individual stocks. Clearly, the VIX Fix is a powerful tool in its own right, but when used in conjunction with other indicators, such as momentum and moving average, it becomes a profit machine by telling us exactly when to get into the trade. So that s the code in a nutshell. It tells is us what, why and when. And the resulting profits have been enormous. Now that we know how the overall system works, let s get into how we ll be trading it How Will We Invest? For this service, we ll be using options exclusively to make our trades. For those unfamiliar with options terminology, I suggest taking a look at our Intro to Options video, which you can see by clicking here. We ll be buying both puts and calls, depending on the plays our system pinpoints. A call is our bet on the rise of the underlying stock. A put is our bet on the fall of the underlying stock. For the most part, we ll recommend options with short-term expiration dates. Typically, we intend to close out our call options within three months and put options within one month. If you re new to options, don t worry. Our options strategy is simple and straightforward, and your risk is always 5

7 capped. We only trade put or call options. We never initiate a position with a sell the equivalent of shorting a stock because that would expose you to too much risk. And with each trade alert, I will explicitly detail which contract to buy and at what price so that you can easily make the trade online or tell your broker all the details necessary to execute the trades. The only decision you ll need to make is how much to invest in each trade. You might be wondering why we decided to use options in this service. Well, trading options with Strategic Options Alert gives us distinct advantages: More Bang : With options, we can control more shares with less money than if we were to simply buy stocks/etfs. Each options contract is the equivalent to owning 100 shares of a company, yet the option costs just a fraction of the underlying share price. This is the power of leverage. Of course, leverage is a doubleedged sword, as it can also magnify losses. But we keep a close eye on these positions and will recommend an exit, if necessary. Less Risk: With each recommendation, you will know the exact dollar amount you re risking. And since options require much less capital than buying shares, you can spread your money across a larger number of investments. This diversification not putting all your eggs in one basket reduces our overall risk. Ease of Use: Too many retail investors shy away from options because the language of the options trading seems complicated. I understand that, and it s one of the reasons I m motivated to help you navigate the world of options easily. I ll give you easy to follow, step-by-step directions along the way. My trade recommendations will always give you full details on the investment I m recommending and the exact information you need to execute your orders. For instance, every trade alert incudes an Action to take that looks like this: Example only: Action to take: Set a Good Til Canceled limit order to buy to open the Microsoft (Nasdaq: MSFT) August 2016 $50 put option (MSFT160819P ) at $3. At last glance, it was trading at $2.80. I ll update you on the trade in my next alert. In this particular example, you would be placing a Good Til Canceled limit order to buy put options on Microsoft, ticker symbol MSFT, at a strike price of $50 for expiration in August The limit order should be set at $3. By using a Good Til Canceled limit order, you re basically telling your broker this: I want this order in place until I come back and tell you it s canceled or until it s filled. That s the Good Til Canceled part. You re also saying: This is the maximum I m willing to pay. That s the limit price, and it s to ensure that we don t end up overpaying for an option. I also provide the at last glance number: In this case, $2.80. That s the equivalent of $280 per contract, since each options contract represents 100 underlying shares of the company. And the long string of letters and numbers is the ticker symbol for this exact option. You can plug those instructions into your online options-trading account, or you can share the information with your broker when you re ready to make the trade. Once you get the hang of it, it shouldn t take you more than about five minutes to log in to your account and place your trade. If our limit orders do not get filled and sometimes they don t I will update you on the next action to take in my next dispatch. As for when it comes time to sell we will look at the stock and see if it s breaking below a major moving average or support line (if a call is in play) or see if it s breaking above a major average/support line (if a put is in play). We ll also look to sell if too much time has passed and we have more than a 50% loss. Finally, there will be times when we automatically sell half our stake when gains reach 100% so that we can lock in the triple-digit profit while allowing our trade to continue. 6

8 Check in With Your Broker It s likely that you already have a brokerage account, probably one that allows you to trade options. But if you don t have an account that has options capability, the list below provides the contact details for the options-trading firms that you can look into. If you do have a brokerage account in which you already trade stocks and ETFs, I recommend calling your brokerage firm to make sure it s set up to trade options, since that requires you to sign off on a different set of SECrequired disclosures. You may need to fill out a one- or two-page form indicating what options strategies you d like to trade. I will only recommend the most basic options strategy, buying puts and calls. Broker Contact Information Brokerage Website Phone Number Interactive Brokers com Toll free OptionsHouse Fidelity E*Trade ETRADE-1 OptionsXpress eoption TradeKing With all that said, here s what you can expect from the overall service What You Can Expect From Strategic Options Alert Each week, you ll receive a dispatch from me. Some weeks it ll include a new trade to make, other times an update. Every time we pinpoint a time to profit, I ll immediately send you an detailing what the opportunity is which can be on any day of the week, so keep an eye on your inbox. These will be quick s in which I ll tell you what to buy, what price to pay and why we are confident the trade is a winner. And when it s time to sell, I ll send a timely alert telling what option to exit and the price at which to sell. It ll be that simple. And although some trades can last as long as 90 days, right now we re seeing big gains in as little as 20 days. So expect to be trading at least once a month, if not more. If you choose, you can also use our text-messaging service, which will immediately alert you when I send out a new recommendation. That way, there is no chance of missing out on these profits. Click here to sign up. There is no cost to register, and it s open to U.S. and Canada residents. Once you ve clicked submit, just remember to check your phone for the final step in securing these alerts. It ll ask you to please text back CONFIRM_SOA to confirm that you ve signed up to the text service. If you ever wish to discontinue the text service, simply reply by texting STOP SOA or by contacting our customer service department at Just keep in mind that typing STOP SOA will not discontinue your subscription, only the text-messaging option. I ll also send Flash Alerts when there s any market turbulence or an investment makes an unexpected move. 7

9 We re constantly watching the market, and I ll keep in touch with you on how it s doing. That s why, when we don t have any trades, I ll be sure to send you a quick update on the portfolio and the sectors related to our holdings so that you re always in the loop. In every dispatch, you ll also receive a link (which you can find at the bottom of the ), with the updated portfolio. This will show you every open position, the entry price, when the recommendation was made, its current price and the total open gain. With your subscription, you also have access to our dedicated customer service team, a well-trained group who can help you with any questions you might have about your subscription. As I mentioned above, you can contact them here: And because we always enjoy hearing from you, I encourage you to send me any thoughts or questions you have about the service. Occasionally, I will highlight a few of your thoughts in a mailbag issue though I assure you we won t reveal your identity. To ask us a question or share your thoughts, you can reach us at strategicoptions@sovereignsociety.com. And with that, I d like to welcome you once again to Strategic Options Alert! Remember, by following my trade alerts, you will be given the opportunity to make massive gains using our proprietary system, and I will be sure to make everything as simple, easy and accessible to you as possible. I look forward to helping you start pocketing large profits no matter what the stock market does. Regards, Charles Del Valle Editor, Strategic Options Alert 8

10 The Sovereign Society 55 NE 5th Avenue, Suite 200 Delray Beach, FL USA USA Toll Free Tel.: (866) Website: Legal Notice: This work is based on what we ve learned as financial journalists. It may contain errors and you should not base investment decisions solely on what you read here. It s your money and your responsibility. Nothing herein should be considered personalized investment advice. Although our employees may answer general customer service questions, they are not licensed to address your particular investment situation. Our track record is based on hypothetical results and may not reflect the same results as actual trades. Likewise, past performance is no guarantee of future returns. Certain investments such as futures, options, and currency trading carry large potential rewards but also large potential risk. Don t trade in these markets with money you can t afford to lose. Sovereign Offshore Services LLC expressly forbids its writers from having a financial interest in their own securities or commodities recommendations to readers. Such recommendations may be traded, however, by other editors, Sovereign Offshore Services LLC, its affiliated entities, employees, and agents, but only after waiting 24 hours after an internet broadcast or 72 hours after a publication only circulated through the mail. (c) 2016 Sovereign Offshore Services LLC. All Rights Reserved; protected by copyright laws of the United States and international treaties. This Report may only be used pursuant to the subscription agreement. Any reproduction, copying, or redistribution, (electronic or otherwise) in whole or in part, is strictly prohibited without the express written permission of Sovereign Offshore Services, LLC. 55 NE 5th Avenue, Suite 200, Delray Beach, FL

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