Investors Observer Workshop. Wednesday, September 13, noon ET

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1 Investors Observer Workshop Wednesday, September 13, noon ET

2 Debby Clowney MBA, Chicago Booth BA, U. of Pennsylvania 20+ years options experience Worked on Wall Street Consultant for KPMG Workshop Coach: Debby Clowney Our goal today is to provide a workshop where we discuss how to translate the Trade Idea Generator s ideas into profitable trades. We will talk both concepts and practical tips to make and manage the trades. We encourage you to ask questions throughout the workshop. If you have a question, likely others have the same question. My colleague, Bobby Raines, will be joining us and fielding questions or bringing them to my attention as we go along. To get the most out of today s workshop, I will ask that you have your Trade Idea Generator launched and during the case studies that you follow along with me. Jot down names of stocks you would like me to review in the Firing Line portion of our workshop.

3 To get the most out of today s session, please launch Investors Observer. Disclaimer Today s webinar is for educational purposes only. Nothing in today s presentation should be considered a recommendation to buy or sell any security. All stocks and options shown are examples only. Any pricing or potential profitability shown does not take into account your trade size, brokerage commissions or taxes which will affect actual investment returns. Stocks and options involve risk and are not suitable for all investors and investing in options carries substantial risk. Past stock or option performance is no guarantee of future price appreciation or depreciation. Prior to buying or selling options, a person must receive a copy of Characteristics and Risks of Standardized Options available at:

5 What we will do in our STATE OF THE MARKETS What will drive the markets from here? What is the S&P weekly chart telling us about overall trends? Zeroing in on the S&P daily chart How is the Nasdaq doing compared to the S&P? How are small caps (the Russell) doing compared to the S&P? What is the volatility index telling us? How should market conditions guide our trades?

6 NASDAQ continues in the new parallel channel it created when it dropped below its uptrend line. After months with no progress, it is now testing new highs.

7 SPY -- broke below its uptrend line in August, but has regained it and is setting new highs

8 The Dow (DIA ETF) has regained its uptrend line and is now comfortably above it

9 International markets ex-us (VEU ETF) also fell below their uptrend line but have just now regained it

10 Small caps remain range bound as they have been all year consolidation 2 failed breakout attempts

11 What we will do in our STRATEGIES: Measuring performance. Comparing Covered Calls and Diagonals Evaluating three ways to measure performance Percent winners Annualized gains Profit factor

Which was more profitable if you invested the same amount in

12 Win rate vs annualized return Model Portfolio trades opened and closed in 2017 Which has a higher win rate? Which was more profitable if you invested the same amount in each strategy? Let s look at a more detailed breakdown to compare these two strategies

13 Comparison of covered calls portfolio and diagonals portfolio

14 Covered call trades opened and closed this year

15 What is a dead cat bounce? When sudden bad news on a stock comes out before the open, the stock will often sell off hard at first, as investors who don t like the news liquidate their positions After the selling panic subsides, the stock will often bounce. But since the effect of the bounce is often very transitory, this is often referred to by Wall Streeters as a dead cat bounce.

16 Important icons on your chart Most important Linear Regression, i.e., the channel the stock is trading in Let s look at how we can change the time frame

17 Important icons on your chart Comparing a stock to... the market its sector its competitors All Stock Futures Forex CFD Bitcoin Index Economy Quandl You can check a market index type in a sector description or ETF symbol type in a competitor s company name or symbol

18 Bollinger Bands When Bollinger bands NARROW that frequently precedes a large move up or down

19 Featured Trades

20 ALGN vs IHI, medical devices

21 How has MYGN done vs IBB over time? Have Bollinger Bands narrowing predicted large moves?

22 How has LPLA done vs XLF over time? Which of these covered calls is more attractive? What do the candlesticks tell us?

23 Investors Observer s Option Trading Framework 1 FIND Early exits with full profits Early exits partial profits 5 EXIT Featured Trades Trade Finder 2 CHOOSE Charts News Strategies 4 MANAGE Taking profits early when the market is under pressure 3 ENTER Order types What you need to know about your broker

24 1) Why is this position going against me? Wall Street saying: Hope is not traded on any exchange. 2) How do I feel about the underlying stock or ETF now? 3) What is my objective now that the position has moved against me? New Goal 4) Translate your new goal into an action plan.

25 What you can do when a position goes against you How do we decide which of these is best?

26 NEXT WORKSHOPS Next workshop: Wednesday, October 4, at noon Eastern time

Investors Observer Workshop. Wednesday, October 18, 4 pm ET

Investors Observer Workshop. Wednesday, October 18, 4 pm ET Investors Observer Workshop Wednesday, October 18, 4 pm ET Debby Clowney MBA, Chicago Booth BA, U. of Pennsylvania 20+ years options experience Worked on Wall Street Consultant for KPMG Workshop Coach: