Trade Set-Up Maximizer. Module 4 Review 4 Key Principles Big Mistake To Avoid Action Items To Take

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Estella Carroll
6 years ago
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Figures and information provided refer to the past and past performance and are not a reliable indicator of future results.

1 Disclaimer The VectorVest Program ( the System ) which we promote is not intended to provide you with specific or personalized advice. In all circumstances where you are looking to apply the System to your own personal needs you should consider whether you should first seek advice from a suitably qualified investment professional. Figures and information provided refer to the past and past performance and are not a reliable indicator of future results. Where stocks are quoted in foreign currencies, returns may increase or decrease as a result of currency fluctuations. In the event that you, as a recipient of this presentation, have any doubts as to the suitability of the investments or services promoted you should seek advice from a suitably qualified investment professional. You should be aware that the value of shares and other stocks may rise or fall. The rules on tax can change, and these changes may have an influence on the effectiveness of the System in the future. It is for you, as the tax payer, to assess the System s effectiveness throughout the process. Some assets are more readily realizable than others, and you should bear in mind that it may be difficult to deal in or obtain reliable information about their value. You should always take account of dealing charges. In addition to any initial charge quoted there may also be a bid/offer spread or dilution. Investments in options and other forms of derivatives may expose you to a higher degree of risk given market circumstances relative to other forms of quoted investments. The System even if used in its entirety, cannot be guaranteed to provide specific returns in the short, medium or long term and you should bear in mind that individual securities may and can fluctuate considerably in value from day to day. The System has been designed without any reference to the specific interests of a particular investor. We reiterate, when using the System, you must take into account your own specific needs and liabilities. This financial promotion has been approved by European Financial Publishing Ltd trading as VectorVest UK which is authorized and regulated by the Financial Services Authority under Register No European Financial Publishing Limited is a company incorporated in Scotland under Company Number SC with its registered address at Exchange Tower, 19 Canning Street, Edinburgh EH3 8EH. 1

2 Trade Set-Up Maximizer Module 4 Review 4 Key Principles Big Mistake To Avoid Action Items To Take 2

3 Trade Set-Up Maximizer 3

4 Multiple Graphs To Look At Don t Get Paid Enough 4

5 Key Principles To Get Paid Top $$ 1 5

6 Remember this from Module 1? Use the Over/Under Priced Indicator as your guide to cheap vs. expensive Option Premium 6

7 Focus your trading on areas where Volatility is likely to decline. When Volatility rises an expensive option becomes even more expensive & can kill your trade! 7

8 Let s look at 4 Scenarios of Selling a Put on Tesla to better understand how Price & Volatility can affect the option price. This models selling the 180 Put on TSLA on May 10. 8

9 Scenario #1: Stock rises. Volatility stays flat. Result: You hit 50% profits in 8 days! Scenario #2: Stock stays flat Volatility stays flat. Result: You hit 50% profits in 15 days. 9

10 Scenario #3: Stock rises. Volatility rises. Result: You hit 50% profits but in 16 days! Scenario #4: Stock stays flat. Volatility rises. Result: You hit 50% profits but in 25 days! 10

11 Volatility Rises Volatility Flat Stock Rises 16 days 8 days Stock Flat 25 days 15 days Focus your trades to where the options are the most overpriced or have the lowest chance to have an increase in volatility. 11

12 And not here Because sometimes seven days can be the difference between a gain and a loss! 12

13 Case Study #1 Date: 4/13 Stock: TSLA Trade: Bull Put Volatility: Overpriced BUT Options are overpriced but below the average highs. 13

14 Choose a 235 / 225 Spread Based on the 30% ITM criteria. Profit target = $140 per contract (50% of the $280 credit) 14

15 The most you were ever up was $38, not enough to take profits. What if you had waited until Volatility was closer to the average highs? 15

16 Case Study #2 Date: Stock: TSLA Trade: Bull Put Volatility: Overpriced & near avg highs 4/22 (9 days later) Choose a / Spread Based on the 30% ITM criteria. 16

17 Profit target = $207 per contract (50% of the $414 credit) Profit hit, a few days later 17

18 And seven days later? Big Loss 18

19 The recurring theme of the Paycheck concept is to limit market exposure, because as we saw A lot can happen in 7 Days. 19

20 2 VV Search Matrix 20

21 The Matrix is a powerful option scanner that c Starting with the UniSearch we scan for Safe and Sound Stocks 21

22 Press the OptionsPro button to transfer the results to OptionsPro Choose Bull Put Spread 22

23 Your UniSearch Results Send them to the Matrix 23

24 Matrix Scans to find Overpriced Options How To Maximize Results 24

25 Scan #1 Click on the DT Scan dropdown: 25

26 Under Advanced Scan select, Stocks w/overpriced Options Results are listed in order based on the highest difference between Implied Volatility (IV) and Historic Volatility. (HV) 26

27 Right click on a symbol & chart the results. SCLN is overpriced, but lower than historical highs 27

28 LUV is near the highest historical levels of volatility. HA has a better chance of volatility moving higher. Not a good option to sell. 28

29 ProTip: Don t overlook stocks at the bottom. They still can be near the top of the volatility range! Scan #2 29

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31 Benefits Drawbacks ULTA is actually underpriced & volatility has a greater chance of increasing. Not a good candidate. 31

32 This is what you could also get And this 32

33 The Matrix allows you to focus quickly on the best stocks with the highest volatility. 3 33

34 VV Search Matrix Filter Quick Review 34

35 We have a large list of Stocks w/ Overpriced Options from Scan #1 Save this list as a new Scan List 35

36 These are only the Overpriced Options from the original Safe and Sound scan. Set the Matrix to scan for Option Symbols 36

37 Filter for the best candidates to sell. Down to one stock, and you now know the right options to build a spread. 37

38 VV Search Matrix Filter 4 38

39 Remember, there are four types of trades If this is the result of your searching, it s not necessarily bad. 39

40 It s not about trading for trading sake. You want the Right Trades, with the Proper Option market conditions. 40

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Trade Management Game Plan. Module 5 Review 5 Key Principles Trade Management Techniques Big Mistake To Avoid Action Items To Take

Trade Management Game Plan. Module 5 Review 5 Key Principles Trade Management Techniques Big Mistake To Avoid Action Items To Take Disclaimer The VectorVest Program ( the System ) which we promote is not intended to provide you with specific or personalized advice. In all circumstances where you are looking to apply the System to