Good news! Andy Crowder recently joined forces with Cabot Wealth Network. Nothing about your free membership will change, but you will begin receiving your news from Andy under the Cabot Options Institute letterhead. Andy joined up with Cabot Wealth Network because it has a long track record of successful investing advice for 50+ years. He will still be sending his usual free content from there 3x per week – and you’ll also begin to receive one weekly bonus report from Cabot on different relevant investing topics. And we’re very excited to announce that Andy will also be making his premium con ..read more

Nothing has changed! Volatility continues to remain high across the board. In fact, volatility in SPY has increased over the past few weeks. Moreover, the IV rank and IV percentile of SPY remain high, which means there are plenty of opportunities to use a variety of different options selling strategies. As I’ve stated numerous times in the past, as volatility increases (or at least remains above normal levels), trading opportunities increase, which opens up the options playbook significantly. Bear call spreads, among other credit spreads (bull puts, iron condors, etc.) using highly liquid ETFs ..read more

With most of the major indices in or nearing bear market territory lots of investor are kicking themselves about how they have managed their respective losses since the year began. It all starts with position-size. Without it as you first line of defense, you will fail. It’s just a matter of time. Think of yourself as a risk manager first, trader second and you will be well on your way to long-term success. But you have to master the first, before having success with the second. Unfortunately, it’s profits, profits, profits, that most traders, particularly newbies, think about when placin ..read more

High-Probability Mean Reversion Indicator (ETFs Heading into the Week of May 23, 2022) Below is my list of ETFs with the most liquid options for the week of May 16. Here are the various levels I use to determine if an ETF is in an oversold or overbought state. Very Overbought – a reading greater than or equal to 90.0 Overbought – greater than or equal to 75.0 Neutral – between 20.0 and 75.0 Oversold – less than or equal to 20.0 Very Oversold – less than or equal to 10.0 I will provide this information for the following ETFs on a weekly basis going forward. Stay tuned! Some m ..read more

Nvidia (NVDA), Costco (COST) and several other names are due to report next week. Be on the lookout for a few follow-up posts with trades in Costco and possibly several others. Stay tuned! As I say each week, taking the conservative approach continues to be consistent and profitable. Remember, it’s all about allowing the Law of Large Numbers to work for you. Risk management is the real key to successfully trade earnings. Get in, get out, move on. In almost every case, adjusting is a frivolous task and only leads to additional losses. Allow the Law of Large Numbers to work in your favor by ..read more

It seemed like for over a decade many retail investors forgot that bear markets exist. It was always assumed the market would continue to trudge higher…forever. Yes, those in the know understand the pain of bear markets, but for many that haven’t truly experienced a bear market, with their own capital, well, the last few months have been a rude awakening. But the part that truly fascinates me, is the neglect to realize that buy and hold isn’t always the answer to long-term investing. Yes, I am a buy and hold investor. But I’m also an options trader that works my trades round my current “buy an ..read more

As always, if you have any questions, please feel free to email me or post your question in the comments section below. And don’t forget to sign up for my Free Weekly Newsletter for weekly education, research and trade ideas. Walmart (WMT) is due to announce before the opening bell Tuesday. So, as always, let’s go through the exercise of looking at a potential trade and its associated mechanics to see if WMT is offering a decent trading opportunity this time around. Here is an early look at a potential earnings trade for next week. Hopefully this helps a few of yo ..read more

As always, if you have any questions, please feel free to email me or post your question in the comments section below. And don’t forget to sign up for my Free Weekly Newsletter for weekly education, research and trade ideas. Credit spreads have been the strategy of choice during what has been a bull market in volatility. With volatility well above normal levels, options premium is inflated which means lots of wonderful opportunities to sell options. Now I’m often asked, “What’s the best stock for credit spreads?” Admittedly, as a quant-based options trader, I’m dumbfound ..read more

Below is my list of ETFs with the most liquid options for the week of May 16. Here are the various levels I use to determine if an ETF is in an oversold or overbought state. Very Overbought – a reading greater than or equal to 90.0 Overbought – greater than or equal to 75.0 Neutral – between 20.0 and 75.0 Oversold – less than or equal to 20.0 Very Oversold – less than or equal to 10.0 I will provide this information for the following ETFs on a weekly basis going forward. Stay tuned! The post High-Probability Mean Reversion Indicator (ETFs Heading into the Week of May 16, 2022 ..read more

We are moving towards the tail end of earnings season. Walmart (WMT) and Home Depot (HD) will be the highlights next week with a few other names worthy of a glance. Be on the lookout for a few follow-up posts with trades in both WMT and HD. As I say each week, taking the conservative approach continues to be consistent and profitable. Remember, it’s all about allowing the Law of Large Numbers to work for you. Risk management is the real key to successfully trade earnings. Get in, get out, move on. In almost every case, adjusting is a frivolous task and only leads to additional losses. All ..read more