This gentleman truly offers great investing ideas to consider, and definitely deserves a HUGE number of subscribers! Please share his wisdom with all your friends!👍👍🥇
What's interesting is in a bear market (or for overbought stocks) the same thing can be done by buying puts ATM or ITM. And in addition to that, all of the gains / losses here were if one decided to hold until expiration. If you actually cut your losses much much sooner than the expiration, the returns would be even better.
bro got a calculator to multiply a percentage through the year 😭 i guess i just over estimate the general public’s capabilities. thank u for all the useful info bruh 🙏🏼
I am working this strategy into my paper trading account. Even in this psychotic choppy market, one can use oversold indicators as a trigger to enter trades along with other technical signs. Practice makes us better, never perfect.
You might also find the 20-day MA and 50-day MA indicators worth using in tandem with the RSI chart because then you can truly enter and not make too big an initial unrealized loss over the first few hours or couple of days. As I've learned over the years, patience is key... as is forgetting you bought stocks.
Thank you for making this video and dispelling the notion that buying calls is risky but if done the right away can be very profitable. The back testing is golden.
I've been finding buying calls In The Money highly profitable. Same with buying puts when any one company is in a bear cycle spanning 2.5 years or so. I tend to find myself making long call and long put orders with expiration dates one month or longer. Map out the cycle and you're all set to ride both the bull and bear market.
Of you buy a out of the money options with a month or two out using the nearest support or resistance level as a strike price. Volatility alone will make you money
Absolutely brilliant. So much better than trading Online CFDs with 1:1000 leverage. This is the real stuff. Much appreciated the insights my friend. God Bless You.
Wow, what an amazing video. I was wondering about at the money calls for a stock on which I'm bulling, purchasing them with an expiration time of one year, because of the delta those have. You know how sometimes you think you've come up with an amazing idea that's going to give you an extra edge in the stock market, only to find out the hard way that there was a flaw in your thinking. So you confirmed my hunch about this. Something that I like a lot is the fact that your reward to risk ratio is in your favor. I got burned today with several shares of NVIDIA I was holding. To think that with all the money I lost I could have gotten into this type of strategies, just blows my mind. Thanks a lot!!
Thanks for the insight. I'll have to give it a look. I've been liking trading leaps and generally sell leaps puts at the same price that I buy leaps calls to lower the initial credit. Worst case scenario, you get put into shares at a price that you were willing to pay. If the trade goes your way, the put goes worthless, you collect current interest (around 5% on your money) and whatever the call makes you. Keep up the good work.
@@Giggidygiggidy12 Sorry, but this trade is extremely risky, with huge downside potential. It's basically selling a naked put. There is no downside protection, and any stock can see a significant decline over a year's time frame. It's much less risky to just buy the leaps long call. At least you've established your maximum loss at the premium you paid. Now, if you don't hold to maturity, that's a different story. Be careful!
Smart dude MC is the best. I use that to learn how to trade put spreads and then made my own scanner that gave me trades that I had 96% win rate. Only knock on mc is they don’t have spx option chain
Interesting...thanks for sharing this information. Problem with all "hold till expiration" strategies is that the probablities eventually sum to zero, so in the long run regardless of how wonderful it is in the back test, the losses will wipe out your winners. "but I only untilize this in bull markets" - okay
You buy long calls, leaps far out in time and sell short 1 t-6 week calls against them. If the underlying is SCARY BUY A PUT with enough time on it to cover how long you think you will hold your call. I will reduce the percent returns, but prevent you from getting arse hammered of the underlying decides to death dive.
New subscriber here. I am a female who just started options trading about 2 months ago. I have watched countless videos on trading options, and yours explained LEAPS and their profit potential the best. I already knew they were powerful. The one thing I am surprised to learn is the fact that "out of the money" brought in much higher profit percentages. But I thought the "deep in the money call" would have produced bigger profits than out of the money due to DELTA being higher in the money? I guess it is more complex than that. In that case, I plan to start buying slightly out of the money from now on and save on the premiums. ❤❤😍 Thanks a million.
Yeah, the higher delta is great for the deep ITM long Calls. But as far as profit percentages go, ROI = (Profit/Investment)*100. The deeper ITM the long Call is, the higher the "Investment" value is (the lower the ROI). But ITM long options have a lower break-even value than OTM long options, so what you give up in potential ROI, you make up for in higher probability of profit. It is a give and take.
@@yieldcollector oh I see. So if someone has the capital to buy ITM it makes sense to do that. A win is a win either way. Thanks for educating us. 😊👏🏽👏🏽
Curious, can you apply buying puts on a bear year…same strategy, different direction - curious what 2022 what yield. thanks for demonstrating Market Chameleon!
Here’s how I’ve done it and tripled my returns with a staggering 85% win rate. Find a company with momentum that’s lost on earnings or similar and buy calls that reach out 1-2 earnings(or more). Generally these companies earn their way back up and you’ll get what you’ve earned.
Take a look at MSFT simply buying the ATM call with 4 DTE. Market Chameleon shows a win rate of 42.7% with a average return of 18.6% What are your thoughts on that trade annualized?
I'm a newbie and I'm planning to do the Wheel Strategy in the beginning, but this looks great as well. So where do you set the strike price to buy with these numbers? And what do you use to decide if it's a bull market? Using any specific indicators or what is your thoughts on that?
Tough questions! If were just to buy Calls like in this video, I would probably choose the strikes which are slightly in-the-money that are 90 days away. Personal preference though. As far as overall market conditions, I try not to complicate things too much. I look at an overall 1 year chart of the major indices and draw a line for highs and lows. Is the chart showing higher highs and higher lows? Or lower highs and lower lows? Or indecisive with lower highs and higher lows? I also look at the 200 day SMA. Is price above or below it? Is the SMA sloping up or down?
I depends on whether or not I thought it would go up again (looking at the chart) and what the overall market is doing. It also depends on how much time is left. I have definitely closed them early for a loss before if I think that it's the best thing for a bad situation. You can always roll it (for a loss) to a better strike and expiration, too. You could see if that makes sense. It's hard to give a definitive answer because it's situational (at least for me). Some people probably have strict rules about when to close trades. I don't really.
Thanks. I usually lose money in a Bear market the same as everyone else 😁. But if you were good at knowing when the market changed, simply buying Puts or Put debit spreads would do very well.
Sorry I haven't made many videos lately. Just haven't been in the mood for it 😔. I pretty much trade the Wheel Strategy exclusively now. Slow and steady gains are what I go for.
Great video! Only one comment: You said that the options get cheaper the further out in time you go (ex: 3 months out - 7:47 in video), yet thats not the case. The more time you have for an option to expire, the pricier it gets. You can even compare the ask prices in both the 7 day and the 3 month options chains in your video and see that the asks are greater in the 3 months chain. I think it might have been a mix up. Thanks for the video!
It is very stock specific. Once you get to ATM and go ITM that's when the win rate is usually best. Some stocks never make it above 50% win rate at all. It is hard to make a blanket statement about all stocks.
Great video. Question: do you use both this and option alpha presently? Seems there’s some overlap, but I’m new to options trading. At work I’m a BI and AI guy, so the application isn’t an issue - it’s the decision on the tool set I’m interested in. Thanks!
Yeah I use both of them. There is definitely a lot of overlap, especially since OA introduced "Trade Ideas" for manually finding trades (which is a cool feature). OA is mostly for auto trading and I use MC for finding individual trades. MC really shines when finding earnings trades (which is what I use it for most). It doesn't bother me to have 2 subscriptions since I use OA with Tradier so my OA is free.
@@yieldcollector thanks very much. I have OA as of this week and I’ll subscribe to MC. As a newer options trader (lots of years in stocks), the barrier to entry is knowledge- at least for me. The investment in these tools seems almost nothing to me compared to the gains they offer. Thanks again!
Yeah as a newer options trader, MC and OA can feel overwhelming I would imagine. For OA the live beginner workshops are great app.livestorm.co/optionalpha/beginner-demo . For MC, there is a learning curve and not many places to learn it lol. That's why I try to make videos about it. @ttfweb1
Not sure whether you realized it or not. The win rate is easy to see from delta. If ATM strike is 0.50 delta, then the win rate is 50%. If delta is 0.2 (OTM), then the win rate is 20% (80% chance that it would expire worthless). If it is 0.8 delta then win rate is 80% as 20% chance of expiring worthless.
The delta values are a quick way to see approximate probabilities. With Market Chameleon, the actual win rate of each strike is calculated using actual backtested results. That is entirely different from probabilities.
That's not what delta IS, though, or even supposed to be. Look at his chart, it shows 0.8 delta winning 50% of the time and the 0.5 delta winning 39% of the time.
@@tonyrichmond9428 I understand. But in Options world, they say, if the strike is 20 delta then 80% chance that it is going to be OTM (or 20% chance that it is going to be ITM). So, indirectly, it is the odds of winning.
If you have a 41% win rate that also means you have a 59% loss rate. Not great. But, pair a lower return with a higher win rate AND do an Iron Condor and you'll make more money safer. Just my two cents.
I liked this video. So what trade are you in right now? I hope you can share. I have been losing two 0DTE on SPX in the last 4 weeks and it wiped out almost all my buy power as I was stubborn and didn't place a stop loss.
Thanks. I'm not in any long Call trades. I'm in like 20 Wheel Strategy trades right now. Some are newer, some I have been rolling for the last 6 months.
@@TheBookologistChannel Because I'm an idiot 😂. I've had a pretty good year with the Wheel Strategy, but I definitely would've made a lot more if I'd just bought long Calls.
I would like to make that because I am curious about the results as well. But this Market Chameleon option chain backtester uses the last 4 years of data to get the results. I can't really isolate it to only check during bear markets, so the overall results will look terrible because of that. Although I just checked in the list of trades in the results and the Puts performed well for 2022 for what it's worth. If you are good at market timing, buying Puts at the right time seems to be a great strategy.
Looks like EXPE might be a decent target for this strategy, developing a nice base around 90.00, looks like it created a higher low recently, thoughts. What does market chameleon show for EXPE?
I just looked, and the backtest for EXPE wasn't good. There is a free 7-day trial if you want to screen other stocks marketchameleon.com/Subscription/Compare?pap_aid=YieldCollector
If you're EXTREMELY bullish on something, you could finance your long calls by selling puts. This is best if you're extremely bullish AND you're okay with owning the underlying stock (in case it goes against you and your puts get assigned).
It depends if the underlying goes up or down in that time. If it goes up you will most likely be able to sell it for a profit, and if the underlying goes down you would sell it for a loss. It all depends on how much the underlying moves.
The backtest results from the video are showing what happens when you hold the Calls to expiration. That seems like the best way to capitalize on the huge gains. I haven't actually done much straight up Call buying. I usually only buy Calls when trading spreads. Making this video changed my mind though. I will be doing a lot of Call trades from now on. I will hold them as long as possible to try for some "Home Run" results. Easier said than done, though. As part of a spread trade, I usually close them out early when they are near full profit potential.
@@yieldcollector I never buy 6 months expiration or leap options as well. So, not sure in this market situation, the longer you hold is a good idea due to the uncertainty and time decay. Maybe, close out the position when gaining 50% (just my thought).
I haven't really traded them. Although in hindsight I wish I would have, because I imagine that the strategy would have performed really well over the last year.
it is easy when assumed trajectory of the market is in one direction, the market is in a bull run but it only takes one world conflict to shake things up so no buying options is not a smart strategy IMO because this is not reflective of how options work when prices of stocks are not going up like they have been lately as one week long call will melt away in time decay faster than an ice cube on a hot pan in value
this video 11 months ago, you wished you bought long calls 😂, im just learning options now, i was trading cash and margin only, and already see the benefits of options and looked for techniques and found your vid
its not as easy as your explaining it those are just very optimistic valuations . your win rate is high only because of theta as u get closer to your DTE you see how those change . it also comes down to how you manage your position as you get closer to your expiry date .
@@yieldcollector I come from the forex world and we usually collect, 2:1, 3:1 risk reward for trades but for some reason with options it’s less than or equal to 1:1? Which i don’t quite understand.
@@SimplyScalping You can understand the leverage when you look at the delta of your strike. The delta shows how much an option price would change for every $1 move in the underlying. So lets say you buy the 100 strike NVDA option that expires Oct 18th (89dte) for $24.30. That would cost you $2,430 for 1 contract which represents 100 shares. It has a delta of .80 which means that the option price will increase $.80 for every $1 move upwards. This gives you much greater leverage than buying the 100 NVDA shares outright (which would cost $11,800) .
I can’t disagree more on long strategies. The only problems with “back testing”, is it works till it doesn’t. It’s curve fitted. Selling premium is the only way to be consistent in my opinion. I’ve done both fir a very long time and selling has yielded the best returns. The only long positions I have are if I’m assigned stock from a short put. I’d compare my portfolios with any long trader. I use to use a system called vector vest and back tested till I was a trillionaire. It works on computers but not in the real world.
I have yet to meet a trader with my gains: Penny stock, low-range break, equal dollar value each company, well over 100 companies per set-up, losses cut at about 25%, first 100% gain of each stock sell half the position, unless it supernovas, then sell all on the spike's first 1-day chart head-and-shoulders top. Holding time is 1 day to 1 1/2 years. Average holding time 1-6 months. Gains/losses/fees & commissions all factored in leaves a massive profit. Tax liability is low also due the the low portfolio turnover, unlike "successful" day trader with 270 setups a year. I will put my market gains up against anyone else's.
@@yieldcollector do you have any videos for small accounts or people starting out? I'm about a year into my options journey. So far been selling puts and covered calls.
If you have a smaller account, I would recommend doing Poor Man's Covered Calls instead. I made a video about how to trade this strategy th-cam.com/video/ZpWGmz39pFQ/w-d-xo.html . I also made a video on how to choose stocks for the PMCC trade th-cam.com/video/-oqqI05E67s/w-d-xo.html .
I am not sure if Vanguard allows PMCC trades or not. I have accounts at TD Ameritrade and Schwab and they both allow you to do it. TD is merging with Schwab soon, so I recommend Schwab. Also, you need to be approved for trading spreads (whichever broker you choose).
the fact you didn't know you were in a bull market at recording the video is why the whole approach is BS. Main take aways: buying is good when in bull, but we can't know when we're in bull. Gotcha!
This gentleman truly offers great investing ideas to consider, and definitely deserves a HUGE number of subscribers! Please share his wisdom with all your friends!👍👍🥇
What's interesting is in a bear market (or for overbought stocks) the same thing can be done by buying puts ATM or ITM. And in addition to that, all of the gains / losses here were if one decided to hold until expiration. If you actually cut your losses much much sooner than the expiration, the returns would be even better.
That’s what I do. Don’t get greedy and increase risk. Sometimes I miss a home run but sometimes I avoid cutting all my gains
Very true!
I have been doing this strategy for the last 6 months. It’s nice to see it back tested. Just a rookie trader
bro got a calculator to multiply a percentage through the year 😭 i guess i just over estimate the general public’s capabilities. thank u for all the useful info bruh 🙏🏼
You just taught me a lot in 18 minutes. Thank you.
hows it going 7 months later?
I am working this strategy into my paper trading account. Even in this psychotic choppy market, one can use oversold indicators as a trigger to enter trades along with other technical signs. Practice makes us better, never perfect.
Sounds like a good plan.
You might also find the 20-day MA and 50-day MA indicators worth using in tandem with the RSI chart because then you can truly enter and not make too big an initial unrealized loss over the first few hours or couple of days. As I've learned over the years, patience is key... as is forgetting you bought stocks.
Thank you for making this video and dispelling the notion that buying calls is risky but if done the right away can be very
profitable. The back testing is golden.
I've been finding buying calls In The Money highly profitable. Same with buying puts when any one company is in a bear cycle spanning 2.5 years or so. I tend to find myself making long call and long put orders with expiration dates one month or longer. Map out the cycle and you're all set to ride both the bull and bear market.
Of you buy a out of the money options with a month or two out using the nearest support or resistance level as a strike price. Volatility alone will make you money
Absolutely brilliant. So much better than trading Online CFDs with 1:1000 leverage. This is the real stuff. Much appreciated the insights my friend. God Bless You.
Thank you for your generous sharing of great analytical tools and strategies.
Wow, what an amazing video. I was wondering about at the money calls for a stock on which I'm bulling, purchasing them with an expiration time of one year, because of the delta those have. You know how sometimes you think you've come up with an amazing idea that's going to give you an extra edge in the stock market, only to find out the hard way that there was a flaw in your thinking. So you confirmed my hunch about this. Something that I like a lot is the fact that your reward to risk ratio is in your favor. I got burned today with several shares of NVIDIA I was holding. To think that with all the money I lost I could have gotten into this type of strategies, just blows my mind. Thanks a lot!!
Thanks for the insight. I'll have to give it a look. I've been liking trading leaps and generally sell leaps puts at the same price that I buy leaps calls to lower the initial credit. Worst case scenario, you get put into shares at a price that you were willing to pay. If the trade goes your way, the put goes worthless, you collect current interest (around 5% on your money) and whatever the call makes you. Keep up the good work.
Russell explain that in a little more detail please
@@Giggidygiggidy12 Sorry, but this trade is extremely risky, with huge downside potential. It's basically selling a naked put. There is no downside protection, and any stock can see a significant decline over a year's time frame. It's much less risky to just buy the leaps long call. At least you've established your maximum loss at the premium you paid. Now, if you don't hold to maturity, that's a different story. Be careful!
I want to leave a comment that I really appreciate your videos and learn alot.
Amazing insight on how to buy calls. Thank you for pointing it out.
Clear, easy to understand and very helpful technical analysis. Thank you so much!
Smart dude MC is the best. I use that to learn how to trade put spreads and then made my own scanner that gave me trades that I had 96% win rate. Only knock on mc is they don’t have spx option chain
Care to share what metrics the scanner had to get this win rate? Thanks
you have that scanner you can share on github or somewhere else?
great video! exactly what i was looking for
Interesting...thanks for sharing this information. Problem with all "hold till expiration" strategies is that the probablities eventually sum to zero, so in the long run regardless of how wonderful it is in the back test, the losses will wipe out your winners. "but I only untilize this in bull markets" - okay
You buy long calls, leaps far out in time and sell short 1 t-6 week calls against them. If the underlying is SCARY BUY A PUT with enough time on it to cover how long you think you will hold your call. I will reduce the percent returns, but prevent you from getting arse hammered of the underlying decides to death dive.
New subscriber here. I am a female who just started options trading about 2 months ago. I have watched countless videos on trading options, and yours explained LEAPS and their profit potential the best. I already knew they were powerful. The one thing I am surprised to learn is the fact that "out of the money" brought in much higher profit percentages. But I thought the "deep in the money call" would have produced bigger profits than out of the money due to DELTA being higher in the money? I guess it is more complex than that. In that case, I plan to start buying slightly out of the money from now on and save on the premiums. ❤❤😍 Thanks a million.
Yeah, the higher delta is great for the deep ITM long Calls. But as far as profit percentages go, ROI = (Profit/Investment)*100. The deeper ITM the long Call is, the higher the "Investment" value is (the lower the ROI). But ITM long options have a lower break-even value than OTM long options, so what you give up in potential ROI, you make up for in higher probability of profit. It is a give and take.
@@yieldcollector oh I see. So if someone has the capital to buy ITM it makes sense to do that. A win is a win either way. Thanks for educating us. 😊👏🏽👏🏽
Hope you did do the long calls and made ton of money and that is,why we don't see new content. But you have the best material and we hope to see more.
Thanks. I'll be back to making more videos at some point. I just wanted a TH-cam break for awhile.
Awesome video! Thanks for sharing your insights, I will definitely be buying 3 months out.
Thank you sir
Please do more videos like this on stock options
Curious, can you apply buying puts on a bear year…same strategy, different direction - curious what 2022 what yield. thanks for demonstrating Market Chameleon!
I don't have the data on it, but I imagine you would've made a killing if you were buying Puts in 2022.
I buy call spreads for $25-$35 at entry points Of the days highs or lows and sell all at $95. 3 times gain.
Here’s how I’ve done it and tripled my returns with a staggering 85% win rate. Find a company with momentum that’s lost on earnings or similar and buy calls that reach out 1-2 earnings(or more). Generally these companies earn their way back up and you’ll get what you’ve earned.
Take a look at MSFT simply buying the ATM call with 4 DTE. Market Chameleon shows a win rate of 42.7% with a average return of 18.6% What are your thoughts on that trade annualized?
Wow, that looks impressive.
Hey brother...excellent video! I'm a full on LEAP trader...I had no idea about this Chameleon site. Are you using the paid subscription?
Thanks. Yeah I'm on the paid subscription.
Whats your thoughts on a 10C jan 2027 leap for GME?
@@flex2125 I only trade spy and qqq.
Excellent video! Thanks. It would be great to see also this strategy with the spy
Noted!
What a great video - thanks. It was so good, I read every single comment.
I'm a newbie and I'm planning to do the Wheel Strategy in the beginning, but this looks great as well. So where do you set the strike price to buy with these numbers? And what do you use to decide if it's a bull market? Using any specific indicators or what is your thoughts on that?
Tough questions! If were just to buy Calls like in this video, I would probably choose the strikes which are slightly in-the-money that are 90 days away. Personal preference though.
As far as overall market conditions, I try not to complicate things too much. I look at an overall 1 year chart of the major indices and draw a line for highs and lows. Is the chart showing higher highs and higher lows? Or lower highs and lower lows? Or indecisive with lower highs and higher lows? I also look at the 200 day SMA. Is price above or below it? Is the SMA sloping up or down?
@@yieldcollector sounds great. But I guess I will start with the Wheel until I feel comfortable enough.
60-65DTE to start .30Delta.......less DTE's you have to be right on direction, right on timing......
Great video. It truly is eye opening. If you bought a leaps call and it was down 50%, would you close the trade or continue to hold it?
I depends on whether or not I thought it would go up again (looking at the chart) and what the overall market is doing. It also depends on how much time is left. I have definitely closed them early for a loss before if I think that it's the best thing for a bad situation. You can always roll it (for a loss) to a better strike and expiration, too. You could see if that makes sense. It's hard to give a definitive answer because it's situational (at least for me). Some people probably have strict rules about when to close trades. I don't really.
@@yieldcollector Thanks for your answer. Have a great day. Good luck trading.
Thanks Ford the video. Now for 2024
Thank you for this vid! The features used in this video, is it free or you need to subscribe?
The features used in the vid are on the paid plan.
Wow thank you.. just in time for this bull market!!
what is your criteria, generally, for determining bull or bear market?
I keep it really simple. I look if the 50SMA is above the 200SMA. It's not perfect, but that usually gives me a good idea.
Great video well explained without unnecessary jargon. Question - what strategy would you use in a Bear market ?👍👍
Thanks. I usually lose money in a Bear market the same as everyone else 😁. But if you were good at knowing when the market changed, simply buying Puts or Put debit spreads would do very well.
Got a new sub outta me. Looking forward to seeing and learning more
this is amazing thank you
Tanks very good explanation Lesson
Whats the current strategy your using today? Can you post an updated video on whats working well right now?
Sorry I haven't made many videos lately. Just haven't been in the mood for it 😔. I pretty much trade the Wheel Strategy exclusively now. Slow and steady gains are what I go for.
Do you buy long puts? If you also do a long put in future video on market chameleon that would be awesome, thank you for the insight
I don't really buy many long Puts, if I am bearish I usually will just sell a Call Credit spread.
Great video! Only one comment: You said that the options get cheaper the further out in time you go (ex: 3 months out - 7:47 in video), yet thats not the case. The more time you have for an option to expire, the pricier it gets. You can even compare the ask prices in both the 7 day and the 3 month options chains in your video and see that the asks are greater in the 3 months chain. I think it might have been a mix up. Thanks for the video!
Thanks. I believe I was referring to the fact that as you go further OTM the options get cheaper for that particular expiration cycle.
That’s great info
On a strategy like this, what kind of IVolatility do you prefer?
The sweet spot for me is like 30-50% IV.
@@yieldcollector thanks
Another great research, thank you
How does the win rate compare to the delta for any given strike and expiry date? Or at what delta does the win rate start to exceed 50 percent?
It is very stock specific. Once you get to ATM and go ITM that's when the win rate is usually best. Some stocks never make it above 50% win rate at all. It is hard to make a blanket statement about all stocks.
@@yieldcollector they must use a proprietary calculator
@@edbrandt8972 Whatever they use, it is very impressive.
Great video. Question: do you use both this and option alpha presently? Seems there’s some overlap, but I’m new to options trading. At work I’m a BI and AI guy, so the application isn’t an issue - it’s the decision on the tool set I’m interested in. Thanks!
Yeah I use both of them. There is definitely a lot of overlap, especially since OA introduced "Trade Ideas" for manually finding trades (which is a cool feature). OA is mostly for auto trading and I use MC for finding individual trades. MC really shines when finding earnings trades (which is what I use it for most). It doesn't bother me to have 2 subscriptions since I use OA with Tradier so my OA is free.
@@yieldcollector thanks very much. I have OA as of this week and I’ll subscribe to MC. As a newer options trader (lots of years in stocks), the barrier to entry is knowledge- at least for me. The investment in these tools seems almost nothing to me compared to the gains they offer. Thanks again!
Yeah as a newer options trader, MC and OA can feel overwhelming I would imagine. For OA the live beginner workshops are great app.livestorm.co/optionalpha/beginner-demo . For MC, there is a learning curve and not many places to learn it lol. That's why I try to make videos about it. @ttfweb1
I just bought some Msft 255.00 calls expiring 1/19/24. Will sell Otm calls against it.
Nice. Good luck to you.
How much did you profit
so would you say the $99 a month subscription n market chamaleon is worth it?
I mostly use it for finding earnings trades. It is worth it to me for that reason.
@@yieldcollector thanks, will give it try
Thank you
You're welcome
Not sure whether you realized it or not. The win rate is easy to see from delta. If ATM strike is 0.50 delta, then the win rate is 50%. If delta is 0.2 (OTM), then the win rate is 20% (80% chance that it would expire worthless). If it is 0.8 delta then win rate is 80% as 20% chance of expiring worthless.
The delta values are a quick way to see approximate probabilities. With Market Chameleon, the actual win rate of each strike is calculated using actual backtested results. That is entirely different from probabilities.
That's not what delta IS, though, or even supposed to be.
Look at his chart, it shows 0.8 delta winning 50% of the time and the 0.5 delta winning 39% of the time.
@@tonyrichmond9428 I understand. But in Options world, they say, if the strike is 20 delta then 80% chance that it is going to be OTM (or 20% chance that it is going to be ITM). So, indirectly, it is the odds of winning.
@@tonyrichmond9428 Thank you for that clarification Tony!
great informative video.Thanks for sharing
If you have a 41% win rate that also means you have a 59% loss rate. Not great.
But, pair a lower return with a higher win rate AND do an Iron Condor and you'll make more money safer. Just my two cents.
I liked this video. So what trade are you in right now? I hope you can share. I have been losing two 0DTE on SPX in the last 4 weeks and it wiped out almost all my buy power as I was stubborn and didn't place a stop loss.
Thanks. I'm not in any long Call trades. I'm in like 20 Wheel Strategy trades right now. Some are newer, some I have been rolling for the last 6 months.
@@yieldcollector Can I ask if you do the wheel on large/mid/small caps stocks or index?
@@rgasta7765 Mostly large cap stocks.
@@yieldcollector Curious as to why you aren't in any long calls if the backtest results were so favorable and we are in a bull market?
@@TheBookologistChannel Because I'm an idiot 😂. I've had a pretty good year with the Wheel Strategy, but I definitely would've made a lot more if I'd just bought long Calls.
Good video. Most of your etf/ stocks were good examples except Tsla has not been great this year.
Yeah TSLA has been very disappointing lately.
What about doing a video showing the same strategy but only with buying put options in a bear market…
I would like to make that because I am curious about the results as well. But this Market Chameleon option chain backtester uses the last 4 years of data to get the results. I can't really isolate it to only check during bear markets, so the overall results will look terrible because of that. Although I just checked in the list of trades in the results and the Puts performed well for 2022 for what it's worth. If you are good at market timing, buying Puts at the right time seems to be a great strategy.
What is your preferred minimum IV with these long calls?
If I am buying a long Call I would like to see the IV Percentile (or IV Rank) below 30.
Thanks.@@yieldcollector
Looks like EXPE might be a decent target for this strategy, developing a nice base around 90.00, looks like it created a higher low recently, thoughts. What does market chameleon show for EXPE?
I just looked, and the backtest for EXPE wasn't good. There is a free 7-day trial if you want to screen other stocks marketchameleon.com/Subscription/Compare?pap_aid=YieldCollector
@@yieldcollector Thanks
If your trading options, sell them YOU MUST HAVE COLLATERAL. Options include stock or leaps, or in some cases cash (cash secured puts).
I'm guessing from these findings that if you want to Short stock using long puts, at the money or in the money is the way to go
Yeah that would be my guess as well.
for your back test, the results are holding the option to expiration?
I believe so, but Market Chameleon doesn't specify that.
gonna try this soon
So couple months out slight OTM calls seems like the best move
Great informative video!
How do you calculate when the trade ends? I mean when is this backtest selling the call?
Please don't tell me it's at the maximum profit.
As far as I'm aware, the backtest results are assuming you hold the option to expiration.
If you're EXTREMELY bullish on something, you could finance your long calls by selling puts. This is best if you're extremely bullish AND you're okay with owning the underlying stock (in case it goes against you and your puts get assigned).
Thanks, great info
So what happens if I buy a call
Expiration date, one month then I sell next week what happens
It depends if the underlying goes up or down in that time. If it goes up you will most likely be able to sell it for a profit, and if the underlying goes down you would sell it for a loss. It all depends on how much the underlying moves.
Thank you as you can probably tell I am learning look forward too your other videos
Great video
Awesome video
Thank you 🙏🏼
Excellent!
When you buy call that expires in 6 months, when do you close the position?
The backtest results from the video are showing what happens when you hold the Calls to expiration. That seems like the best way to capitalize on the huge gains. I haven't actually done much straight up Call buying. I usually only buy Calls when trading spreads. Making this video changed my mind though. I will be doing a lot of Call trades from now on. I will hold them as long as possible to try for some "Home Run" results. Easier said than done, though.
As part of a spread trade, I usually close them out early when they are near full profit potential.
@@yieldcollector I never buy 6 months expiration or leap options as well. So, not sure in this market situation, the longer you hold is a good idea due to the uncertainty and time decay. Maybe, close out the position when gaining 50% (just my thought).
Yeah maybe. Hard to argue against taking a 50% profit!
Please explain a $3 call on Palantir for 1/26 ?
Yeah that seems too expensive. I'd rather just buy the shares.
This is the best...
Why would you buy an otm call for a pmcc instead of itm?
I buy itm Calls for a PMCC. Maybe I misspoke. I don't remember the context.
I just recently made over $5,000 on a few TSM long calls in just 24hrs, for me LC are my most profitable trades , bull market helps of course
Nice!
Make us a new Video I want you👏 to show more of the app your using your gonna say its worth it, but will u show since u don't work for them ???🤞🤞🤞🙏🙏🙏
1:21 - 2:04
Are you going to create a bot for this strategy?
Most likely.
This video is a year old any update on progress on the call options ?
I haven't really traded them. Although in hindsight I wish I would have, because I imagine that the strategy would have performed really well over the last year.
@yieldcollector would've crushed! I prefer spreads - bull calls and puts recently
it is easy when assumed trajectory of the market is in one direction, the market is in a bull run but it only takes one world conflict to shake things up so no buying options is not a smart strategy IMO because this is not reflective of how options work when prices of stocks are not going up like they have been lately as one week long call will melt away in time decay faster than an ice cube on a hot pan in value
this video 11 months ago, you wished you bought long calls 😂, im just learning options now, i was trading cash and margin only, and already see the benefits of options and looked for techniques and found your vid
What impact does dividends have on leaps?
Not much as far as I can tell.
Great video and ideas.
Thanks
Did you give up on youtube?
Thanks. I'm just taking a break from TH-cam for a while. I'll be back to make some more videos at some point.
I wished I had watch this 9months ago
Definitely got distracted by the dog in the first minute!
The star of the show.
Ben: have you an OA bot for buying calls? Possible?
Yeah it's possible. That was actually next up on my bot creation list.
@@yieldcollector Perfect. Thx.
@@yieldcollector You got me into the OA world. Thanks for that. I will look for this bot
its not as easy as your explaining it those are just very optimistic valuations . your win rate is high only because of theta as u get closer to your DTE you see how those change . it also comes down to how you manage your position as you get closer to your expiry date .
I just bought a McDonald’s Put 3 Months out because it’s run up lol. Got a few Long Calls in Sqqq.
But the margin is very high
In bear market buy long puts.... 😂😂
Friend. So I guess risk reward comes into play. Yes you get a good return but with calls you have the chance of losing everything
Yes definitely. That's why I always keep my long Call trades pretty small.
@@yieldcollector I come from the forex world and we usually collect, 2:1, 3:1 risk reward for trades but for some reason with options it’s less than or equal to 1:1? Which i don’t quite understand.
@@SimplyScalping You can understand the leverage when you look at the delta of your strike. The delta shows how much an option price would change for every $1 move in the underlying. So lets say you buy the 100 strike NVDA option that expires Oct 18th (89dte) for $24.30. That would cost you $2,430 for 1 contract which represents 100 shares. It has a delta of .80 which means that the option price will increase $.80 for every $1 move upwards. This gives you much greater leverage than buying the 100 NVDA shares outright (which would cost $11,800) .
Always, ALWAYS, buy calls "In the money". Always. Don't bet out of the money because you'll lose money in the process.
I can’t disagree more on long strategies. The only problems with “back testing”, is it works till it doesn’t. It’s curve fitted. Selling premium is the only way to be consistent in my opinion. I’ve done both fir a very long time and selling has yielded the best returns. The only long positions I have are if I’m assigned stock from a short put. I’d compare my portfolios with any long trader. I use to use a system called vector vest and back tested till I was a trillionaire. It works on computers but not in the real world.
I also prefer the slow and steady profits of selling options. But to each their own.
Any trader saying this is the only way is a trader no one needs to be listening to.
I have yet to meet a trader with my gains: Penny stock, low-range break, equal dollar value each company, well over 100 companies per set-up, losses cut at about 25%, first 100% gain of each stock sell half the position, unless it supernovas, then sell all on the spike's first 1-day chart head-and-shoulders top. Holding time is 1 day to 1 1/2 years. Average holding time 1-6 months. Gains/losses/fees & commissions all factored in leaves a massive profit. Tax liability is low also due the the low portfolio turnover, unlike "successful" day trader with 270 setups a year.
I will put my market gains up against anyone else's.
Worked wonderfully for me
@@wallstreettrader1challenge accepted I used the strategy described here
I blew up my first account buying out of the money, lol basically a lottery ticket.
Yeah I pretty much did the same thing when I first started.
@@yieldcollector do you have any videos for small accounts or people starting out? I'm about a year into my options journey. So far been selling puts and covered calls.
If you have a smaller account, I would recommend doing Poor Man's Covered Calls instead. I made a video about how to trade this strategy th-cam.com/video/ZpWGmz39pFQ/w-d-xo.html . I also made a video on how to choose stocks for the PMCC trade th-cam.com/video/-oqqI05E67s/w-d-xo.html .
@@yieldcollector what brokerage lets you do the pmcc I've tried on vanguard but it won't let me do it on there lol
I am not sure if Vanguard allows PMCC trades or not. I have accounts at TD Ameritrade and Schwab and they both allow you to do it. TD is merging with Schwab soon, so I recommend Schwab. Also, you need to be approved for trading spreads (whichever broker you choose).
If this truly averages 6% per week why is everybody and their mother not doing this strategy?
Not sure. Maybe most people think they're better off buying far OTM cheaper Calls instead. Also, past performance is no guarantee of future results 😁.
buying naked calls at all isnt a good long term strategy
"Naked" means selling but ok...
the fact you didn't know you were in a bull market at recording the video is why the whole approach is BS. Main take aways: buying is good when in bull, but we can't know when we're in bull. Gotcha!
wont work, have to be a preimium subcriber. sucks