29th December 2016 - Consecutive Winning Trades 52

We will take profits on our current open position tonight and lock in US$27.50 per contract.

This will mark the last closed trade for 2016 and bring our current run of winning trades to 52.

We have been lucky this week and seen a slight tick up in volatility. It is still very low and so we are still very cautious in our approach to strike selection.

We will open a trade today that will expire on January 6th 2017 and mark the start of a new year of trading.

New Trade Details

Market 2246
Expiry January 6th
Sold Put Strike 2160
Bought Put Strike 2030
Pts below 86
% below 3.8%

22th December 2016 - Consecutive Winning Trades 51

The US market has just closed and saw some selling right at the end which delayed us from locking in our profits this morning. However, as another few hours of time erode today and premiums decrease, we will lock them in tonight for US$32.50 per contract.

Next week the US will be closed on Monday for Christmas holiday, but unlike us who take 2 days, they will be back at it again on Tuesday.

The shortened week means less days in the trade, hence less risk. The offset is lower premium, but as there is a direct linear relationship between risk and reward with options it all balances out.

New Trade Details
Market 2261
Expiry December 30th
Sold Put Strike 2190
Bought Put Strike 2060
Pts below 71
% below 3.1%

15th December 2016 - Consecutive Winning Trades 50

Right now we have not yet closed our current open position. Our strike is all the way down at 2155 and the market is trading at 2252 so we have a massive 97 point buffer with only one trading session to go.

The result with such a massive gap is almost inevitable. At some point tonight we will be closing out for a profit of US$35 per contract.

We would like to be in a position to immediately re-enter the market, hence the email today, even though we are not quite out yet.

The Fed last night increased interest rates as expected. They are now at 0.50%-0.75% (the US quote a tight range rather than an exact figure). The last time they did this was exactly 12 months ago in December 2015.

In her statement, Yellen described a growing economy, low unemployment and positive consumer sentiment. The Fed thinks inflation will head towards their 2% target over the next two years and a neutral monetary position would be around 1.4%. They think they are likely to increase rates 3 times in 2017. But then she stressed they are not on a plan and will adjust to economic conditions as they prevail.

The stock market did not like this and sold down 18 points, which is exactly what we wanted. With any luck this selling will continue tonight and we can get a great trade away in the lead up to Christmas. Presently the new trade would look better than last week and we would like to get some new put spreads sold while traders are still emotional and before they calm down and reassess.

New Trade Details
Market 2252
Expiry December 23rd
Sold Put Strike 2140
Bought Put Strike 2010
Pts below 112
% below 4.9%

9th December 2016 - Consecutive Winning Trades 49

The US stock market has shown good strength this week and made a big move higher today. This has taken all the value out of our current puts and we are presently sitting here and hitting the offers when the market makers put them up for us.

By the time you read this, we will be out of our position in the December 9th puts for a profit of US27.50 per contract.

Next week is a special week that only occurs 4 times a year.

Presently we are trading the underlying December futures contract. That expires next Friday, the 16th, when the US market closes.

Because the underlying is expiring on the same day as the options, option expiry is moved to the Friday morning. This effectively means one less trading session for our puts.

Less trading sessions means less premium but also less risk.

We want to get into our new position in the December 16th expiry puts tonight because of this.

The new trade will look something like this:

New Trade Details
Market 2237
Expiry December 16th
Sold Put Strike 2145
Bought Put Strike 2015
Pts below 92
% below 4.1%

2nd December 2016 - Consecutive Winning Trades 48

We are not quite out of our current sold puts yet, but we will be by tonight.

The market has fallen in the last couple of sessions which has held value in our puts a little longer than usual.

It would actually be good if we had a massive crash tonight, but I very much doubt we will get that lucky.

When it closes later today we will lock in US$25.00 per contract. The low volatility recently is lowering our profits. But the good news is there is a bit more vol around this coming week so we should get a better trade on tonight. More selling would help.

New Trade Details
Market 2193
Expiry December 9th
Sold Put Strike 2070
Bought Put Strike 1940
Pts below 123
% below 5.6%

25th November 2016 - Consecutive Winning Trades 47

This very shortened week has seen markets push to new all time highs. Who would have thought Donald would win the presidency and markets would react by hitting new highs?

This is why it is pointless trying to predict markets and why we love to keep things simple and just sell put options spreads instead.

The market was closed last night for Thanksgiving and will re-open at 10am Sydney time this morning. When that happens we will lock in our 47th consecutive winning trade. A little less than normal at US$25 per contract. Option premiums adjust to the shorter week. It’s a concept of “profit per day” – with less days comes less profit. But it all goes into the pot and we are on track to a 20% year. Touch wood.

We are probably going to have a long night of trading ahead of us. The markets will close at 1pm New York time so it is only a half day and very few people will be trading as they are recovering from turkey overload. That will mean thinner markets and a lot of effort to place our orders. Still, the good thing is we will be able to sleep at 5am due to the early close.

New Trade Details

Market 2206
Expiry December 2nd
Sold Put Strike 2125
Bought Put Strike 1995
Pts below 81
% below 3.7%

18th November 2016 - Consecutive Winning Trades 46

After the excitement of the last two weeks, everything has died down and we are back to boring.

At this moment, we are trying to close our open trade. That might not happen until later today when Europe comes in, but it will occur and we will be locking in US$37.50 per contract.

Next Thursday is Thanksgiving and the market is closed. The day after, Friday, expiry day, the market is open for only half the day. Usually absolutely nothing happens as businesses run on skeleton staff so everyone can have a four day Thanksgiving weekend.

What that means is we really only have 3 sessions next week.

With options volatility drying up once more and a shortened week, we want to get out of our present trade and into our next one today, before it is too late.

New Trade Details

Market 2172
Expiry November 25th
Sold Put Strike 2100
Bought Put Strike 1970
Pts below 72
% below 3.3%

11th November 2016 - Consecutive Winning Trades 45

Profits taken of US$42.50 per contract.
What a week this has been! In what was very possibly the most divisive and ugly election in US history, Donald has pulled off the most unlikely of wins.
In short, things could not have gone better for us.
You might have seen headlines yesterday about markets ‘plunging’, ‘taking’ and other sensational sounding and worrying phrases.
What happened was the markets expected a Clinton victory and initially rallied but then when Trump took over the lead it led to a round of knee jerk selling. When it was at the height of uncertainty the S&P500 fell just over 100 points, triggering the circuit breakers and trading ceased.
(these circuit breakers kick in at a 5% fall and are one of the protection factors for our strategy. The best bit is we don’t have to do anything for it, the exchange does it for us)
When trading re-opened it was apparent Donald had won and although this does worry markets (more on that below) it isn’t anywhere as near as bad as an unknown outcome.
At no point during any of this did we even have the slightest concern. We are sitting on the 1870 strike so even at its worst, we were still 158 points away from any trouble.
When the markets opened last night all that selling was bought back and the S&P actually finished up 27 points!
But this one week of market action isn’t the best bit. The best bit is what a Trump presidency means for markets and that is, no-one knows. Which should lead to a lot of uncertainty in coming months and we thrive in these conditions.
I heard a Fast Money trader speak yesterday afternoon. I respect Guy Adami very much and he said that markets have lived on Fed Policy for years. That has led to our extreme low levels of volatility as everyone knows the Fed will act if things get bad. However, Trump’s statements pre-election sound as if his presidency will not like the Fed dabbling in markets. Guy is worried that a Trump presidency deny the Fed their market calming actions.
I sincerely hope he is correct.
It would be wonderful if we saw a state of turmoil and a nice increase in volatility. That is perfect for our weekly income strategy.
Hillary was going to give us more of the same. That will probably not happen with Donald. Hopefully Donald will shake things up and upset a lot of people. Markets won’t like it and volatility will increase.
So, no matter what you might think about Donald, for us making money with our Weekly Income Strategy, the future is looking very bright indeed.
Thank you America for voting in Donald and sending us your money every single week. We will happily continue to take it from you as often as we can.

New Trade Details:
Market 2160
Expiry November 18th
Sold Put Strike 2010
Bought Put Strike 1880
Pts below 150
% below 6.9%

4th November 2016 - Consecutive Winning Trades 44

We are not out of position yet but we should be out sometime today locking in a profit of $37.50 USD per contract.
It’s been a really interesting week this week with the S&P500 falling every day. It’s been the longest losing streak since 2008.
Even though the markets have closed lower every day, the moves have been slow and gradual and we are still more than 60 points away from our strike price with only one session to go.
Hillary still looks to be winning the US election race, however Trump has managed to inch closer and make the race a bit tighter. It’s certainly not as one sided as it looked last week.
The changes in the election and market movement down have caused an increase in options volatility, which as you know, we love.
The increase in vol will push us a long, long way away this week.

New Trade Details:
Market 2085
Expiry November 11th
Sold Put Strike 1890
Bought Put Strike 1760
Pts below 195
% below 9.4%

28th October 2016 - Consecutive Winning Trades 43

This past week has been the slowest I can remember this year. The market has hardly moved at all, but that hasn’t stopped us banking yet another profit. This time for $35.00 USD
On Monday the market put in a small rally which was then subsequently eroded over the next 3 days. When I wrote this email last week the market was at 2136. Today it is at 2128.
The entire trading range for the week was only 2122-2148 which is only a 1% move from absolute top to bottom.
About the only thing on the horizon that can give us any joy will be the election the following week. Even that is looking like it will be a non-event too.
We’ll just keep plugging away and make what the market gives us. We won’t change our strategy. We’ll keep safety of capital as priority and accept however much profit the market wants to part with.
New Trade Details:
Market 2128
Expiry November 4th
Sold Put Strike 2040
Bought Put Strike 1905
Pts below 88
% below 4.1%

21th October 2016 - Consecutive Winning Trades 42

We are not completely out of our position yet but with any luck the remaining contracts will be closed later today locking in a profit of $37.50 USD per contract.
Back to boring…The market is in exactly the same position as last week and it appears we’re in for much of the same again next week. In terms of economic data next week there is very little to watch out for.
The US markets appear to be in a holding pattern as investors wait to see what the Fed will do and how much Hilary will win by. Its widely expected that the Fed wants more time and they don’t want to be seen as interfering with the election so rates will remain on hold until potentially December.
As an investor in this strategy I would say a rate rise would lead to a positive outcome for us as the USD should strengthen and it should also create some volatility. But if they don’t raise we could see the AUD heading towards the $0.80 level for the first time in 18 months.
All that aside, lets look at this weeks’ trade.
New Trade Details:
Market 2135
Expiry October 28
Sold Put Strike 2060
Bought Put Strike 1930
Pts below 75
% below 3.51%

14th October 2016 - Consecutive Winning Trades 41

We are presently working our way through the take profit orders on the October 14th expiry puts which will result in a profit of US$37.50 per contract.
We’ve had a good week in the markets with some selling coming through so volatility is on the rise and that leads to a better trade opportunity this week.
New Trade Details:
Market 2126
Expiry October 21
Sold Put Strike 2025
Bought Put Strike 1895
Pts below 101
% below 5.0%

7th October 2016- Consecutive Winning Trades 40

Profits taken this morning of US$35.00 per contract
We have a relatively quiet week ahead.September jobs numbers will be released tonight and are expected to remain strong, supporting a rate hike later this year. For a long time now good news has been good and bad news has been bad. Strong data earlier in the week has finally been good for the market which is a healthy sign that investors just might be warming up to the idea of a rising interest rate environment.
Sunday night we have the second Presidential debate followed by a bank holiday on Monday in observance of Columbus Day. Next week also marks the start of earnings season with Alcoa kicking off on Tuesday.
The nice thing is, all of the uncertainty surrounding these events is already priced in to weekly options, and we can take advantage of that.
So let’s turn our attention to tonight’s trade

New Trade Details:
Market 2155
Expiry October 14
Sold Put Strike 2070
Bought Put Strike 1840
Pts below 85% below 4.0%

30th Sept 2016 – Consecutive Winning Trades 39

We are not quite out of last week’s trade just yet with the market closing 14 points lower last night. We still have a good 50 points up our sleeve though so it’s only a matter of time before we’ll be out, locking in profits of US$30 per contract.

We are set up nicely now for entry into the new trade tonight, and hopefully we’ll see even more selling prior to getting our trade in. Selling before we place a new trade usually means higher profits and less risk because we can get a lot further away.

Here’s the trade we are targeting tonight.

New Trade Details:

Market 2143
Expiry October 7
Sold Put Strike 2030
Bought Put Strike 1900
Pts below 113
% below 5.3%