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Box Spread – Your Secret Weapon for Risk-Free Options Trading
In this blog post, I will explain everything you need to know about box spreads, which are often considered the closest thing to risk-free options trades. You will learn what a box trade is, why it’s useful, how to construct one, and how to use it for various financial purposes such as generating income, replicating…
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Never Trade Iron Condors Blindly: Here’s How to Actually Profit with This Strategy
Most people’s portfolios don’t have anything that can profit unless the market is going up. Traditional investments, like stocks, need upward movement to generate returns, leaving you with limited opportunities when the market is flat. The Iron Condor options trading strategy offers a compelling alternative by profiting from a lack of significant price movement in…
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Is VXX Going To Zero? A Guide to Trading Volatility Products
The VIX, formerly the Chicago Board Options Exchange (CBOE) Volatility Index, often referred to as the “fear gauge,” serves as a valuable tool for options sellers like us. It captures market sentiment by rising with increased uncertainty and concern, as reflected by the weighted average of out-of-the-money call and put options on the S&P 500.…
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Jade Lizard – A Strategy for a Sold-Off Market with No Upside Risk
Traditionally, neutral strategies such as the strangle or iron condor carry inherent risks on both sides of the market. A substantial move in either direction can be challenging. However, there is a groundbreaking options strategy maintaining a neutral bias while completely eliminating upside risk. It is the Jade Lizard, which allows traders to collect rich…
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The 1-1-2 Bear Trap Strategy: Trading with a 95% Probability of Profit
Today, we’re diving into one of my all-time favorite options trading strategy – the 1-1-2, also called the “112 put ratio” or the “bear trap“. I’ll break down why it’s the greatest trade ever told, its simplicity, flexibility, and how you can use it in various market conditions. The 1-1-2 trade is a straightforward, mechanical…
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Naked Put Nightmare? No Problem! Here’s How to Fix It.
Ever had a put option trade go seriously south, like way deep in the money? It happens, even to the best of us. Picture this: you’ve tried some smart moves, rolled that put option down and in time, but the trade’s still stuck. Feeling the panic vibes? It’s a common struggle among traders. You could…
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ZEBRA – the Best Options Trading Strategy for a New Bull Market?
The ZEBRA (zero extrinsic value back ratio spread) allows you to get close to the same directional exposure as owning 100 shares of stock, but with much less risk. It’s my favorite stock replacement strategy. In contrast to other stock replacement strategies such as synthetic long stock, risk reversal, or LEAPs, the ZEBRA provides substantial…
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How to Defend an Irrational Move? Six Expert Tips from Tom Sosnoff
Today, I’m going to tackle a question that many traders and investors face at some point: “Oh no, how do I defend against irrational moves? What should I do?” If you’re here hoping for a magical solution to salvage your account after a downturn, I must disappoint you. The truth is, there are no quick…
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The Wheel (Triple Income): The Best Options Trading Strategy for Beginners
Options trading can be a complex and risky endeavor, especially for beginners. Finally, there is a strategy that stands out as the best choice for newcomers: the wheel strategy, also known as the triple income. This is not a get-rich-quick scheme. This is a proven and conservative method of investing with options used by professional…
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Why Trading Options is Not a Zero Sum Game
Have you ever heard the phrase “options trading is a zero-sum game“? It’s a common belief that if someone wins, someone else must lose. But what if I told you that this perception doesn’t capture the full reality of options trading? In this blog post, I’m going to take a captivating journey into the world…