Why sell options 150620

Alan ParryAlan Parry

PRESENTED BY

WHY SELL OPTIONS?WHY SELL OPTIONS?

Options are based on the commodity markets in the USA, and all examples are from the Matrix Plus software

A little bit about meA little bit about me

My trading experience started in1996.I say trading experience because initially it was a very bad experience; one I’ll neverforget.Fortunately I learned a lot from this bad experience and turned it around to where I am today.

I was able to turn it around because early on I realised some important points.1.Probably the most important; the markets are manipulated and controlled by the “BIG GUYS”, (mostly large corporations, banks and financial institutions).2.Because of the manipulation the daily prices of commodities are unpredictable.3.The probability of winning on any trade is statistically less than 50%.

So how was I able to find a way of trading that is consistently profitable?

SELL OPTIONS

I need to explain why selling options is in my opinion the only way to trade to make consistent returns on your money.1.I can start out sometimes with a better than 90% probability of winning on my trades.2.The “BIG GUYS” I mentioned, mostly just sell options, and make a killing. Why? Because they know that selling options is where the money is.

3. Selling options is considered a very risky strategy, but I have a way of limiting the risk when I sell options.4. With the right information and software, selling options becomes a simple means of collecting cash into your account.5. Having sold options since 1998 I have proved over and over that the returns are consistent, and the following slides will give you proof of this.

First I want to show you some statistics of the contracts that I trade.

There were 41 commodities, ranging from wheat to gold to pork bellies etc.More than 2.5 million options’ contracts where traded on the 26th June 2015, to a value of over 1.3 BILLION dollars. That is the amount of money that the buyers of options paid to the sellers of options.On this particular Friday 78% of the options expiring, expired worthless.

From the statistics on this one day, one can see that there is a huge amount of money changing hands between buyers and sellers of options.The majority of the sellers are “MR BIG”.So the moral of the story is, follow what Mr Big does and scrape some of that premium into your own account.

To prove that I know what I’m talking about, here are the statistics of my trade recommendations since the beginning of 2015.

If you would like to see the full details of each recommendation you can email me at alanparry3@gmail.com.

99 Trades recommended93 Winners = $15,094.00 6 Losers = -$962.50 Profit = $14,131.50

So the question is, “Why doesn’t everyone sell options, and who are the ones buying the options”.If you think about it, if “Mr Big” wants to sell options he needs buyers. So, there is a wealth of information on how to buy options and the various strategies that one can use. Also how safe they are and you can’t lose more that the premium you paid, blah, blah, blah…Selling options is mostly glossed over as very risky and to be avoided at all costs.

You have to realise:This is not a level playing field!

The Mr Big’s of this world want it all their own way. We can’t change this, but knowing what is going on gives us more power to be able to try and decipher what they are doing and when they are doing it.I have developed a way of tracking what they are doing, and when, which I will try to explain as simply as possible.

This is a chart of the RISK to the seller’s of options based in the Canadian Dollar futures.

What is important here is the black parabolic line. This represents the amount of money the sellers of options will lose depending on where the underlying futures price is on option’s expiry day.Too far to the right or left and they could lose hundreds of millions of dollars. If they could keep the price as close to 81 cents they would lose a minimum of $16 million. This is small change compared to the 100’s of millions they originally took in as premiums when they sold the options.

So, with 32 days to options expiry we can get a good idea from the chart where the minimum risk to the sellers is, and this gives us a good idea of where the “Big Guys” will likely hold the market on option expiry day.

Surprise, surprise! Where was the futures price for the Canadian Dollar when the options expired?

80.35

80.35?This means every call option from 80.5 upwards expired worthless (88%).Every put option from 80 and down expired worthless (55%).The losses to the sellers were approximately $25 million, chicken feed compared to the premiums they collected.

Trading is not an exact science!The above example is typical of how the markets are controlled for the benefit of “Mr Big”, but one has to monitor the markets regularly to detect any changes in their strategies.What I have talked about so far is but the tip of the iceberg, and there are other factors that one needs to take into account, such as seasonal tendencies, volatility of markets, daily volume etc.

The “Matrix Plus” options package was developed by me to cover every aspect of options trading, and includes software and manuals mainly geared towards selling options. We also run one-on-one courses in Cape Town and Johannesburg (2 days). There is a lot more to learn about selling options, and if you would like to learn how to trade successfully please contact me.alanparry3@gmail.com