Master Weekly Options Processes and Tricks

2015

Real Trades – Real Accounts Since 1994

Marc Nicolas

Founder & Head Trader

20 Year Trading Veteran

* How to Stack Weekly & Longer Term Options for Consistency…

AND How to Properly Defend Bad Positions!

* Support & Resistance For High Probability Plays!

* Cost Reduction Trading Strategies For Low Implied Volatility!

* Learn To Spot The Perfect Setup Including What Day, What

Option Strikes & What Deltas MUST Be Used In Order To

Win… And Give You The Highest Probabilities!

* Learn The Keys To Dividing The Weeks Cycle… And How to

Use Proper Strategies For Particular Days Of The Week!

* Little Known Secrets For Finding Cheap Options On Fridays…

With The Potential For Doubling & Tripling You Invested Capital…

While Having Extremely Limited Risk On The Downside!

* And So Much More… Its Too Much To List Here!

During This Class You Will Learn...

Do You Want to Be A Jack of All Trades, and MASTER OF NONE?

Do you really need to master all these Options Strategies?

NO! Master The Few That Make You Money!

1-2-3 Punch

High Probability Positive Theta Play

Consistent PROFITS With Your Trading…

Do It With Minimum # Of Trades A Year

With Less Time In Front Of A Computer!

Understand Income Trades Vs Wealth

Trades & Their Allocations

In Terms of Risk & Sizes

THE MASTERCLASS OBJECTIVE !!

• Understanding Put / Call Behaviours

• Master SPY Weekly Options Directional Trades

• Debit Spread Mastery /Diagonals for Quick Decay

• 123 Punch

• Credit Spread Mastery

• Iron Condor Mastery

• Defending Any Of These Strategies

THE BASICS INDIVIDUALLY

• Master & Understand Volatility

• Timing Directional Plays Vs Spreads

• Timing Monthly Vs Weekly Options

• Timing Credit Vs Debit Spreads

• Keeping Active With The Right Money Management

COMBINING AND DEVELOPING

1. Open Interest: 1,000’s minumum

2. Daily Volume: 100’s contract minimum

3. Tight Spreads / High Liquidity: Underlying needs millions of shares, eg SPY

4. ROC = Max Profit (credit)/Total Margin Capital Requirement to make the trade

5. DELTA is the most important Greek…

1. It shows the amount by which the price of an option changes for every

dollar move in the underlying.

2. It is a close equivalent to the probability to be in the money by expiration.

3. It shows the equivalent relationship of ownership of stock to options

4. It helps manage portfolios with a mix of positive and negative deltas (CALL

Deltas are +VE from 0 to +1 ; PUT Deltas are -VE from 0 to -1)

OPTIONS CHECK LIST – Key Metrics To Check

6. Volatility: Understand Implied Volatility vs Historical Volatility

7. Probability of being Tested is almost a certainty in most case below 2

standard deviations of 95% of probability or less (probability of touching

1.8*DELTA)

8. Implied volatility: what the market place is “implying” the volatility of the stock

will be in the future, based on price changes in an option.

1. This figure is expressed on an annualized basis (like historical volatility).

2. Implied volatility is more interesting to retail option traders because it's

forward-looking (which historical is not).

OPTIONS CHECK LIST – Key Metrics To Check

BELL CURVE EXAMPLE

Theoretically there’s a 68% probability that a stock trading at $100 with an implied

volatility of 20% will cost between $80 and $120 a year later. Also there is a 16%

chance it will be over $120 and a 16% chance it will be below $80. Remember, this

is theoretical, as implied volatility is not an exact science.

OPTIONS CHECK LIST – Key Metrics To Check

8. Implied Volatility Contd:

1. HIGH VOL: With DayTradingZones Tools or Daily Analysis Buy/Sell Zones

Extremes SELL VOLATILITY WITH VERTICAL SPREADS/NAKED

PUT/IRON CONDORS/STRANGLES (40-150% IV Percentile)

2. LOW VOL: Debit Spreads /Diagonals (0-20 and 20-40 IV Percentile

diagonals)

1. Risk 1 to make 1 on short term debit spreads

2. Risk1 to make 3 or more on long term leaps

OR

1. Sell premium 2 Deviations out for a 90/95% chance of Success

OPTIONS CHECK LIST – Key Metrics To Check

The reward is big so is the risk . These are perfect with SPY options to

substitute futures.

DAYS AND SIZE TO TAKE THEM: 1 or 2 trades per day on THURSDAY and

FRIDAY. ONLY small size and only 1 trade FRIDAY

All with with stop losses. No more than 10% of your total option capital

available shoud be allocated to weeklies.

10 spy options weekly contracts = 1ES

15 USO options contract weekly = 1 CL

1AAPL contract = 1 NQ

Use TBT or TLT FOR ZB

USE FXE FOR 6E (Euro futures)

WEEKLY OPTIONS

• NAKED PUTS: 2 deviation out at least 85-95% probability of success

• CREDIT SPREADS: 66% probability of success or higher - 1/3 of the strike

width for the premium minimum for monthly spreads. For Weeklies shoot for

65cents to 1.2$ with high probability.

• IRON CONDORS: same as credit spreads roll leg when delta are

unbalanced to collect more also start directionally.

OPTION STRATEGIES

• + STANDARD DEVIATION

• 1sd ATM call + ATM put * 1.25

• 2sd AM call + ATM put * 2.5

• 60 MINUTE CHART

• LIVE EXAMPLES

ZONES BUY CAUTION SELL + TRADE SET UPS +

CLUSTERS + STANDARD DEVIATIONS

The Moving Average Convergence-Divergence (MACD) indicator is one of the

simplest and most effective momentum indicators available.

The MACD turns two trend-following indicators, moving averages, into a

momentum oscillator by subtracting the longer moving average from the

shorter moving average. Result, the best of both worlds: trend following and

momentum.

The MACD fluctuates above and below the zero line as the moving averages

converge, cross and diverge.

POWER OF THE MACD

Note: All 4 Set-Ups

are valid for Short or

Long Trades

4 TRADE SET-UPS

All Your Capital In One Idea

Or Trading Style!

100K Example

Power Of Diversification

+ STACKING Weekly & Monthly