The Option Alpha Podcast

Show notes: http://optionalpha.com/show75

I've been trading publicly on Option Alpha for more than eight years now, and I'm still baffled by the number of investors who get absolutely shocked when option trading portfolio drawdowns occur. I'm talking ALL CAPS emails, mind blown, ripping their hair out shocked that a trading system wasn't a 100% probability of success. And while losing money is by no means "fun" or "exciting," it is, however, part of high probability trading systems.

In fact, you are guaranteed at some point to have a drawdown or streak of losing trades. It shouldn't come as a surprise, and it's why we are so big on balancing portfolios and trading small positions to minimize the impact on your account. Even though we know we'll have portfolio drawdowns from time to time, we also know that we'll end up generating above average returns if we stick with it long enough.

The concept of trading in a positive expected outcome system and being persistent through drawdowns isn't based on my opinion or assumptions; it's backed by math and the 44,801 backtested option strategies I'm going to cover in today's show.

Many of you know that over the last year we've been building and developing options backtesting and optimizing software that is going to be a complete game changer for traders just like you. In this show, you'll finally start to see just a small glimpse of the power behind backtesting and modeling hundreds of thousands of option strategies. It was by far one of the most anticipated shows for me to record and I hope you find incredible value in listening.

Show notes: http://optionalpha.com/show56

With more than 32k option traders in our program now, I can tell you honestly that I've seen just as many 7-figure IRA accounts as I have 7-figure margin accounts in the last eight years. Many new traders think that trading options in an IRA account limit your ability to make money and generate income. They hear stories about all the "restrictions" brokers place on new accounts that prevent you from making high probability trades and quit before actually learning how to work within the system.

But does trading in an IRA account vs. a traditional margin make or break successful traders? Given all of the favorable tax advantages that an IRA account has, it'd be rash to write them off as you start or continue your career trading options. Yet, that's what most traders do. They blindly assume that margin accounts offer the best opportunity to make money. And although brokers restrict certain activities by law, the reality is that using your IRA account for options trading can be incredibly beneficial.

In today's show, I'll roll through my Top 7 Tips for IRA traders to help you leverage your IRA to trade options. Plus, I'll present examples of how you can convert the undefined, or naked, options strategies that we often trade as part of our PRO and ELITE membership levels into their "IRA Approved" counterparts. Enjoy!

Show Notes: http://optionalpha.com/show50

One of the foundational elements of my personal trading style with options is the belief that the stock market is random. Random meaning that we can't gain an edge picking a direction. And for years, this assumption has been more or less accepted by the public and academia.

In the last couple months, the theory or hypothesis around random financial markets has repeatedly been challenged, which is a good thing. A countless number of people have tackled the issue and published their findings on random market behavior. I wish I could link them all up here, but it's just not possible nor realistic. Therefore, my goal on today's show is simply to present what I believe to be the best research on the topic of market efficiency and predictability.

Admittedly, I scheduled this show as a follow-up to Show 49 where we backtested 15 different option buying strategies during the last market crash. And the reason is that I wanted you to recognize how much "perfect timing" had an impact on the results of that case study. In Show 49, we only backtested the put buying strategies for two years assuming you were 100% right in calling the impending market crash.

If you expanded the timeline out to 3 years on either end - i.e. you're not a market wizard and can't time the crash precisely, then each and every scenario lost money. In fact, each backtested put buying strategy only made money during Sep & Oct of 2008 at the height of the collapse. During all of 2007, you would have lost on average 56% of your capital waiting for the crash to happen.

Be honest with me now; how likely is it that you would have actually held through a 56% drop in your account balance before you called it quits? And that was assuming you had near perfect market timing! Still, the traders who sold options didn't try to time the market, eventually won. Sure, they may have experienced a draw down in 2008 if there were not positioned correctly, but even still they would have made money trading through the crash.

As you listen to the show, I want to challenge you to ask yourself the following pressing questions about investing; Is the stock market random? If it is, why should we care so much about picking a random direction? If it isn't, and indicators are present to predict future moves, can I even uncover the non-random patterns? How much time or money would it take to profit under the assumption of randomness vs. non-randomness? What trading strategies fit my personal style the best?

This week during the FinCon expo in Charlotte I had the opportunity to sit down with "The Options Playbook" author Brian Overby.

Brian is also the Senior Options Strategies from TradeKing and this 40+ min LIVE interview covers so much it's hard to summarize it here.

Plus, as a very special gift Brian signed 2 copies of his hard copy book for you all. All you have to do is 1) share this podcast on Twitter or Facebook and 2) add your comment below with the #1 thing you took away from the show (the "ah-ha" moment you had).

If you're ready for strategy questions, account tips and a real live trade example with SPX options then let's get started. . .

Show notes: http://optionalpha.com/show57

We already know that you want to learn how to trade options and generate a consistent income. What we didn’t know, as well as we do now, is that we had some pretty specific gaps in our previous courses that made the process of learning how to trade confusing. And because we always want to improve and perfect our training here at Option Alpha, a couple of months ago we surveyed thousands of members in search of the "missing links" to our program.

After more than 1,378 detailed survey responses and 68 one-on-one phone calls with PRO & ELITE members, we decided to completely overhaul our training courses from start to finish. I'm not talking about adding another video here or there; I'm talking about creating an entirely new training program with a defined path and specific, measurable goals. Plus, it had to be 100% free and 10,000% times better than anyone else's paid program.

Not to pat ourselves on the back or anything, but we nailed it! People love this new training series. I mean all-caps, smiley face emoji, freaking LOVE IT!

Today I'd like to introduce you officially to the NEW Education Tracks at Option Alpha. Don't let the names fool you though because these tracks were meticulously curated to help you hit certain objectives in your options trading journey. Although they've been available for current members for a while now, I thought it was worth the taking the time on the show to help you understand the thought process behind each track as well as offer my best tips and advice for setting and hitting your goals as a trader.