FANG, an acronym created by Jim Cramer a few years ago, is representative of four of the most popular and best-performing tech stocks in recent memory - Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Google (GOOG). How those four stocks are relevant to us?
Well, those are stocks that we have been trading since 2003 using our unique Calendar Spread strategy.
This strategy has been one of our best performers. We don't really care what the stock does, and we close the trade before earnings. The gains are usually based on volatility skew that exists before earnings and widens as we get closer to the announcement date.
The last earnings cycle was no exception. This is how those trades performed in October 2016 cycle:
- FB - 37.2% gain
- AMZN - 30.0% gain
- NFLX - 26.3% gain
- GOOG - 57.9%, 37.3%, 45.8% and 21.6% gains (yes, we milked it 4 times in one cycle)
Here are the results of those trades since we started trading them:
Why we trade those non-directional strategies instead of just buying the stocks? Few reasons:
We don't have to guess the direction the stock is moving.
We don't have to study the fundamentals and to find out if it's still a good buy?
In case of earnings miss (see AMZN case), we don't care if the current pullback is just bump in the road or there is more downside ahead of us.
We don't care if the growth story is still intact or over.
It was an excellent earnings season for us. We also booked 34% gain in TSLA, 19% on NKE and few more nice winners. Our model portfolio was up 22.9% in October alone, and up 80.1% since April.
Some members did even better. Here is a testimonial from one of our members after we closed FB trade:
This member joined SteadyOptions 3 years ago as a complete novice. He came a looooong way. This is where hard work, commitment and determination can bring you.
At SteadyOptions we spend hundreds of hours of backtesting to find the best parameters for our trades:
- Which strategy is suitable for which stocks?
- When is the optimal time to enter?
- How to manage the position?
- When to take profits?
If you want to learn more how to use our profitable strategies and increase your odds:
What Is SteadyOptions?
Full Trading Plan
Complete Portfolio Approach
Diversified Options Strategies
Exclusive Community Forum
Steady And Consistent Gains
High Quality Education
Risk Management, Portfolio Size
Performance based on real fills
Non-directional Options Strategies
10-15 trade Ideas Per Month
Targets 5-7% Monthly Net Return
Recent Articles
Articles
Pricing Models and Volatility Problems
Most traders are aware of the volatility-related problem with the best-known option pricing model, Black-Scholes. The assumption under this model is that volatility remains constant over the entire remaining life of the option.
By Michael C. Thomsett, August 16
- Added byMichael C. Thomsett
- August 16
Option Arbitrage Risks
Options traders dealing in arbitrage might not appreciate the forms of risk they face. The typical arbitrage position is found in synthetic long or short stock. In these positions, the combined options act exactly like the underlying. This creates the arbitrage.
By Michael C. Thomsett, August 7
- Added byMichael C. Thomsett
- August 7
Why Haven't You Started Investing Yet?
You are probably aware that investment opportunities are great for building wealth. Whether you opt for stocks and shares, precious metals, forex trading, or something else besides, you could afford yourself financial freedom. But if you haven't dipped your toes into the world of investing yet, we have to ask ourselves why.
By Kim, August 7
- Added byKim
- August 7
Historical Drawdowns for Global Equity Portfolios
Globally diversified equity portfolios typically hold thousands of stocks across dozens of countries. This degree of diversification minimizes the risk of a single company, country, or sector. Because of this diversification, investors should be cautious about confusing temporary declines with permanent loss of capital like with single stocks.
By Jesse, August 6
- Added byJesse
- August 6
Types of Volatility
Are most options traders aware of five different types of volatility? Probably not. Most only deal with two types, historical and implied. All five types (historical, implied, future, forecast and seasonal), deserve some explanation and study.
By Michael C. Thomsett, August 1
- Added byMichael C. Thomsett
- August 1
The Performance Gap Between Large Growth and Small Value Stocks
Academic research suggests there are differences in expected returns among stocks over the long-term. Small companies with low fundamental valuations (Small Cap Value) have higher expected returns than big companies with high valuations (Large Cap Growth).
By Jesse, July 21
- Added byJesse
- July 21
How New Traders Can Use Trade Psychology To Succeed
People have been trying to figure out just what makes humans tick for hundreds of years. In some respects, we’ve come a long way, in others, we’ve barely scratched the surface. Like it or not, many industries take advantage of this knowledge to influence our behaviour and buying patterns.
- Added byKim
- July 21
A Reliable Reversal Signal
Options traders struggle constantly with the quest for reliable reversal signals. Finding these lets you time your entry and exit expertly, if you only know how to interpret the signs and pay attention to the trendlines. One such signal is a combination of modified Bollinger Bands and a crossover signal.
By Michael C. Thomsett, July 20
- Added byMichael C. Thomsett
- July 20
Premium at Risk
Should options traders consider “premium at risk” when entering strategies? Most traders focus on calculated maximum profit or loss and breakeven price levels. But inefficiencies in option behavior, especially when close to expiration, make these basic calculations limited in value, and at times misleading.
By Michael C. Thomsett, July 13
- Added byMichael C. Thomsett
- July 13
Diversified Leveraged Anchor Performance
In our continued efforts to improve the Anchor strategy, in April of this year we began tracking a Diversified Leveraged Anchor strategy, under the theory that, over time, a diversified portfolio performs better than an undiversified portfolio in numerous metrics. Not only does overall performance tend to increase, but volatility and drawdowns tend to decrease:
Monday, December 21, 2020