The Option Alpha Podcast

Show notes: http://optionalpha.com/show64Nobody’s a perfect trader - not by any stretch. We all make mistakes, and when we own up to them, we dramatically increase our ability to overcome them in the future. With more than 35k members in our community here at Option Alpha, I've seen every possible situation and mistake you could come up with - and today we're going to go through what I know are the top 15 1/2 options trading mistakes people are making right now.Trust me; it wasn't easy to narrow these down to 15. Truth be told, I wanted to start rattling off more than 30, but I knew that I had to focus on only the most critical areas that could help shift or alter your trajectory. And of course, I'll make sure also to cover and talk openly about my shortcomings and challenges as a trader. In the end, my hope is that you recognize just one area where you are struggling and put together a plan of action to overcome it by the end of the week.

Show notes: http://optionalpha.com/show63A little over a year ago now the CBOE released its first round of options-based strategy performance benchmark indexes. Since, they’ve slowly increased the number of trackable option strategies on their website. Each strategy index is "designed to highlight the long-term utility of options as risk management and yield enhancing investment tools” and really helps bring some context to options trading for the little guys like you and me.In today’s show, I’ll highlight some of the more interesting strategy based index performance metrics I know will help you in your options trading journey. This includes; SPX Covered Combo Strangle, VIX Tail-Risk Hedge, SPX Protective Puts, and the SPX Monthly vs. Weekly Put Selling showdown. Plus, I’ll give you a little more information on some the options backtesting we’ve been doing here at Option Alpha and the up-coming release of our proprietary backtesting software soon.

Show notes: http://optionalpha.com/show62At least 2-3 times per week I’ll get an email from someone along these lines; “Kirk, why can’t we just buy the best dividend stocks right before the company pays the dividend, and then sell the stock the next day and keep the profit?” Seems like a cool idea, and I’ve definitely seen many smaller blogs peddling this idea to investors, but it might easier said than done.In today’s show I’ll help you understand the four most important dates you need to know when it comes to dividend investing, including a complete rundown of the fictional arbitrage opportunity that dividend investors are continuously searching for during the ex-dividend date. Plus, I’ll give you an alternative strategy for purchasing the stock at a discount, while reducing your tax liability, as well as the impact of dividend payments on options pricing.If you’ve got a friend or trading buddy who hasn’t made the jump to options yet and is still cashing “dividend stocks” and “dividend strategies” then this show might be the kick in the butt they need to start options trading. And of course, if you’d share it with them I’d be incredibly thankful! 

Show notes: http://optionalpha.com/show61I’m just going to come right out and say it - today’s show is going to blow your mind. Not because we are talking about some crazy complicated strategy or options pricing model, but because we’re talking about a dead simple system for selling options every day that generates 22% per year since 2009. And what’s so fascinating for me, the host of the show, is how calm and cool our special guest is talking about his strategy. It’s just so mechanical and systematic it’s almost boring (well not for me but maybe some people might think so).In today’s show I’ll be interviewing an incredible trader, real estate entrepreneur and patriot. You’ll hear how this former Army Officer who served in Iraq in 2003, subsequently awarded a Bronze Star, used his “options” experience in real estate to start selling covered calls. Eventually he transitioned into selling credit spreads on the major indexes and continues to generate consistent income with an annual average return of 22% per year. So yeah, you should listen to today’s show - and of course forward it to at least 3 other people you think need to hear it right now. 

Show notes: http://optionalpha.com/show60 What if I told you that Warren Buffett, yes that one, is actually just an options trader in disguise? Actually, he’s not disguising anything since his entire strategy and philosophy is all publicly available and linked below. But, that the $5 billion dollar options trading strategy he is using right now has the exact same core methodologies that we use here at Option Alpha, i.e. option selling.Unfortunately, this strategy and business setup is not commonly talked about in the media. Everyone ignores the 50,000 short put options he sold on KO or the 3-month short puts he sold before acquiring Burlington Northern Santa Fe. They are big trades that tell us a lot about the way he uses options but the media won’t cover those because it’s not “mainstream” enough to reach the masses. Lucky for you, we’re covering it today for you.In today’s show, I’ll help you understand why his most profitable business, which grew from $41 billion to $88 billion, is the insurance business and how you can apply the same principles to your own investment portfolio. Plus, I’ll walk through his biggest option trade that occurred during the height of the 2008 market collapse in which he sold short put options on 4 major market indexes around the world. If this show is even remotely helpful today, please consider sharing or sending it to just one friend or colleague you think might benefit from listening.

Show notes: http://optionalpha.com/show59It's easy for traders, myself included, to talk about our profitable trades. I mean who doesn't want to talk about making money right? But we know that we can't win on every trade and today I'm going to cover an in-depth case study on our EWZ short strangle.We started building the EWZ position with short strangles back in late November and ending making more 27 trades over the course of five months to adjust and hedge the position. It was by far one of our longest held positions, but at the end of the five month period we ended up turning a paper loss of $2,538 (the most we were losing at any one point) into a real loss of just $330. An 87% reduction in the loss.It took a lot of confidence in our adjustment strategy as well as patience to let the market cyclicality play out, and my hope is that today's show helps you understand the overall adjustment philosophy that helped turn this trade around. Sure, it would've been great to highlight a case study where a trade went from a loser to a winner. That just wasn't the reality with these short strangles, and yet, I'm still happy with the results even though we lost money after everything. Plus, if it helps you avoid or reduce risk on the next options trade you make, well then I've accomplished my mission.

Show notes: http://optionalpha.com/show58One of the most challenging aspects of options trading for most people is in finding the best stocks and setups to trade. And I completely understand since there are thousands of stocks from which to choose. So, how do you filter down to a handful of just the best stocks with the best trading potential?In today's podcast episode, I'll help simplify the process for you because I can almost guarantee that you're overthinking it. Finding the best stocks for options trading is actually very easy when you know what to look for and have a solid understanding of what your portfolio "needs" to maintain it's balance. Master these two points, and a little technical analysis if necessary, and you'll find that the possibilities are wide open.

Show notes: http://optionalpha.com/show57We 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.

Show notes: http://optionalpha.com/show56With 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/show55Market neutral, delta neutral, or balanced portfolio; call it what you want but the concept of making money regardless of where the stock market goes has been a long-time goal for many traders. But what happens when your portfolio becomes unbalanced? What are the best hedging strategies you can use to get back to a neutral stance? In today’s show, I'll walk through three different portfolio scenarios and offer my advice on the best hedging strategies to use to help re-balance your positions. You'll hear which options strategies to use if you're too bullish, too bearish or completely lopsided. Plus, I'll help you learn how to hedge stocks that don't have tradable option contracts.Of course, it all starts with a solid understanding of how to determine what yur portfolio looks like on either a beta-weighted or delta-weighted basis. It's enough anymore to just have a couple of bearish trades and a couple of bullish trades. You have to determine what the net impact of each position is in the overall portfolio. If you can do that, you'll be well on your way to consistently generating income with options regardless of the market direction. And as always, if you've got questions on portfolio management or hedging trades, add them in the comments section below, and I'll make sure to reply personally to every single one.