The Option Alpha Podcast

Show Notes: http://www.optionalpha.com/show44Options traders often reference the "Greeks" which include delta, gamma, vega and theta of their underlying positions as a way to measure the sensitivity of an option's price to market movements.And while looking at option greeks can be helpful, there's also a big misconception about them... one that trips a lot of traders up early on in their career.Most traders falsely assume that the "Greeks" are part of an options price - but they are NOT part of option pricing. Option greeks are used only to estimate what an option price might do reacting to specific market changes.Seems like a simple error but the resulting consequences could be the difference between winning and losing on your next trade.In today's show, I'll run through each for the four major options greeks and tell you which ones you should be focusing on as you plan your next trade and how checking the greeks can help with choosing the right options strategy.

Show Notes: http://optionalpha.com/show43Back in mid-2014 we surveyed our members and it completely changed our business.We overhauled our video training, threw out all the junk and added more in-depth modules and PDF guides that everyone had been asking for. The result was an almost explosive growth in our ability to reach and train people. Realizing just how powerful this was in 2014 I wanted to survey our members again to see if there were any “missing link” that we needed focus on.After sending just 2 emails we got back 1,378 completed surveys. Truth be told there was actually 4,503 responses but only 1,378 were considered 100% complete. Upon reading through the pages and pages of responses I also decided to reach out to 68 people for phone interviews and to learn more about how they trade options and what struggles they were having.In the end, the last couple of weeks analyzing the data and reflecting on the interviews has made it clear that as a company, Option Alpha is on the right track but could do so much more and needed to pivot. We could be so much more impactful than we already are if we focus on depth not width in our training.In today’s show, I wanted to give you a little insight into the things we’re working on here at Option Alpha that we know will help you make more money trading options in the future. And in the process, I talk about my conversations with the people I interviewed, why I was shocked at the questions they asked, and finally the 3 new “Tracks” we’ll be rolling out soon based on the feedback we got.

Show Notes: http://optionalpha.com/show42The Stochastics indicator has long been a favorite for investors and could arguably be one of the most popular technical analysis indicators.Today I’m going to show you the results of our backtesting analysis on the Stochastics Indicator and I think you’ll find it extremely useful wWhether you’ve used it before to trade or if this is your first time looking it up.Now, unlike the results we saw in  Show 41 of the podcast, today’s mini-case study did see a positive correlation between win rate and overall net profitability of the indicator after making a small change to the way we generated signals.Learn more about SIGNALS: http://optionalpha.com/signalsAs we’ve been trying to prove with case studies on the  Simple Moving Average,Absolute Price Oscillator and today with Stochastics; there are clearly winners and losers that we found as part of our 20-year technical analysis research report.

Today I’m going to give you a very special sneak peak inside our new technical analysis backtesting report called SIGNALS.Learn more here: http://optionalpha.com/signalsSpecifically, we’re going to look at how the Absolute Price Oscillator performed over the course of 20 years, testing 223 different stocks and the subsequent signals generated from those trades. What’s the point of telling you all this? There’s no hiding that this is meant to be a little bit of a teaser for you because I think everyone could benefit from reading it.There’s no hiding that this is meant to be a little bit of a teaser for you because I think everyone could benefit from reading this research report but even if you don’t buy a copy of SIGNALS then this 1 tip we’re going to cover today will help you think more strategically about how you trade in the future.Show notes page: http://optionalpha.com/show41

Grab your copy here: http://optionalpha.com/show40We Backtested More Than 17.34 Million Stock Trades Over 20 Years to See What Really Works...Discover the specific indicators that generated winning trades 82% of the time and outperformed the market by 2,602% on average.Read the Entire Report in Just 30 Minutes. Get insights from 12 months of backtesting research of more than 1,476 different technical analysis indicator variations.Option Alpha's TOP 5 Indicators. We revealed our Top 5 indicators (with specific settings) that resulted in the highest overall returns, safety and consistency long-term6 Optimal Settings Cheat Sheets. Specifically designed to be your “quick reference” directory with the optimal indicator settings for each of the eight dominant performance metrics we tracked.25 Real-World Portfolio Simulations. See how various simulated portfolios were able to outperform the market by more than 2,602% on average.Grab your copy here: http://optionalpha.com/show40

Do you remember the feeling you had the first time you were introduced to  technical analysis or stock charting indicators in general?You were probably at some weekend stock market seminar or watching a video online, and everything just clicked in your mind. The volume signaling that more buyers were present in the market to drive up the price, or the lines showing where support and resistance were; it all just made logical sense.Forget reading reports and company filings digging for great stocks to buy. You finally had the tools you needed to conquer the markets and really start making money. Technical analysis was the “magic” bullet that all the pros were using, and now you were on the inside.Still, shortly after your introduction to technical analysis, in the back of your head a little voice asked, “Does this stuff really work?” It might have been immediately after your moment of glorious realization, or it could have been days or weeks later, but I guarantee it happened – because it happened to me too.Honestly Now, How Reliable is Technical Analysis for Stock Signals?Yet doesn’t it seem fair to ask about the reliability of technical analysis in today’s market right? With all the hype around technicals and the money being invested purely based off stock charts and volume indicators, we should know what works or what doesn’t?However, there has not been one conclusive report on the reliability and performance of various technical analysis indicators published that we’ve seen. Not one.So, I decided to finally do the research myself. . .During the initial planning phases leading up to this massive research report, my team and I found many different software services that offered the ability to backtest stocks and indicators one at a time. But in my opinion, everything was too narrow in focus. Nothing I found gave me the ability to split test hundreds of indicator settings, over an extended period with hundreds of different stocks.The 3 Big Questions about Technical Analysis Indicators We Asked 12 Months AgoTherefore, my team and I set out to create the most comprehensive backtesting report imaginable answering the three biggest questions investors had when it came to technical analysis:Is Technical Analysis more reliable than randomly picking a stock’s direction?If so, can you generate excess returns above just holding SPY on a consistent basis?If so, what are the specific indicators and settings that work best long-term?While I knew it would require an enormous commitment, I also was aware that it would help transform the way hundreds of thousands of investors, just like you, think about technical analysis.Imagine being able to finally know which technical indictors are the most reliable, most consistent and most profitable…After 12+ months of backtesting, analyzing more than 17.34 million individual trades, and investing nearly six figures into data, software, and four new employees, I am thrilled to finally launch our report this coming Monday, January 18th.http://optionalpha.com/show39

For years, I've had members ask me about options trading taxes, ways to reduce your taxes, the best legal structures, international trading taxes and hundreds of other questions on the subject.Recently I decided to survey just our PRO and ELITE members to find out what questions they wanted specifically answered when it came to trading taxes. What were the hot-button issues they had and subsequently never found an answer to?After hundreds of responses I compiled a long list of questions I would get answered for you...Today we're releasing Part 1 of a three-part series all about options trading taxes. And to help facilitate the discussion we've invited CPA Brandon Hall on the show we specializes in securities taxation to get professional answers.Once we are done with this mini-series we'll also be compiling and releasing a guide on trading taxes to our members. Plus, if you have any follow-up questions you'd like Brandon to answer or be included in our next show, please add them to the comment section below.http://optionalpha.com/show38

Part of our mission here at OptionAlpha.com is to offer the highest level of transparency possible in order to help you gain more confidence in your own options trading system.This week we launched our newest feature after spending more than 5 months developing a propriety portfolio tracking software that monitors and reports key statistics and metrics in real-time. This software tracks and categorizes real money trades, not paper or backtested trades.Want to see the most recent stats updated in real-time each day? Just head over to the Option Alpha Performance page.In today's show, I want to introduce our overall findings and numbers to you (both the good and the bad) and explain how this has already shaped my outlook and trading strategy moving forward.As part of our higher level memberships, we stress that options trading is just a game of numbers and statistics. Your focus should be on placing lots of small, high-probability trades that captures the long-term overstatement of implied volatility.Hence, our performance metrics that we'll walk through in this podcast will focus on win rate, average profit/loss, time held and IV differential which to us represents the ability to generate consistent income.http://optionalpha.com/show37

I'm crazy excited to finally bring you my interview with Aram Basmadjian from TradeWithAram.com because it's such a genuine and honest conversation with a guy who continues to grow in his education and love of trading.In fact, he was hesitant at first to come on the show because I reached out to him after emailing back and forth for many months during his time in our membership. But I know that his story and investing journey would be invaluable to both new and experienced traders who listen to this show.As we move through the interview you'll hear his strategy for both short term weekly trades and longer term positions that he enters. Plus, we'll cover some of the major indicators he uses for a "collective" determination in future market direction.Ready for another amazing interview with a real trader who's making it happen each month? Let's dive into the show with Aram.Quote: "You develop your own style by taking the best of everyone else and put a little of yourself into it."http://optionalpha.com/show36

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. . .