1. TRADING COURSE – SESSION 6
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2. DISCLAIMER
Any information contained in this presentation is for educational purposes only. Neither IQ Financial Services, LLC, Gavin McMaster nor its subsidiaries nor any of their respective officers, employees, representatives, agents or independent contractors are licensed financial advisors, registered investment advisors, or registered broker dealers. Neither do they provide investment advice, financial advice or make investment recommendations and they are not in the business of transacting trades. Nothing in this communication constitutes a solicitation, recommendation, promotion, endorsement or offer to buy or sell by IQ Financial Services, LLC or other described above of any particular security, transaction or investment.
Any trades and / or results covered in this presentation may or may not be live trades.
All trades and trading results are believed to be accurately presented. However, since the trades may not have been executed in the market, the results may have been under or over compensated for the impact, if any, of certain market factors such as liquidity, slippage and commissions. Therefore there can be no guarantee of accuracy or completeness.
The risk of loss in trading securities and options in particular can be substantial. Customers must consider all relevant risk factors, including their own personal financial circumstances, before making any financial transaction. Options involve risk and are not suitable for all investors. See the Options Disclosure Document: Characteristics and Risks of Standardized Options, available from
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3. OUTLINE Market Update Position Update The Wheel Strategy 3
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4. HOLDING PATTERN Bounced From Oversold on Daily Timeframes
Quarter End Boost
Oversold On 30min
Negative Divergence On Weekly
Semiconductors Still Strong
Rotation – AMZN, FB, PCLN, TSLA, TWTR > Utilities
Whipsaw. Dead Cat Bounce? 4
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11. IRON CONDOR UPDATE Around $900 Profit. Overadjusted??
Good Day Today – Negative Delta Helped
Short Put Delta -8.00
Short Call Delta 7.06 11
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14. BEARISH BUTTERFLY UPDATE
Around $260 Profit
Right At The Centre Point
Greeks Looking Good 14
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16. IRON TRAPDOOR UPDATE Around $320 Profit
Need A Big Move Down. It’s Possible Though
Short Put Delta 3
Short Call Delta 7 16
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19. POTENTIAL TRAPDOOR ADJUST.19
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21. COMBINED POSITION 21
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24. THE WHEEL STRATEGY Similar to Covered Call Strategy
Longer Term Strategy With Monthly Income
Buy Stocks For Less
Need Strict Trading Rules 24
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26. SELLING PUTS Sell a Put. In Other Words, You Are Short A Put
You Have The Obligation To Buy At The Strike Price
You Receive Premium 26
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27. WHY SELL PUTS Great Way To Get Long A Stock
Purchase Stock For Less Than The Current Price
If Stock Is Flat Or Rises, You Collect Premium Income
Can Keep Collecting Premium Income 27
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28. TAKING OWNERSHIP
If The Stock Falls Below The Strike Price, You Are Assigned on 100 Shares
Now You Can Start Your Wheel Trade 28
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29. THE PROCESS Have To Be Willing To Own 200 Shares of The Stock
Sell 1 Put. If the put expires worthless, revert to step 1 and sell another put.
Once assigned on the short put, you hold 100 shares. If you are still bullish on the stock, write another put. At the same time you sell a covered call on the 100 shares.
If the stock falls, the 2nd put is assigned, completing the investors’ total order of 200 shares. 29

30. THE PROCESS
Now that you own 200 shares, sell 2 covered calls against those shares
The chosen strike price and expiry month will be determined by the investors’ outlook on the stock
Once the stock rises and the 200 shares are called away you can repeat the process 30
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31. BENEFITS OF THE WHEEL
Put and call selling helps generate significant monthly income
Shares can be purchased for less than their current price
Option premium effectively reduces the average cost of the share purchase
Dividends received from holding the shares will produce another source of income
By adhering to a strict process, you can take some of the emotion out of your investment decision making 31

32. RISKS OF THE WHEEL
Losses can mount up quickly if you do not have stop losses in place
Traders should be wary not to be enticed by stocks that have high option premium. High option premiums mean the stock is more volatile
This strategy should only be attempted on stocks you are willing to own 32
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33. 2008 - 2009 Stocks Continuing To Fall
End Up Selling Calls For Less Than Your Cost Basis
Wheel Still Performed Better Than Outright Stock Ownership
Need To Use A Stop Loss 33
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35. SOME GUIDELNES TO CONSIDER
Sell First Put When IV Is In The Higher End Of The 6 Month Range
Wait For A 5% Pullback Before Selling First Put
Stop Loss 15% Below Where The Stock Was Trading When First Put Was Sold
Adjust Stop Loss If Multiple Puts Have Been Sold? 35
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36. SOME GUIDELNES TO CONSIDER
Sell Puts 5% OTM? Delta?
Sell Call 5% OTM. Or Near Initial Stock Price
Sell First Put When RSI < 30
Stick To Low Beta, High Dividend Stocks 36
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37. SOME GUIDELNES TO CONSIDER
If The Stock Continues To Fall, It’s Ok To Sell A Call Below Cost Only If You Have Received Enough Put Premiums To Offset The Cost Basis
If You Have Sold Numerous Puts, Your Actual Cost Basis Can Be Very Low 37
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38. WHICH STOCKS? JNJ, KO, MO, KMB, SPY, WMT, IBM, MSFT
Other High Dividend Stocks. Industry Leaders
EEM, EWZ?
TSLA, TWTR? AAPL, GOOG?
Stocks You Are Happy To Own In Your 401K 38
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39. EXAMPLE JNJ Trading at $98 at April 2 Sell $95 June Put for $1.50
JNJ Falls Below $95, You Get Assigned And Own 100 Shares With A Cost Basis Of $93.50
Now Sell Oct $97.50 Call For $1.50 and Oct $90 Put For $1.50
Received $450 In Premium. Bought Shares for $9,500 39
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40. EXAMPLE Cost Basis Is $9,050 or $90.50 Per Share
At October Expiry, JNJ Is Below $90.
Below $90 You Get Assigned On Another 100 Shares At $90
Now Sell 2 Oct $95 Calls 40
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41. EXAMPLE Bought 100 Shares At $95 and 100 At $90
Total Paid For 200 Shares $18,500 Ave $92.50
5 x $150 Received From Puts And Calls
Net Cost Basis Is $17,750 or $88.75 Per Share 41
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42. EXAMPLE
At October Expiry, If JNJ Is Below $95, Sell 2 More Calls. Collect Dividends
If Above $95, Your Shares Are Called Away
Total Profit = $95 - $88.50 x 200
$1,300 42
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43. EXAMPLE - GE Tough Trade But Worked Well In The End
In A Massive Hole, But Worked My Way Back
Ignored My Stop Loss
Finished With 20% Return Compared to -42% For The Stock 43
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45. CONCLUSION
Can help generate monthly income and gain exposure to a stock while reducing average cost.
Can produce a gain, even when the underlying falls.
There are risks involved and you need to stick to your trading rules.

46. THANK YOU! www.optionstradingiq.com
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