Presentation on theme: "OPTIONS TRAINING PROGRAM"— Presentation transcript:
1 OPTIONS TRAINING PROGRAM SMB TRAININGOPTIONS TRAINING PROGRAMPresents:
2 Disclaimer1. SMB TRAINING is NOT a Broker Dealer. SMB TRAINING engages in trader education and training. SMB TRAINING offers a number of products and services, both electronically (over the internet through Smbtraining.com) and in person. Through Smbtraining.com, SMB TRAINING offers the “Virtual Trading Floor”, a community through which independent traders (subscribers), as well as T3 Trading Group, LLC traders, observe a virtual trading floor environment (as described below) for educational purposes. SMB TRAINING also offers web-based, interactive training courses on demand.2. The seminars given by SMB TRAINING are for educational purposes only. This information neither is, nor should be construed, as an offer, or a solicitation of an offer, to buy or sell securities. You shall be fully responsible for any investment decisions you make, and such decisions will be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance, and liquidity needs.3. This material is being provided to you for educational purposes only. No information presented constitutes a recommendation by SMB TRAINING or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy. The content neither is, nor should be construed as, an offer, or a solicitation of an offer, to buy, sell, or hold any securities. You are fully responsible for any investment decisions you make. Such decisions should be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance and liquidity needs.4. SMB Training and SMB Capital Management, LLC are separate but affiliated companies.5. T3 Trading Group, LLC is a Registered SEC Broker-Dealer and Member of the CBOE Stock Exchange (CBSX www.CBOE.com). All trading conducted by contributors on Virtual Trading Floor is done through T3 Trading Group, LLC Any information contained in this presentation is for educational purposes ONLY. Neither Locke In Your Success, LLC, John Locke nor it’s subsidiaries nor any of their respective officers, employees, representatives, agents or independent contractors are, in such capacities, licensed financial advisors, registered investment advisors or registered broker dealers. Neither do they provide investment nor financial advice nor make investment recommendations, nor are they in the business of transacting trades. Nothing in this communication constitutes a solicitation, recommendation, promotion, endorsement or offer (buy or sell) by Locke In Your Success, LLC, or others described above, of any particular security, transaction or investment.7. The risk of loss in trading securities, options, futures and forex can be substantial. Customers must consider all relevant risk factors, including their own personal financial situation, before trading. Options involve risk and are not suitable for all investors. See the Options Disclosure Document: Characteristics and Risks of Standardized Options. Trading foreign exchange on margin carries a high level of risk, as well as its own unique risk factors. Please read the following risk disclosure before considering the trading of this product: Forex Risk Disclosure. Futures and forex accounts are not protected by the Securities Investor Protection Corporation (SIPC).8. No relevant positions.
3 Hypothetical Trades Disclaimer Please note: Hypothetical computer simulated performance results are believed to be accurately presented. However, they are not guaranteed as to accuracy or completeness and are subject to change without any notice. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Since, also, the trades have not actually been executed; the results may have been under or over compensated for the impact, if any, of certain market factors such as liquidity, slippage and commisions. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any portfolio will, or is likely to achieve profits or losses similar to those shown. All investments and trades carry risks.
4 Locke in Your Success, LLC. The ROCK Trading System Part 3 High IV Entry and September 2011 Expiration TradeBrought to you by SMB TrainingA World Leader in Options EducationCreated and taught by John LockeLocke in Your Success, LLC.“Know what you want, make it happen!”
5 John Locke President of Locke In Your Success, LLC Options Trader Success CoachOptions Trading Mentor
6 September 2011 Expiration Risk Management and Profit Targets Planned Capital - $50,000Profit Target - $10,000Max Loss - $10,000Profit Target may be adjusted up or down as trade progressesMax Loss may be adjusted down but will not be increased
7 Model put butterflies and check Delta We want to know what our Delta is 20 points over our short strikes (at 670). Currently, we are showing -90 at RUT 663. Therefore we need to check the analyze graph to see if Delta is greater than -200 at RUT 670
8 Excessively flat Delta indicates the market is too volatile for a normal entry and we should use a high IV entry modification
9 High IV Entry Guidelines Once we have determined we will do a High IV entry…. Model entry adding10 OTM calls with sufficient Delta to cut your position significantly Delta under -50Check to see if the calls are under 10 DeltaIF the calls are under 10 Delta, then proceed with Modified ROCK entryIF the calls need to be more than 10 Delta, then an M3 entry needs to be considered using M3R guidelines for timing the trade conversion back into ROCK configuration.IF you could go either way, check the chart to see if the market is experiencing excessive chop or it is trending.If market is excessively choppy use Modified ROCK entry.If market is trending, use the M3 entry
12 Modified ROCK Configuration Upside Guidelines In this configuration you should regularly be checking both your un- hedged Delta and your hedged Delta.We want to reconfigure to normal ROCK or M3 ASAP.If un-hedged Delta climbs to over -200 and underlying is LESS than 20 over short strikes, sell the hedges and reposition to normal ROCK configuration.If hedged Delta climbs to over -200 and underlying is MORE than 20 points over short strikes, roll up the put butterflies to between 10 and 20 points under price and then test to see if numbers work for a normal ROCK entry. If so, reconfigure to normal ROCK, IF not, we will either reposition our modified ROCK or reconfigure to M3
13 Modified ROCK Configuration Upside Guidelines If underlying exceeds 40 points past short strikes OR trade goes negative Theta, roll up the put butterflies to between 10 and 20 points under price and then test to see if numbers work for a normal ROCK entry. If so reconfigure to normal ROCK, IF not either hold modified entry or reconfigure to M3
14 Modified ROCK Configuration Downside Guidelines When Delta exceeds +100, sell positionTest to see if Normal ROCK, M3 or Modified ROCK entry is appropriate for re-entryRe-enter position as appropriate
15 August 24 (6 days) – RUT at 691, up about 30 points, and trade has gone negative Theta
49 Summary In this section we covered: September 2012 Expiration Trade Modified ROCK EntryTransition from Modified ROCK to Normal RockAdjustment into ½ ROCK with 1 roll backAdjustment into CAT from ½ ROCK with 1 roll backRemoving risk for expiration
50 In Part 4……M3 EntryGo though February 2012 Expiration Sample Trade
51 Locke In Your Success, LLC John LockeFacebook: Locke in Your SuccessTwitter: locke4success
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