Assignment

Good morning,

NOTICE: Sunday’s training is at 2 PM ET in the RagingBull chat room.

Yes, my long weekend assignment for you is to watch a movie. Here’s why.

MIT says this about options trading.

Retail traders are getting wiped out!

MIT is correct. 

The majority of traders do NOT know what they are doing.

Article recap:

1. Retail traders are losing big in options

2. The majority don’t know what they are doing

The obvious question, why not get on the opposite side of their trades?

That’s my edge in the $2,000 Small Account Journey.

Here’s the current $2,000 balance I’m trading. 

$2,000 - $18,488 up 824%

87% win rate

64 wins and 10 losses

Results not typical. Trading is hard. Nothing is guaranteed.

How’d I get all those wins?

Someone bought low probability out of the money options from me. 

I acted as the seller of those options.

Which means I had high probability at the onset of the trade.

And because I did a spread, I defined my risk.

Most traders will never understand this.

Because unlike you, they won’t take the time to learn.

Let me take a moment to applaud you for working hard and learning something new.

I love this CNBC article, it hammers MIT’s point home. 

Let me draw your attention to:

1. …most are playing a LOSING GAME

2. …majority are BUYING basic call and put options

3. …which have LOW PROBABILITY of profit

4. …if you do this, you’re likely to LOSE MONEY over time

I love that last bullet point. 

“Everybody in the business knows…”

What he should have said is, “If you can’t spot the sucker in your first half hour at the table, then you are the sucker.” - Mike McDermott (Rounders)

Let me sum this up for you.

The market is NOT your friend anymore than Teddy is Mike’s friend.

It wants to take ALL your money.

Now that you understand, it’s time to take action!

My edge?

Take the opposite side of the low probability, out of the money options suckers buy.

Tradeable with as little as a $2,000 margin account.

Which is why I call it the $2,000 Small Account Journey.

The numbers don’t lie. 

The Chicago Mercantile Exchange (CME) held a 3 year study. 

An average of 76.5% of all options held to expiry at the CME expired worthless!

That means if you bought an option and held it to expiry, there was about 23.5% chance of a favorable outcome. 

So why would anyone buy a low probability out of the money options.

Already answered above. They are either uneducated or a gambler.

Usually both.

Not our problem! 

In fact, it’s our edge. 

First, find out where most uneducated traders are losing lots of money.

Second, take the opposite side of their trades. 

Third, rinse and repeat. 

Keep in mind, I use a $2,000 balance to prove it’s tradeable with a small account. 

This is scalable for fat cats too. 

In a few months my latest $2,000 balance has grown 824% to $18,488. 

A $20,000 balance up 824% is $184,880 in a few months.

Results are not typical. Nothing is guaranteed. 

Sell options to uneducated traders that are buying low probability out of the money options. 

Again most traders don’t understand this.

Which is good, the more low probability trades means there’s plenty of high probability trades to be had.

I’m happy to teach you.

I’ve taught others. 

One of the ways I teach is by alerting my entries and exits BEFORE I make the trades. 

Looks like a text message on your smartphone. 

Like I did on META this week.

Entries are low priced too, which is why it works well with a small account. 

Entries tend to be in the $.70’s, $1.50’s, or $3’s on every trade. 

Like I said above. 

I’ve taught others. 

If you’d like my options trading blueprint for small accounts, keep reading.

So what’s actually happening to these buyers of low probability out of the money options? 

Let’s take a look at an example of a NFLX trade.

When a novice trader buys the $340 out of the money put option there’s only one way to win.

NFLX must fall below $340. 

This gives them low probability, let’s say 30%. 

That $6.10 price of the put option they bought has no true value. 

It’s only made up of time. 

Every minute NFLX is above $340, that $6.10 loses time value like a leaky bucket. 

Time value leaks on the weekends too. 

Time value always heads toward $0. 

And it does so at its fastest rate in the final 5-7 days before expiry. 

Bad for the buyer. 

Great for the seller! 

Time value of the option ‘leaks’ faster and faster as expiry approaches. 

And right into the account of the seller.

This is why I like to sell puts 1-2 weeks away from expiry. 

My order entry, as the seller, would look like this. 

And I can do this with as little as a $2,000 margin account. 

And it's a limited risk trade with a high probability of winning. 

Bottom line. 

The buyer of the low probability out-of-the-money $340 put only has 1 way to win → NFLX falls well below $340. 

The seller has 3 ways to win: 

1. NFLX can head lower, but as long as it’s above $340, the seller wins

2. NFLX trades sideways, the seller wins 

3. And of course the seller wins if NFLX heads up

Buying that low probability out of the money put option is betting NFLX will go down i.e. bearish.

Which means the seller (ME) is neutral to bullish. 

I call these bull puts. 

And that’s the main trade I make in the $2,000 Small Account Journey.

Do this on recent earnings winners with strong guidance and probability increases more. 

So why on earth would anyone buy a $340 out of the money put option on NFLX when MIT warns you’ll lose money?

Because most traders aren’t smart. 

But not you, you’re still reading. 

No option ‘buying’ in the $2,000 Small Account Journey.

Time to turn the tables and start taking high probability trades. 

I’ll even send you my entries and exits before I get in and out of these trades. 

Your assignment this weekend is to join the $2,000 Small Account Journey during my Presidents Day sale.

And then watch the movie Rounders.

Jason Bond

P.S. I want to point out that I cannot speak for my members’ performance, as results may not be typical and trading is HARD. And I cannot guarantee you will make money, but what I can guarantee is that I will work my BUTT OFF to teach you WHY I trade WHAT I trade.