This is part two of my video on Steady Options. And whenever I take a course I’m looking for many things, but one of the main things I look for is a proprietary trade. And you can note that, you know, that I’ve found many proprietary trades within courses. And the reason they’re proprietary is because nobody else uses them, and the reason why nobody else uses them is because they’re basically garbage. So I am looking for a proprietary trade, but I’m also looking for one with an edge. And within the Steady Options service, I found a unique trade that is worth investigating.
The trade is based on earnings. It’s an earnings setup and it’s placed before earnings and then taken off just before the earnings are released. And Steady Options has a name for this trade but I’ll call it something else and not give it away, because I don’t want to give away anything proprietary, so I’ll call the trade a Hedged Strangle.
So this Hedge Strangle has some very good volatility related characteristics which may provide an edge. And I was able to take a rather vague rules, the vague rules that I found within the service in the forum, and create concrete entries and exit rules. And this trade was first made public in the Steady Options forum in 2017, and there was a quick study done on the trade which used about 11 stocks. And I ran my own back tests and studies with these same stocks. I had to eliminate three of the stocks from the list for various reasons. For example one of them was $GME, which is a meme stock. So my study consists of eight stocks from the initial 2017 study.
And what I did was use the latest earnings cycle which took place in the last quarter of 2021 and I placed the trade in order to risk about a thousand dollars based on portfolio margin. And I did this to make all the trades comparable. And so here are the results.
Here are the back tests. I ran on these–one, two, three, four, five, six, seven, eight–stocks. You can see the stocks I ran the back-tests on, the open date, and the closed dates, days in trade, and you can see the profits that I made which every one of the trades was profitable.
There was a couple in there that barely became profitable. It wasn’t like every single trade was always going to be profitable, but if you can do eight out of eight that’s a pretty, pretty good look; at, you know, these trays don’t last but a week or so. And here’s some of the margin that I used. You can see here, I use $1,400 of margin in this particular trade and made over 10%. So I had a 10% profit target you can see here. $CSCO $2400 made that $240.
So here’s the $BBY. I had to use $12,800 in margin but in portfolio margin I only used $1,000. So there’s a little bit of a tweak that probably needs to be made, you know, these are kind of initial numbers here. I’m probably not going to pull out and use $12,000 worth of margin or probably just bypass that particular stock next time, you know, getting into the $1,600 and $3,000 worth of margin that’s no big deal. I think you can make $300 on these trades pretty easy. $2,500; I only made5% on $LOW. And then $MDT my margin was $3,750; I made 10% on that.
So overall my first little experiment set of back-tests look really really good with this particular trade structure and how it works. It really works in terms of volatility contracting and expanding based on earnings. And there’s also a ratio involved and a couple things but I like the way the trade looks. It looks like it has an edge. Just because of this alone the alert services take worth taking a look at.
My conclusion is that this trade structure has an edge and with further tweaks this looks like a trade worth studying and learning. In all the courses I’ve taken, which is over 50 courses, I’ve I have not found a trade structure with an edge with the exception of Ron Bertino’s course until now. And as you know I’m following Kim, the head trader’s trades. And you know, even if I lose money with his alerts, I still got serious value from this alert service because I learned this one trade. And for this reason alone I’m recommending this service. If you’re interested I did provide an affiliate link in the description of this video.
If you’re a trader looking for trading consistency, if you keep changing your approach looking to add one more rule that will get you over the top I’m going to help you for free. Stay with me for the next minute or so.
Now who am I to make this claim, my name is Karl Domm, Karl with a ‘K’, and it took me over 20 years to finally succeed to become a profitable options trader. I did that around 2015 and I have publicly proven to be a profitable trader since I started sharing my P&L on my Youtube channel in May of 2019. Now my larger options trading account started with $110,000 and now is worth over $165,000 and I’m the only Youtube instructor that shares my daily P&L proving that I am a profitable options trader.
Now I’ve asked many other instructors to share their P&L, but they don’t because they can’t because they actually lose money trading and I’m frustrated with the lies being told. If you’ve ever taken an online trading course I’m 99% sure that you’re frustrated and that you’ve lost money following these instructors. And you already know that they don’t share their P&L.
Now as far as trading myself, I just happen to have a passion for options trading and I spent over 27 years learning and trading. And I’m not necessarily interested in the technical aspects of options from a scholastic point of view. I’ve been passionate about the most efficient way options can make me money and this is my calling in life; as corny as that sounds. And I’ve even written a book on the subject; even though I hate writing. For some reason trading ideas just flow into my head all the time and I take those ideas and I spend hours and hours back-testing them.
In 2017, I discovered a great course which taught me a specific trade structure which I’ve been able to mold and create specific rules around and capitalize on, but the problem is that it requires a special margin account and a lot of capital to be traded. So I set out to duplicate this trade structure in a way that could be done in a small account. And after back testing over 300 ideas, one of the trades I developed was a trade that I call The 2060.
This is a proprietary trade I developed almost from scratch. I initially created the course to sell it and I wanted to compete with these other Youtubers that were frustrating me with their fake claims. But what I’ve decided is I want to do what it takes to expose those Youtube fake gurus, and if I can offer something for free that is vastly superior to their paid products maybe I could put a debt in their business. Which in effect would be using my talents to help people.
Because of this, I’m currently providing The 2060 course at no cost. And this is a full course. It’s not a worthless free report or some piece of useless non-actionable information. This is a full course with black and white rules. Rules that you can use to take action and learn how profitable options traders trade. This course is worth $495, but I’m giving it away today for free. See the link in the description to sign up for the course.