|
Historical Performance of 10K Strategy Stock-Based Portfolios:
Historical Performance of 10K Strategy Stock-Based Portfolios: At Terry’s Tips, we call our options strategy the 10K Strategy. We like to think of it as shorter than a marathon but longer than a sprint. Most people who trade options seem to prefer sprints, i.e., short-term speedy wins (or losses). The basic underlying idea of our 10K Strategy is to do the opposite of what most options traders do. Instead of buying short-term calls in hopes of a quick windfall gain, we primarily sell those calls to option speculators. Since something like 80% of all options expire worthless, we like our odds of selling those options rather than buying them. We like to think that we are sort of in the business of selling lottery tickets.
We buy longer-term options to use as collateral for selling short-term options. All options go down in value every day that the underlying stock remains unchanged. This daily decay in value is called theta in options parlance. Theta for short-term options is much greater than theta for longer-term options at the same strike price, and this difference in decay rates is what makes our strategy a successful one (most of the time).
At Terry’s Tips, we currently have 4 stock-based portfolios. Other portfolios are based on Exchange Traded Products (ETPs). ETPs include Exchange Trade Funds (ETFs) such as the S&P 500 tracking stock (SPY or the Dow Jones Industrial Average tracking stock (DIA), and Exchange Traded Notes (ETNs) such as volatility-based XIV, SVXY, VXX, and UVXY. We also have a portfolio based on options of USO where we are betting that the long term price of oil will be higher than it is today.
Three out of 4 of our stock-based portfolios have doubled in value at some point in their lifetime, and the 4th, Foxy Facebook is up 71% since we started it 10 months ago. The prospects look excellent for it to double before its first year has been completed. The record:
In a world of record low interest rates and anemic investment returns for most equities (even hedge funds lost money in 2015), these results offer a strong vindication of the 10K Strategy. Admittedly, NKE has tumbled steadily over the past 8 months and much of the gains have been eroded away, but a basic assumption of the strategy is that you select underlying stocks which you think will remain flat or rise over time. If you are wrong and the stock doesn’t do one of those things, you should expect to lose money on that investment. So far, we have been fortunate enough to pick winners.
I invite you to become a subscriber to Terry’s Tips so that you can learn the important details of carrying out the 10K Strategy on your favorite stock (assuming that options are available for it). If you are lucky enough to pick a winner, you would have an excellent chance to make many times as much as you would make just buying the stock. It doesn’t have to go up to be a winner – just remaining flat is almost always profitable with this strategy.
Many years ago, someone wrote a book that I bought – it was entitled “Happiness is a Stock That Doubles in a Year.” If you can find a stock that will stay flat or move higher, you might very well enjoy this kind of happiness once you learn how to execute the 10K Strategy.
As with all investments, you should only use money that you can truly afford to lose. Options are leveraged investments, and unless you totally understand the risks, you can easily and quickly lose more money than you could with the equivalent investment in the purchase of stock. I think it is worth a little work to educate yourself about the risks (and potential rewards) of trading options.
---------------------------------------
Any questions? I would love to hear from you by email (terry@terrystips.com), or if you would like to talk to our guy Seth, give him a jingle at 800-803-4595 and either ask him your question(s) or give him your thoughts. seth@terrystips.com
You can see every trade made in the actual option portfolios conducted at Terry’s Tips and learn all about the wonderful world of options by subscribing here. Why wait any longer to make this important investment in yourself?
Even better, you can become a Terry’s Tips Insider, and receive all our educational reports and materials absolutely free by opening a new account at the best options broker around - thinkorswim. If you open an account with our link, they will give you 60 days of free trading or up to $600, the same deals they give to everyone who opens an account with them. You must use this link to sign up - open thinkorswim account – and once you have funded your account with at least $3500, email Seth@TerrysTips.com and let him know that you have done it, and this is what he will do – sign you for our Premium Service package ($119.95 value plus an extra 4 months of our Premium Service, valued at another $190.80). You get $300.65 worth of services without paying us one penny.
I look forward to having you on board, and to prospering with you.
Terry
|
