Options Simplified

DEFINING RISK, LEVERAGING A MINIMAL AMOUNT OF CAPITAL AND MAXIMIZING RETURN ON INVESTMENT 
WHERE HIGH-PROBABILITY OPTIONS TRADING FOR CONSISTENT INCOME THRIVES IN BOTH BEAR AND BULL MARKETS

May 23, 2020

Introduction:

Clearly, COVID-19 has been very damaging with an unquantifiable impact across Disney’s (DIS) business segments. Disney has had to shutter all of its worldwide Parks and Resorts. ESPN has been hit with the cancellation of virtually all sports worldwide. Advertising revenue coming through its media properties has been hit as companies scale back ad spending. All of its movie studio productions have been halted and movie releases postponed. Despite these headwinds, Disney’s streaming initiatives have been major growth catalysts for the company. Disney+ has racked up over 50 million paid subscribers in just five months, Hulu has 30 million paid subscribers and ESPN+ has 7.9 million paid subscribers. Disney+ has been wildly suc...

May 3, 2020

Introduction:

COVID-19 has become the black swan event that has materialized into a worldwide economic halt. The spread of the virus globally has crushed stocks and decimated entire industries such as airlines, casinos, travel, leisure and retail with others in the crosshairs. COVID-19 was the linchpin for the major indices to drop over 30% over the course of 22 days. This COVID-19 induced sell-off has been the worst since the Great Depression in terms of breadth and velocity of the sell-off while inducing extreme market volatility that hasn’t been since the Financial Crisis.

Although option trading provides a margin of downside protection and a statistical edge, when hit with a black swan event, no portfolio is immune from the wreckage....

April 30, 2020

Financials and COVID-19:

COVID-19 ushered in the real possibility of widespread loan defaults, liquidity issues, ballooning credit card debt and stressed mortgages. To exacerbate these COVID-19 realizations, a delicate balance between interest rates, Federal Reserve commentary, yield curve inversion and concerns over a potential/scale of depression in late 2020 must be attained. The financial cohort is in a difficult space as the broader economic backdrop continues to dictate whether these stocks can appreciate higher. Ironically, in 2019 banks logged record share buybacks and increased dividend payouts stemming from successful stress tests. The initial shock of the COVID-19 pandemic resulted in the market capitalizations of many large...

April 19, 2020

Introduction:

It’s no surprise that HealthEquity (HQY) has been crushed in the face of the COVID-19 market meltdown. COVID-19 caused the fastest and most aggressive selloff in history, with the indices falling ~35% over the course of 23 days. HQY has fallen from its 52-week highs of $89 to a low of $35 or 60% during this market meltdown.

Considering HealthEquity’s unique position as being distinctly disassociated from drug pricing issues, rising insurance costs or the pharmaceutical supply chain, this sell-off is a great opportunity for an entry point. As COVID-19 inevitably subsides, HealthEquity is in a strong position and being offered at a heavy discount. For long-term investors, HealthEquity presents a compelling picture of growth w...

April 13, 2020

Introduction:

Now is as good time as any to put on some speculation plays considering the fact that this COVID-19 black swan event may be a once in a lifetime opportunity. This COVID-19 induced sell-off has been the worst since the Great Depression in terms of breadth and velocity of the sell-off. This health crisis has crushed stocks and decimated entire industries such as airlines, casinos, travel, leisure and retail with others in the crosshairs.

The broader indices have shed approximately a third of their market capitalization into the month of April. Some individual stocks directly related to the COVID-19 pandemic have lost ~50% to well over 80% of their market capitalization. Investors have been presented with a unique opportunity...

April 9, 2020

Introduction:

An opportunity to begin or reinforce a portfolio foundation in the midst of the COVID-19 pandemic has been presented. COVID-19 was the black swan event that only comes along on the scale of decades. This COVID-19 induced sell-off has been the worst since the Great Depression in terms of breadth and velocity of the sell-off. This health crisis has crushed stocks and decimated entire industries such as airlines, casinos, travel, leisure and retail with others in the crosshairs.

The S&P 500, Nasdaq and Dow Jones have shed approximately a third of their market capitalization with the sell-offs coming in at 33%, 29% and 36%, respectively through March 20th 2020. Since then, stocks have attempted rallies however these have fallen...

March 31, 2020

Introduction:

Just before the COVID-19 pandemic struck the markets, Ray Dalio was recklessly dismissive of cash positions, stating “cash is trash”. Even Goldman Sachs proclaimed that the economy was recession proof via “Great Moderation”, characterized by low volatility, sustainable growth and muted inflation. Not only were these assessments incorrect but they were ill-advised in what was an already frothy market with stretched valuations. I’m sure Ray Dalio quickly realized that his “cash is trash” mentality and public statements were imprudent. The COVID-19 pandemic has been a truly back swan event that no one saw coming. This health crisis has crushed stocks and decimated entire industries such as airlines, casinos, travel, leisure a...

March 25, 2020

Introduction:

The coronavirus (COVID-19) epidemic has pummeled stocks and has caused a complete collapse of the entire market. Broader indices such as the S&P 500, Nasdaq and Dow Jones have lost over 20% of their value while most individual stocks have lost 20%-70% of their market capitalization. Airlines, cruise lines and casinos have been hit particularly hard. Other stocks have been hit due to the market wide meltdown and many opportunities have been presented as a result. I’d be remiss if I didn’t use this unique opportunity to start buying stocks and take long positions in high quality companies. Over the course of this market sell-off, I have started to take long positions in individual stocks, particularly in the technology secto...

March 3, 2020

Introduction:

The combination of CVS Health (CVS) and Aetna is proving to be a success after initial skepticism by investors. CVS has broken out recently due to a string of better than expected quarters in part attributable to the Aetna acquisition. CVS is generating large amounts of free cash flow, paying down debt and returning value to shareholders in a variety of ways. To further boost long-term growth prospects, restore growth and fend off potential competition, CVS combined with Aetna. This combination creates the first through-in-through healthcare company, combining CVS's pharmacies and PBM platform with Aetna's insurance business. The new CVS combines its existing pharmacy benefits manager (PBM) and retail pharmacies with the s...

February 23, 2020

Facebook Remains Compelling:

Facebook (FB) tanked after announcing its recent quarterly earnings despite beating on both the top and bottom line numbers. In addition to the strong revenue and income figures, user growth across its platform grew by a robust clip and the company authorized an additional $10 billion for its share repurchase program. The culprit was a sharp rise in spending and expenses to content with a slew of regulatory, user and legal battles the company is waging on the privacy front. This minor sell-off provides investors with a buying opportunity in top tier large cap company that continues to grow double digits with a long runway for further growth and monetization of its platforms....

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Noah Kiedrowski

Founder: stockoptionsdad.com

 

I'm Noah Kiedrowski, founder of stockoptionsdad.com. Where it's my goal to simplify options trading. Demonstrating how high probability options trading for consistent income thrives in both bear and bull markets. Options are a bet on where stocks won't go, not where they go. Enabling investors to mitigate risk and circumvent drastic market moves while generating consistent income in a high probability manner.

The vast majority of my trades are risk-defined while leveraging a minimal amount of capital in order to maximize return on investment. All performance metrics can be found under the Performance tab. My average income per winning trade exceeds $150. For any given trade I target roughly 7-15% ROI at a delta of ~0.15 or ~85% probability of winning the trade at expiration. In doing so, I typically hold ~50% of my portfolio in cash.

I always strive to trade in high implied volatility environments across a wide array of tickers to maximize sector diversity. Trading across uncorrelated tickers and maximizing the number of trades is essential for long term success in options trading.

Did you know that a staggering 92% of actively managed funds do not outperform their benchmark over 5, 10 and 15 year time horizons? Interestingly, over a ~25 year time period from 1983-2006, 39% of stocks in the Russell 3000, comprising the largest 3000 companies in the U.S., were unprofitable investments while 64% of stocks underperformed the index. Shockingly, only 25% of stocks were responsible for all the market’s gains from this ~25 year period! Taken together, investors only have a 36% chance of picking a winning stock that may or may not outperform the broader index. Options trading provides a statistical edge in trading that individual stock investing simply can't offer.

To this end, stockoptionsdad.com is a venue I created to share investing ideas and strategies with an emphasis on options trading. My aim is to empower investors and traders alike to leverage options trading as part of an overall investment strategy. I offer many tutorials, ideas, strategies, timely trades and actionable updates for the retail investor. My goal is to provide real-life examples of options trading from a peer investor in an effort to demonstrate meaningful portfolio returns while mitigating risk and accentuating returns.

 

Contact us via email:

stockoptionsdad@gmail.com

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