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
Stock Options Dad, LLC

February 4, 2020

Introduction:

As 2020 unfolds and the markets continue to break through record highs, investors should heed these lofty levels. We’re in the longest bull market in history and the U.S. has started and ended a decade without a recession for the first time in history. By nearly all measures, these markets are overvalued with stretched valuations.    

Deploying a put spread strategy is a great way to define your risk while leveraging a minimal amount of capital to maximize returns. Whether you have a small account or a large account, a put spread strategy is an effective way to limit risk with a high probability of success. Trading options on stocks like Expedia (EXPE), Tesla (TSLA), Ulta Beauty (ULTA), Apple (AAPL), Disney (DIS),...

February 2, 2020

Introduction:    

The market has rendered AMC Entertainment (AMC) a worthless company. The stock has nosedived from a 52-week high of $17 to $6.50 per share resulting in a 62% reduction in market capitalization. Even worse, AMC was $33 per share in 2017 resulting in a multi year meltdown of 80%. The catastrophic stock collapse has occurred in the backdrop of record numbers at the domestic and worldwide box office. There’s a paradoxical disconnect between the record multi-year box office stretch and AMC’s stock price.

AMC recently posted a strong quarter and has diversified its revenue stream by rolling out its own loyalty program that now has over 900,000 members to evolve a large segment of its business mix towards a subs...

January 27, 2020

Euphoric 2019 and Bleak 2020 Forecast:

All three major indices ended 2019 in rarified territory as the Santa Claus rally capped off a euphoric market. The S&P 500, Nasdaq and Dow Jones ended 2019 at all-time highs. The S&P 500 posted its best return in nearly 20 years, coming in at a 28.9% return.

2019 was a unique year on multiple fronts where the markets roared higher despite impeachment proceedings, U.S.-China trade war, Federal Reserve actions, inverted yield curve and slowing economies abroad. Furthermore, for the first time in history, the U.S. economy has started and ended a decade without a recession with the economy expanding for a record 126 consecutive months (Figure 1).

Figure 1 – All three major indices reached all-time h...

January 18, 2020

Introduction:

American Airlines (AAL) is a cheap stock by many metrics and currently presents the best value in the airline sector based on valuation. Boeing’s (BA) 737 Max groundings have already been absorbed by the airline and moving forward American is looking to settle with Boeing. Boeing took a $4.9 billion after-tax charge in Q2 to compensate airlines for the grounding. American is expected to see some cash from that amount once a settlement is reached between the two parties. The company is reducing its debt load, increasing free cash flow, returning value to shareholders, expanding its network while having the youngest fleet among the major airlines. American Airlines is near a 5-year low on the cusp all the aforementioned aspe...

January 5, 2020

Introduction:

2019 has shaped up to be an historic year for the stock market indices. The S&P 500 posted its fourth best annual return in over 20 years, coming in at a ~29.5% return. Only two other years have outpaced these 2019 returns. These occurred in 1995 and 1997 posting returns of 34.1% and 31.0%, respectively. 2019 was a unique year on multiple fronts, most notably because the market returns outpaced even the most bullish forecast by any Wall Street analyst. The markets roared higher in the face of impeachment proceedings, U.S.-China trade war, Federal Reserve actions, inverted yield curve and slowing economies abroad. Furthermore, for the first time in history, the U.S. economy has started and ended a decade without a recession...

December 29, 2019

Introduction:

Baby Yoda and the phase one trade deal comes to Hasbro’s (HAS) recuse after a disastrous Q3 earnings call that resulted in the stock sinking 17%. Per Brian Goldner, “the threat and enactment of tariffs reduced revenues in the third quarter and increased expenses to deliver product to retail”. I feel that management was remiss when they forecasted their ability to circumvent the tariffs and then used the tariffs as a scapegoat to justify the company missing its numbers on both top line revenue and bottom line profit. Now the backdrop has changed in Hasbro’s favor with the phase one trade deal with China being reached and of course the new internet sensation Baby Yoda.  

The company is in a solid position moving into the holi...

December 26, 2019

Introduction:

Impeachment proceedings, U.S.-China trade war, Federal Reserve actions, etc., dominate the headlines and move markets in lock-step. The broader indices are at all-time highs and continue to set new high after new high despite the aforementioned variables. The markets have been on a steady rise for months without much resistance and overall volatility remains low, indicating that market participants have become overly confident and complacent. The S&P 500 has had a banner year in 2019, posting a year-to-date return of over 25% through mid-December. A “blow-off” rally may be under way at this market juncture and locking-in portfolio gains while mitigating risk is prudent. An options-based portfolio can offer a superior metho...

December 20, 2019

Introduction:

HealthEquity’s (HQY) tie-up with WageWorks is starting to bear fruit. The synergies of this combination were evident in the company’s Q3 2020 quarterly results as the stock rallied over 12% post earnings. HealthEquity made a bold move to acquire WageWorks for approximately $2 billion in an all-cash deal. This acquisition has expanded HealthEquity’s moat in the Health Savings Account space while providing new revenue verticals in complementary product offerings. This move is already expanding HealthEquity’s total addressable market as Consumer-Directed Benefits (CDBs) via pre-tax spending accounts such as additional Health Savings Accounts (HSAs), health and dependent care Flexible Spending Accounts (FSAs), health reimburse...

November 23, 2019

Introduction:

CVS Health (CVS) and Walgreens Boots Alliance (WBA) have broken out recently due to a pair of better than expected quarters and speculation of being taken private, respectively. These stocks have been beaten down for years with CVS and Walgreens plummeting by 54% ($113 to $52) and 49% ($97 to $49), respectively from their multi-year highs. Over $110 billion in combined market capitalization had been erased from these two companies. As of late, CVS has broken out to the mid $70s and Walgreens has demonstrated strength into the low $60s, well of their respective lows.

The single payer narrative being pushed by presidential frontrunners and the Amazon threat via its acquisitions of PillPack/Whole Foods potentially displacing t...

November 16, 2019

Introduction:

Disney (DIS) just delivered a stellar quarter beating on both the top and bottom line while continuing to roll out its growth initiatives. Disney’s growth rotation is still in its early stages with its remediation of its ESPN property and flurry of growth initiatives to meet modern day media consumption trends via streaming with its Disney+ property. In the backdrop, the company continues to dominate the box office year after year with a long pipeline of blockbusters in the queue, notably Frozen 2 and Star Wars: The Rise of Skywalker. Additionally, its Parks and Resorts continue to be a growth avenue with tremendous pricing power.

Disney is going all-in on the streaming front and will inevitably acquire full ownership of Hu...

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Noah Kiedrowski

Founder: stockoptionsdad.com

Contact: info@stockoptionsdad.com

 

I'm Noah Kiedrowski, founder of Stock Options Dad, LLC. 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 enable investors to mitigate risk and circumvent drastic market moves while generating consistent income in a high probability manner.

All of my trades are risk-defined in order to leverage a minimal amount of capital and maximize return on investment. All performance metrics can be found on the PERFORMANCE tab. For any given trade I target an ROI of 7-15% at an ~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, as part of the 10 OPTIONS TRADING RULES, 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. I also offer TRADE SERVICES for those that want to take their options trading to the next level. 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:

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