DAILY TRADE NOTIFICATION SERVICE - EXAMPLE
(Stand alone offering and included with Annual Membership)
The daily trade notification service provides actionable real-time trade notifications for all trades. Removes the guess work of selecting tickers to trade, highlights underlying securities with favorable IV rank, in-depth commentary on each trade placed, screenshot from brokerage account capturing each trade and monthly reports summarizing trades and metrics. All trades are risk-defined via put spreads, call spreads and iron condors. Example trade notifications received via email and text. This is a snapshot of what you can expect to receive when you subscribe to the trade notification service with email and text examples below.
Text Notification Example:
Below is an example of the text alerts for each trade notification that accompanies the detailed email notification.
Monthly Metrics Report Example:
Below is an example of a monthly metric report from January 2021 that comes with the trade notification service.
Trade Notification Example:
Below is an example of an opening trade notification using a risk-defined put credit spread on Apple (AAPL):
Hi Members
Trade Type: Put Credit Spread – Position Opened
AAPL 31DEC20 @ $112 / 31DEC20 @ $107
Per Contract Premium: $0.46
Required Capital Per Contract: ($112 - $107) - Net Premium of $46 = $454
Delta (Probability of Success): 0.15 (~85%)
IV Rank: N/A
Opening Trade Set-Up:
Sell-to-open leg #1
Buy-to-open leg #2 (protection leg)
You agree to buy shares at the higher out-of-the-money strike until expiration of the contract. You also bought the right to sell the shares at the lower out-of-the-money strike that will serve as protection and define your risk. A portion of the premium income received from selling the higher strike was used to buy an out-of-the-money lower strike option. The difference in premium received and premium paid out for the protection is your net premium income. The difference between your strikes will be your max loss less the net premium received.
As the contract life-cycle unfolds and the stock does not break below the out-of-the-money strike, profits can be realized early and/or let the contract expire worthless to capture the entire net premium. Closing the trade and managing winners early in the option life cycle to realize profits early is highly recommended.
Commentary:
The strike of $112 provides a margin of safety of roughly 8.6% to the downside from current levels since shares are currently trading at $122.50 per share.
I will actively manage the trade to avoid assignment. If the stock doesn't break below the higher strike price then I'll walk away with the premium in hand and re-purpose the cash for other trades.
Risk Defined Trade: A put credit spread was sold by buying an out-of-the-money put for protection in the event the stock breaks through the higher strike price. The purchase of the put will allow you to sell the stock at the lower strike thus defining risk.
Closing Trade Set-Up:
Buy-to-Close Leg #1 to close out the leg for debit
Sell-to-Close Leg #2 (protection leg) to close out the protection leg for a credit
The difference between your debit and credit to close out both legs will be added or deducted from the original net premium received.
Noah Kiedrowski
Founder and Managing Member
Stock Options Dad LLC
A Registered Investment Adviser (RIA) firm
