Past Meetup

Options and Spreads - Strategies & Tactics - with an outstanding options trader

This Meetup is past

35 people went

Details

Update 5/22 : Everything is re-confirmed for tonight.

We are delighted to have a remote talk and dialogue with Stuart A Johnston, author of the book Trading Options to Win: Profitable Strategies and Tactics for Any Trader (http://www.amazon.com/Trading-Options-Win-Profitable-Strategies/dp/0471226858/ref=sr_1_1?ie=UTF8&qid=1336588681&sr=8-1) . This is a completely practical book by a brilliant and successful trader, full of countless unique trading strategies.

What's more, he trades totally independently for his own account, just like many of us, so his perspective should be close to ours, unlike the case for those who manage the accounts of others.

Stuart Johnston focuses far above the level of mere mechanics, that is common in courses and webinars. As our title notes, he is all about real strategies and tactics.

Of course, this is invited talk - I approached him after following his work for years.

As described further below, our speaker will describe the Wimpy Trade - an easy stock option trade for the coming Memorial Day three-day weekend that is highly likely to be a winner, and another longer-term trade as well!

Following that main talk and ample discusssion with the speaker, we will ourselves review the talk and trades, to make sure everyone understands them, with the help of two of our own experienced options traders and show how the trades would be executed with a broker. Our members will also add their own perspectives to how they trade credit trades and on variations.

Stuart Johnston, known in forums as SAJ, is also the publisher of the subscription web site Time & Timing (http://www.timeandtiming.com/) . This site offers online access to a database of the histories of thousands of spread, seasonal, and outright trades, that is updated constantly to keep the extensive data current. It also includes studies of moving average crossovers, end-of-month analyses, market holiday patterns (Memorial Day, Labor Day, etc.) and even lunar cycles.

I consider the book to be the best one available on short option strategies, particularly for futures options. It also covers stock option strategies, such as before a 3-day weekend. In fact, SAJ is a frequent trader of stock options, as well as his mainstay futures options. I use this approach extensively myself, based partly on this book, so I am keenly looking forward myself to learning from him during the meeting. Our speaker does not do interviews or webinars in general, so this is a real opportunity to learn from someone who knows a lot.

Options credit strategies are sometimes criticized as being too risky. All of Stu Johston's work is based on his extensive and exhaustive statistical studies, which focus both on the distribution of returns and on risk. Credit trades may be highly profitable most of the time, so the big issue is risk. We will look to sort out the real bottom line on this issue, which may be far more positive than many believe - we will let people judge for themselves. This risk issue is absolutely critical, because people are aware that some short sellers have gone under following sudden large moves, so I would like to really bear down on this question to try to answer it.

The talk will describe the Wimpy Trade: "I'll gladly pay you Tuesday for a hamburger today." This is an easy stock option trade for the coming Memorial Day long weekend that could allow you to make some quick cash! We'll go into it in plenty of detail so that anyone should be able to execute it.

SAJ will then describe and demo a second trade, and go on to show how to explore the rich historical data on his Time and Timing site. I would suggest that many of you may want to get a free 30-day trial at www.timeandtiming.com (http://www.timeandtiming.com/) prior to the meeting, and bring along a laptop to follow along during the meeting. All it asks for is a name and email address - nothing more. It is not essential to do this, as we will be projecting Stuart Johnston's session.

There will be time for everyone to ask questions and interact with our speaker, who has offered to do his best to answer questions on any topic whatsoever related to trading. Some of his trade ideas have involved as broad a range as Natural Gas and Coal stocks, VIX spreads, S&P straddles, BIDU, CAD/AUD, and many commodities spreads and option trades.

He is also working on a new book, and may give us a preview of a few ideas from it.

A couple of our more experienced option trading members will further explain the approaches taken and how they vary them in the way they trade credit spreads, and we will have an open general discussion.

We have the full capacity of the combined meeting rooms, so please bring or send friends. Our meetings are free to all.

After the meeting ends at 8:30 pm, Dave W. is organizing an informal gathering at the nearby Cameron Bar and Grill, all welcome on their own tab.

For discussion of this talk prior to the meeting, I have started http://www.meetup.com/rdutraders/messages/boards/thread/23163002/ .

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