While Credit Spreads and Iron Condors are good trades, we don’t teach them in our Income Course. We trade the Russell Cash Index options. We create a multi-legged, complex position that is very adjustable. We want to make money from the way we manage the trade and not from what or when we trade. We trade the front-month options only to avoid the calendar implied volatility risk. Our position is always a limited margin, limited risk trade. Because of this, you can make our trade in your IRA account. There is no need to constantly search to find the optimum opportunity. We just put our trade on at a certain time in the expiration cycle and adjust the trade as the market develops. We initially take in a big credit. Time decay is a wonderful thing. We then use a mechanical adjustment approach to manage the trade as the market moves. Once we hit our profit target of 5%, we close the trade.
There are three reasons why our trade produces such consistent profits. 1) The initial trade structure is chosen for its ability to be easily adjusted. 2) We go into the trade planning to adjust instead hoping and praying that the market behaves the way we want it to. 3) We have a profit target that is a small portion of a larger available profit. This makes it easier to hit our profit objective.
The course is delivered via online videos. The course has three main sections. 1) Options Theory – We lay the groundwork for why I trade the way that we do. 2) The Rules – We outline the easy to follow rules that make the trade so successful. 3) 48 Monthly Trading Videos – This is the real value in the course. We show how the profit is achieved by walking through each trade day by day using real data from the past. After you watch each of these monthly trading videos, you will have confidence that the strategy works in many different market conditions and you will have the confidence that you need to start placing your own trades.
We use SmartLevels to adjust our trade. The SmartLevels give us a real edge in deciding when to adjust our trade. This keeps us out of random market behavior and keeps us engaged at important inflection points in the market.