Do You Like Trading Options? Check out our New BETA Strategy…

If you like trading options, then you might want to watch the SP 1500 Daily Strategy Scans for this Strategy closely each and every day.  As the video below talks about, this Strategy can be used to trade straight-up stocks, but it was in fact designed to also trade options. 

Option trades can be constructed based on the Daily signals.  For example, in a strong market in the money call options can be traded.  Or put credit spreads can be used.  Once you understand how the Strategy works, a number of different options trades can be used and constructed based on other factors like market strength, underlying volatility (and relative volatility) of the stock, etc. on a semi-discretionary basis, using the Strategy Scan signals and setup as a starting point.

Keep in mind that when trading options there are other things to consider, such as, well, is the underlying stock even optionable?  If so, are the options available active enough and do the options have good liquidity?  What is the underlying volatility?  What is the relative volatility?  As those that trade options know, there are other considerations when constructing an options trade.

One thing that we really like about this Strategy is that it worked well when tested against a number of different Universes.  It tested reasonably well against the Nasdaq 100, but even better against the SP 500, SP 1500, Russell 1000, Russell 2000 and Russell 3000.  Because of this, we decided to offer it for both the SP 1500 (since it comprises the SP 500 and has a number of stocks with liquid options), and Russell 3000 (since it comprises both the Russell 1000 and Russell 2000) in order to offer numerous opportunities in stocks with different "personalities".

Of course both of these Strategies (for the SP 1500 and the Russell 3000) can be traded as straight up stock positions.  For that, our backtesting (here and here) suggested running a portfolio of 20 stocks for each Strategy implementation. 

Our implementation method of choice for trading stocks is using Alera Portfolio Manager (APM) to easily manage the daily entries and exits, whether on a semi or fully automated basis.  (If you want to know how, check out Video #2 here).

The Strategy Signals (Strategy Scans) will be available in the Free Strategy section while it remains in BETA testing, after which it will be moved over to our Pro Strategy Member's Only area. 

(Speaking of which, try out our full service and strategies with a no-risk 2-week trial of the Systematic Investing Game Plan membership today for only $14.99 using Coupon Code:  secret15)

Let's jump into the video explanation...