Case Study of the Week
This case study is based on actual trades using the strategies taught by the team at Options Money Maker. Our focus is to teach traders a consistent and conservative approach to trading credit spreads, debit spreads and other combination spread strategies to earn higher than average returns.
We believe that there is no better manager of your money than you, armed with the education and experience to create great returns and do it with peace of mind. We also believe that there is no better way to learn than to “mimic the masters” and then actually do it yourself! These case studies are designed to be a supplement to your education and show you real examples of the trades we open, close and adjust while minimizing risk, eliminating fear and growing a big account.
It has been a chaotic first two weeks of the year in the stock market with a downward movement that has people wondering about the state of the economy. Is this just a temporary selloff, a short term reaction to news or the start of a major recession like we experienced in 2008 and beyond? How did your investments fair in the last major downturn. How will they fair if we have another market meltdown? Just this past week we experienced SPX moving 50 points at a time and NDX moving 100 points or more in a day. Do you know what to do to not only protect your assets in a volatile market but to actually benefit from the chaos? Our expert traders at Options Money Maker know how to make money regardless of market direction.
Case in point…our investors had Put Debit Spreads on SPX and NDX this week during a day that the SPX made a 50 point move down and the NDX made a 110 point move down. These were downward bias positions which meant that our investors were able to take advantage of the large and sudden move downward to close out for some very nice profits.
What happened next…?
There were a number of investors in our live trading room that had purchased and held long Put positions rather than a spread on SPX and NDX overnight. The value of Puts increase when an index decreases so these investors experienced some massive profits of several thousands of dollars in one day. This is not the norm, but it sure is great to experience a grand slam in the middle of a game where you are hitting singles, doubles and triples on a daily basis.
What Happened Next…?
The next task was for our investors to try to explain to their neighbors why they were so happy that the market had moved down today, while everyone else is watching and agonizing over the decreasing values of their 401K plans.
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