Afraid of market down moves? Not this trade! Many traders favor Delta neutral strategies over bullish verticals because they are afraid of a down move. And while it may be true that a Delta neutral position can handle a larger down move if that down move happens immediately, it is equally as true that later in the trade, after we get a substantial up move and the neutral position needs to be adjusted, that the bullish vertical can actually handle a much larger and faster down move. So, it’s not just a matter of whether the market goes up or down, it’s also a matter of timing. Observe how this trade experience a down move that would kill many market neutral strategies and still produced a substantial win! Click here or in the video below to take a look!
In this episode, the developer of the Bull trade, John Locke gives the complete rule set!
Description of this trade: The Bull is a stage 1 or beginner level options trading strategy. But don’t let the simplicity of the trade fool you because this trading strategy has a very impressive track record of averaging 20%* annual returns since 2002. With some years with returns as high as 65%*!
Returns of this trade: This trade earned about $1,840 profit or about 7%* of the planned capital in 28 days.
Minimum Capital Required: $2,750 per trade on the Russell 2000 (RUT) or $275 on IWM
Example size: $27,500 (10 lot)
Profit Target: None
Exit Loss Trigger: 9% or $250 per contract on the RUT and $25 per contract on the IWM
Entered Trade: The Wednesday that is closest to 65 DTE (Days To Expiration) – We will enter a 30 point wide bullish vertical on the Russell 2000 or RUT that gets a credit of more than $2.50 per contract or more.
Trade Duration: Approximately to 30 days
Trade Adjustments: None
Overlapping Trades: None
Why do we love this trading strategy? I love the simplicity of this trading strategy.
LEARN THIS TRADING STRATEGY!
Afraid of market down moves? Not this trade! The Bull is one of three simple trading strategies that is taught in the Fundamentals in Trading or FIT Library which is available to all GO and PRO members.
This rule-based strategy has a minimum capital requirement is $2,750 and takes about 5 minutes a day to manage (We also teach a version you can trade with as little as $275 in the FIT Library).** Click here to learn more!
FOLLOW THIS STRATEGY!
Become a GO or a PRO member to follow this trading strategy on the Options Trading for Income by the Guidelines weekly webinars. This trading strategy is for Trading Success Blueprint traders in Stage 1 and above to focus on.
Returns of this trade: This trade earned about $1,700 profit or about a 6% return on our planned capital of $27,500 in approximately 30 days.*
Returns of this trade: This trade earned about $1,700 profit or about a 6% return in about 30 days.*
*The result shown is from real-time, hypothetical trades such as those shown in the Options Trading for Income weekly webinar. Simulated trades are believed to be represented as accurately as possible, however, live results may have been different. The result is shared as an example for educational purposes ONLY.