Paycheck - Module 5 - VectorVest1 Disclaimer The VectorVest Program (“the System”) which...
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Transcript of Paycheck - Module 5 - VectorVest1 Disclaimer The VectorVest Program (“the System”) which...
1
Disclaimer
The VectorVest Program (“the System”) which we promote is not intended to provide you with specific or personalized advice. In all circumstances where you are looking to apply the System to your own personal needs you should consider whether you should first seek advice from a suitably qualified investment professional.
Figures and information provided refer to the past and past performance and are not a reliable indicator of future results. Where stocks are quoted in foreign currencies, returns may increase or decrease as a result of currency fluctuations. In the event that you, as a recipient of this presentation, have any doubts as to the suitability of the investments or services promoted you should seek advice from a suitably qualified investment professional.
You should be aware that the value of shares and other stocks may rise or fall. The rules on tax can change, and these changes may have an influence on the effectiveness of the System in the future. It is for you, as the tax payer, to assess the System’s effectiveness throughout the process. Some assets are more readily realizable than others, and you should bear in mind that it may be difficult to deal in or obtain reliable information about their value. You should always take account of dealing charges. In addition to any initial charge quoted there may also be a bid/offer spread or dilution. Investments in options and other forms of derivatives may expose you to a higher degree of risk given market circumstances relative to other forms of quoted investments.
The System even if used in its entirety, cannot be guaranteed to provide specific returns in the short, medium or long term and you should bear in mind that individual securities may and can fluctuate considerably in value from day to day. The System has been designed without any reference to the specific interests of a particular investor. We reiterate, when using the System, you must take into account your own specific needs and liabilities.
This financial promotion has been approved by European Financial Publishing Ltd trading as VectorVest UK which is authorized and regulated by the Financial Services Authority under Register No 543038. European Financial Publishing Limited is a company incorporated in Scotland under Company Number SC357322 with its registered address at Exchange Tower, 19 Canning Street, Edinburgh EH3 8EH.
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Trade Set-Up
Maximizer
➢Module 4 Review
➢4 Key Principles
➢Big Mistake To Avoid
➢Action Items To Take
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Trade Set-Up
Maximizer
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Multiple Graphs To Look At
Don’t Get Paid Enough
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Key Principles
To Get Paid Top $$
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Remember
this from
Module 1?
Use the Over/Under Priced
Indicator as your guide to cheap
vs. expensive Option Premium
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Focus your trading on areas where
Volatility is likely to decline.
When Volatility rises, an expensive
option becomes even more
expensive & can kill your trade!
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Let’s look at 4 Scenarios of Selling a Put
on Tesla to better understand how Price
& Volatility can affect the option price.
This models selling the 180
Put on TSLA on May 10.
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Scenario #1:Stock rises.
Volatility stays flat.
Result:You hit 50% profits in 8 days!
Scenario #2:Stock stays flat
Volatility stays flat.
Result:You hit 50% profits in 15 days.
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Scenario #3:Stock rises.
Volatility rises.
Result:You hit 50% profits but in
16 days!
Scenario #4:Stock stays flat.
Volatility rises.
Result:You hit 50% profits but in
25 days!
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16 days 8 days
25 days 15 days
Stock
Rises
Stock
Flat
Volatility Rises Volatility Flat
Focus your trades to where the
options are the most overpriced
or have the lowest chance to
have an increase in volatility.
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And not here…
Because sometimes
seven days can be the
difference between a
gain and a loss!
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Case Study #1
Date: 4/13
Stock: TSLA
Trade: Bull Put
Volatility: Overpriced BUT…
Options are overpriced but
below the average highs.
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Choose a 235 / 225 Spread
Based on the 30% ITM criteria.
Profit target = $140 per contract
(50% of the $280 credit)
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The most you were ever up was
$38, not enough to take profits.
What if you had waited
until Volatility was closer
to the average highs?
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Case Study #2
Date: 4/22 (9 days later)
Stock: TSLA
Trade: Bull Put
Volatility: Overpriced & near
avg highs
Choose a 237.50 / 227.50 Spread
Based on the 30% ITM criteria.
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Profit target = $207 per contract
(50% of the $414 credit)
Profit hit, a few
days later…
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And seven days later?
Big Loss…
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The recurring theme of the Paycheck
concept is to limit market exposure, because as we saw…
A lot can happen in 7 Days.
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VV Search
Matrix
The Matrix is a powerful option scanner that c
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Starting with the UniSearch we scan
for Premier Growth Stocks.
Press the
OptionsPro button to
transfer the results
to OptionsPro.
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Choose Bull Put Spread
Your UniSearch Results…
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Send them to
the Matrix…
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Click on the Scan
dropdown arrow:
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Under Advanced Scan select,
Stocks w/Overpriced Options
Results are listed in order based
on the highest difference between
Implied Volatility (IV) and Historic Volatility (HV)
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Right click on a symbol
& chart the results.
SCLN is overpriced, but
lower than historical highs…
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LUV is near the
highest historical levels
of volatility.
HA has a better chance of
volatility moving higher.
Not a good option to sell.
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ProTip:Don’t overlook stocks at the bottom.
They still can be near the top of the
volatility range!
The Matrix allows you to focus
quickly on the best stocks
with the highest volatility.
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VV Search
Matrix
Filter
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We have a large list of
Stocks w/ Overpriced
Options from the Scan
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Save this list as a
new Scan List
These are only the Overpriced
Options from the original Safe
and Sound scan.
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Set the Matrix to scan for
Option Symbols
Filter for the best
candidates to sell.
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Down to one stock, and
you now know the right
options to build a spread.
VV Search
Matrix
Filter
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If this is the result of your
searching, it’s not
necessarily bad.
It’s not about trading for trading sake.
You want the Right Trades, with the
Proper Option market conditions.
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