RadioActiveTrading Blog

Q: Setting aside your income from seminars, selling the blueprint, subscriptions, martial arts, etc… Could you give all those up and just live off the profits you make from trading without sacrificing on your lifestyle?

You needn’t answer and if you do I certainly don’t expect figures. A ‘yes’ or ‘no’ would be completely fine.

You also might be interested in my motivation for asking such a question so in case you are I’ll tell you; (more…)

You do give up a small amount of upside by having a put in place, but it’s nothing like selling a covered call. For example, in October 2002 I got AMZN at $16.09 plus a Jan 2005 $20 put. IN the next thirteen months AMZN went over $63. Had I sold a covered call, I would not participate fully in that upside.

IN 2007 I got 200 shares of STP at $39.99. AFTER making them bulletproof by doing the Income Methods, I sold some in November at $60.85, and some in Jan 08 at $66.25. Those are high returns, I think… (more…)

Q: Just adding up your columns in the Fission track records has the stock only return indicating 343.4% while the RPM method incurring 681 transactions returned 275.3%. Again, in the Ernie@PowerOpt Portfolio, stock alone returned 131% while the RPM method incurring 113 transactions returned 63%. Seems to me the stock only would be the way to go, higher returns, less transactions, etc.?

A: In a perfect Bullish world, where the market always goes up and we did not have to worry about downside losses, owning the stock straight out might always be the better trade. (more…)

Okay, so I’m going make a few enemies with the answer to this one.

There are a NUMBER of self-appointed “gurus” out there that will tell you that it’s possible to to set up a reliable, like-clockwork investment plan for income by buying stocks and selling covered calls against them. Many of these gurus imply or even outright guarantee a 3-6% per month “income stream” from such investments.
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Here is an email dialogue I had with someone regarding the EQUIVALENCE of married puts and long calls…

Kurt Frankenberg Writes:

I recently got a letter from one of our valued subscribers in India.

He saw the RadioActive Trading materials and perhaps got some input elsewhere. He wrote to me about the similarity between a long call and a married put.

Today I’ll be dispelling the confusion between the two. Contrary to the rantings of more than a few pundits, there are SEVERAL advantages that can be gained by trading married puts (stock that you own, PLUS a put option for protection) versus buying a long call. (more…)

You’ve happened across the very principle that makes RadioActive Trading adjust to the markets to tell you how many contracts to trade and how far out. Ready for this?

The simple truth is that depending on the market type, the further-out puts are more or less expensive. Essentially what you are paying for with an option is certainty in the face of uncertainty… that is, that you may buy or sell at a certain, locked-in price at some point in the future. (more…)

There she goes! As I wrote before, it’s hard to do SUPER well when you’ve got a one-trick pony… AAPL returned an okay amount in this virtual trade, but not near as well as it would have done if we were actually using ALL TEN Income Methods.

Selling covered calls is okay, but Income Method #3, #4, or #6 could have done a lot better… guaranteeing a return NOW but leaving the upside open in case the price develops even more.

If you haven’t gotten The Blueprint, consider doing that today! Come to one of our free RT Methodology Webinars held each Tuesday and Thursday.

Well, the virtual protective put for the AAP Plain Vanilla position expired this month. Rather than attempt to maneuver the put for further protection, we will just let this virtual trade close out by exercising the put and selling to close the shares at $45.00.

After a few Income Method #1 positions the virtual risk on the position was reduced down to 0.1%. This just shows how we could have reduced the risk on the AAP trade to a very minimal amount with only using one Income Method…imagine what could have been done if this was a real Fission trade and we could have applied nine other Income Methods!

Look for more information on the Fission and Plain Vanilla trades in the Weekend Update that will soon be posted!

I started trading RadioActively in 2002. My account was only $2,500 at the time.

Having said that, more is better. This is because it’s ideal to risk only 1% of one’s total capital in any one trade.

So, if you have $10k then it would be better to allocate $2k each to trades with 5% risk each. That would make your TOTAL risk 5% because 5% of $2k is $100 of risk in THAT particular trade… when you have five positions like that, that’s $500 of your $10k AT RISK. Thus, you have only 1% of your total capital exposed to loss in any one trade.

During Today’s webinar Mike Chupka was able to use the PowerOptions Portfolio tools to quickly analyze some potential Income Method #1 trades for our virtual Plain Vanilla account. Using the powerful tools we quickly analyzed the pros and cons of virtually applying Income Method #1 to a few positions, but decided that Ross Stores had the best opportunity. (more…)