Hey Traders!
So the newest addition to the Fission’ subscription stable of winners: EBAY.
Back in 2002, I invented a new “Income Method” for trading a married put and used it on EBAY. I don’t know if or when I may be using that particular adjustment again… but EBAY has a special place in my heart.
TODAY, at about 1350 (1:50pm) Eastern Time, I recorded a NEW RadioActive Profit Machine that went like this:
| EBAY | eBay Inc. | Buy to Open | 500 | @ | $31.70 |
| EBAY 2011 OCT 34.00 PUT | Buy to Open | 5 | @ | $4.25 | |
| Bought shares of EBAY | $31.70 | |
| BTO Oct 2011 34 Put | +$4.25 | |
| Total Investment | $35.95 | |
| Guaranteed Return | -$34.00 | |
| Total amount AT RISK | $1.95 | or 5.4% |
So now, clear out to October, this setup guarantees me that I can get back all but $1.95 per share of my initial outlay, or 5.4% of the total amount invested.
This is scalable of course… One could pick up 100 shares and one put option, or 300 shares with 3 puts… in the setup above I am showing 500 shares with 5 puts. Either way, the percentages work out to the same: 5.4% of the capital in the trade is AT RISK, no more or less.
Can you imagine trying to trade EBAY with a 5.4% STOP order? I can’t. Haven’t used stop orders in about ten years… so I can actually nap through ‘flash crashes’, opening gaps, disaster news on the telly.
Well, Traders, I don’t know what will become of EBAY over the next few months…
(BTW, in no way should my recording of the trade be construed as a recommendation to buy or sell EBAY or anything else ~ I am simply demonstrating HOW I trade when I do: with a put option in place to keep me out of trouble)
…but I DO know this: EBAY can crash and burn and I will be out of it, probably long before I lose even the full 5.4%. OR..! EBAY can go up and I will be in the green.
There are as many as TEN adjustments that I’ll make to the position, after it makes a move; I may take income, reduce the already small risk, or BOTH with these “Income Method” adjustments. But seeing as I don’t know the future, I can’t tell you just now what those will be.
Care to track EBAY with me? Thought so. I’m eager to see what happens next.
Happy Trading,
Kurt
I'm Kurt Frankenberg, and I have discovered how to truly put the odds on the side on the individual investor.
Where and how can I follow the ebay trade?
Thanks, Mac Rupp
Mac:
All of the trades that Kurt picks in the Fission service are available to the Fission subscribers on the radioactivetrading.com web site.
If you are NOT currently a Fission subscriber, you can become one anytime. Buyers of The Blueprint get to try Fission’ out for only $10 for their first month.
So, just logon to your account on radioactivetrading.com and buy The Blueprint. OR..! If you already OWN The Blueprint you will see the link under products to subscribe to Fission’ for $10 the first month.
Does the Blueprint tell how to use all the adjustment strategies?
Yup! The Blueprint is a full-blown, 250 page + book that details how to begin with very little risk, then how ten different ‘nested’ plays may be used~ individually or in conjunction with each other~ to reduce risk, take income, guarantee a higher return, or all three. The adjustments are called “Income Methods” because most are done at a credit.
Kurt
all of the adjustments i see so far are made to a position where the stock has moved in the right direction or in a sideways channel. please post examples where adjustments were made to a runaway position going against you. thanks.
Hi Kurt,
I’m new to RAT – have had BLUEPRINT about a month. You did a good job of explaining everything. I just opened a live trade emulating your EBAY. My stats – 200 Sh @ 30.76, 2 Oct 34Put @ 4.40 for Risk of 1.16. Will follow this trade. Thanks for a good product. William
Thanks William! As always, you have unlimited support for your Blueprint. SO feel free to pose questions. I have a few to address to you:
What is your CEGA? C = Conditions, E= Expectations, G= Goals, A= Actions planned, according to the catastrophe report.
I got SOME of the Conditions: your entry price for EBAY and the puts, the total amount AT RISK. Here’s a poser: How much of your capital is set aside for trading RadioActively? If it’s $10,000 then this trade risks close to 1-2% of your capital, a very good allotment. If your capital is $50K- $100K you might maybe think of taking larger positions so that when you are right it actually makes a difference to your bottom line 😉
OTOH, if you have only $3500 to trade with and are using margin… then shame on you for taking too large a position, risking $2.32 PLUS paying interest when all you have is $3500 to trade with… that puts 7% of your whole nest egg or so AT RISK in just this one trade! It would be better to Remember that “size does matter” when it comes to trading.
That said, I’m sure you probably are being conservative. It’s just that these things do make a difference. What is your Expectation in both the near and far term? When will you bail if things arr going against you? Is your Goal to grow your account or to take income from it? Do you fully understand the Income Methods, or do you need some tutoring?
Thanks again for sharing William. I hope that EBAY turns out according to your Goals. Feel free to write me at support at radioactivetrading dot com.
Happy Trading,
Kurt
Thanks, Kurt. Good comments. Capital 9k, risk 2.6%. Actions planned – income methods if EBAY moves up (prefer to move P up to capture time premium, sell higher Call). Expect EBAY will move up to 38-40. If it hits 40 will close. If it languishes for a month will close. Margin? No, never.
Thanks,
William