RadioActiveTrading Blog

In today’s issue, the single most important piece of your trading puzzle: RISK MANAGEMENT.

I’m going to take a moment to talk to you about a RadioActive Trading term, BULLETPROOFING - that is, taking a stock and option structure and converting it from low risk to NO risk… and why it’s important in this market to be familiar with how exactly to do that.

As you may know, I trade two accounts: Fission’ R3, which stands for Real Time, Real Money, RadioActive - and the Plain Vanilla portfolio. (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!

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…)

It appears AAPL has been moving up nicely, and I think that virtually selling the September 175 call to reduce the theoretical risk on this RPM…remember, for the Plain Vanilla portfolio we are only applying Income Method #1 to show some examples of how the the RadioActive Trading method works. (more…)

As you may have heard, Disney is buying Marvel for a good chunk of change. In the Fission account, we closed our ‘Bulletproof from the Beginning’ MVL position for a strong profit…I liquidated the stock but am still holding the put just in case of a small pull back.

For all of you following the Plain Vanilla, virtual trading positions, we are simply going to liquidate the MVL virtual trade.

Selling to close MVL at $47.75 and selling to close our January 2010 40 put for $0.70. This means we are getting $48.45 back. The initial investment was only $42.16, so we take in a virtual profit of $6.29, or roughly 15%.

Look for other possible moves in the Plain Vanilla virtual trading portfolio in the near future.

Just added an Income Method #1 to the LFC Plain Vanilla trade. This will reduce the risk of this paper traade somewhat but still leave some room for extra profits.

Remember, these trades are not recommendations or suggestions of what you should be trading, we just want to show the RadioActive principles in practice and how they can work in any market. I only use real money in my Fission Trades, where I apply all 9 Income Methods to my limited risk RPM’s.

Okay gang, let’s see how this trade pans out through August expiration.

By selling this call we have essentially bulletproofed the AAP virtual trading position. We still have about a total of $12 at risk on the position if AAP has a massive decline by August, or about $0.04 per share…but, if that was the case we would still have time value remaining in our long put option. What does that mean…Hey! We’re basically Bulletproof on the virtual AAP trade!

Keep an eye out on Thursday for other possible IM #1 trades in the Plain Vanilla virtual trading account!

I had Mike Chupka use a different tool on PowerOptions during our presentation this afternoon…in addition to having him show us the powerful search capability of the patented PowerOptions Search tool, I had Mike open up the Search By Symbol tool in the Married Put strategy to find a good position on GME. (more…)

I recently Bulletproofed MVL in the Fission Portfolio, and then I saw it on the PowerOptions search results during our presentation, and figured this would be a good fit for the Plain Vanilla virtual paper trading portfolio. (more…)