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Market Neutral Spreads

As traders, we are always excited when our option trading system or program produces a winning trade. But this poses a dilemma. Do you hold a winning call option trade for further upside profit potential or do you take profits in case the stock or ETF declines in price with the possibility of a profitable option trade turning into a loss.

I’m sure most of us have closed out a winning trade only to see the underlying stock or ETF continue to rally knowing that we left profits on the table. We also know from experience that it is very difficult to watch a winning trade develop into a losing trade. This is very hard on your psyche as a trader and can help you lose confidence in your ability to be a successful trader.

In this video, we will learn how to solve this dilemma with techniques for protecting profits and at the same time participating in any further upside profit potential.

This technique is simple to implement and once it is in place you can forget about the trade. No need to monitor the markets or world events. Bad earnings reports don’t matter. A severe selloff in the underlying stock or ETF actually produces more profits with this technique. You can place the trade and take a vacation!

We will look at an actual Market Neutral Spread for the Dividend ETF that will profit regardless of the price movement of the Dividend ETF. The analysis below reveals that if the Dividend ETF remains flat at option expiration a $778 profit and 134.1% return will be realized (circled). A 20% increase in the ETF results in a 449% return (circled) and a 40% decline in the ETF results in a 469% return (circled).


High Accuracy Trading Produces $4.4 Million in Actual Trading Profits

Over the past four years we have experienced a global financial meltdown, severe recession and bear market, high unemployment, increased market volatility and an uncertain economy. This financial turmoil has made it very difficult for the average investor to realize a consistent return on investment.

$1,044,065.26 in Actual Trading Profits with No Losing Trades

Trading options can be challenging due to the sheer number of options being traded. For example, if you decide to trade a BIDU option there are over 750 BIDU options to choose from. How can you effectively select an option with good profit potential with so many choices?

In this video we will discuss a simple 3-Step trade selection process that can lead to high accuracy option trading. Discover how I made $1,044,065.26 in actual profits with no losing trades using this option selection process.

$932,415.16 in Actual Profits with 98% Winners

Despite the daily volatility, the broad based S&P 500 Index has been virtually unchanged over the past ten months making it difficult to profit from long or short trades. The S&P 500 price chart below indicates there is no clear market trend despite the wide price swings. But my trend following systems have been performing well despite the difficult market conditions producing $932,415.16 in actual profits with 98% winning trades.

Traders need more than a simple trend following system to profit in today’s volatile markets. Trader's need additional tools to filter trades and discover stocks with the best profit opportunities. In this video we will discuss a simple 4-step trade selection process that can lead to high accuracy trade selection during any type of market condition.

Chart I

Futures trading involves high risks with the potential for substantial losses. Hypothetical performance results have many inherent limitations, some of which are described as follows. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. there are numerous other factors related to the markets related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. Option and stock investing involves risk and is not suitable for all investors. Only invest money you can afford to lose in stocks and options. Past performance does not guarantee future results. The Chuck Hughes Inner Circle Advisory trade record does not represent actual investment results. Trade examples are simulated and have certain limitations. Simulated results do not represent actual trading. Since the trades have not been executed, the results may have under or over compensated for the impact, if any, of certain market factors such as lack of liquidity. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.