Hey, traders in the stock market. We are glad to be back on the channel. If this is your first visit here, I’m Karl, Karl with a “K.” I’ve been trading options and stocks on the internet since the beginning to the mid-1990s. If you’re here to find out more about trading or find out whether a stock or option course available offered on YouTube will be worth your price, ensure that you join the channel. In this video, I’ll share my personal opinion based on my experiences behind the paywall for David Jaffee’s top alert service for stock strategies.
For more in-depth details on how I personally adjusted my account for trading to be able to follow David Jaffee’s alert system, you can watch the video series “David Jaffee’s BestStockStrategy | Behind the Paywall Week One” and “David Jaffee’s BestStockStrategy | Behind the Paywall Week Two.”
While I followed David Jaffee’s BestStockStrategy alert service, I took the time to look over his free, $400-worth video training courses on the various options. The site has three main training videos as well as a collection of more than a hundred videos you can take a lesson with without cost. I decided to go through three of his training videos.
Video 1 is his options trading step-by-step instruction. It outlines his general approach covering the types of trades, sizing, execution, and timing. Video #2 was my favorite video since it shows his actual account P&L for the entire one-year time period. Video #3 was a great overview in describing the basics of selling options to premium. It offered interesting information regarding how stocks have market leadership, are, and how to narrow your scope to achieve success. David Jaffee’s perspective on trading market leaders and how it is incorporated into his method was a good read.
One of the key arguments he presented was that he follows very liquid underlines. I highly recommend this training. Following David Jaffee’s alert services for the past two weeks, my account had increased by over 4 percent. This translates to 48% in annualized returns. This is an extremely high return. In this article, I’ll first discuss my concerns about the service and then what I like about the service.
The huge returns involve the risk of. Because we’re selling options that are naked that are not covered by any protection against a substantial loss in the event that the market falls. In fact, I’m not worried about the risk of upside from selling naked calls because the volatility tends to decrease, which means calls decline in value, and the market doesn’t actually go up. Selling naked calls doesn’t present as great a chance of large losses. Selling naked puts comes with risk; however, with the method David does, he’s capable of reducing the risk for all four types of markets. I also explained the four types of markets and four premium sellers for options in my book, A Portfolio for All Markets. If you’re interested in reading my book, I’ve provided links to the book’s review below.
The main risk of the strategy is the very rare occasion when the market crashes. Since 2011, we’ve had three market crashes, in my view. The three crashes that occurred were on August 24, 2015, February 5, and February March 5, 2020, on a variety of days in which the market was capped down.
There are several strategies to limit the risk of a market crash employing this method. One strategy is to reduce exposure by limiting the size of trades, and the second is to employ horizontal spreads in place of naked shorts. If you decide to implement an approach that relies on naked shorts only, I will put it into an account that is separate from the rest, with 10 percent to 20% of my capital. I would not invest all my money in this strategy. If I had a tiny account and was willing to take the risk and try to increase my account to increase my capital, I would put all my money at risk and hope that the market would not fall until my capital had been increased to an amount. After my capital was increased, I’d split it and assign 10 20 to 10% to this method. Be aware that following an event of a crash, the risk of volatility is usually reduced, and this strategy can earn more quickly than normal. Therefore, this crush of volatility could give investors a chance to recover losses. And the best part is that I can reach David directly and receive an answer to my questions. I’ve reached out to David numerous times asking questions, and he’s responded within the shortest amount of time. The ability to connect with someone who offers a course or service is a great indication.
Another thing I’d like to highlight is that I’ve seen David Jaffee discuss decreasing his risk by using vertical spreads. I wrote him an email and asked him about this, and he replied that he is aware that tail risk can be dangerous in the case of training only naked options. In addition, he’s selling naked options since the VIX is too high, and he doesn’t intend to buy options if they’re costly, as they are in the current market. He also said that once the VIX drops below 20, the option will be to use horizontal credit spreads. Another thing he said is that despite being a directional trader, he often trades oversold and overbought conditions. At the moment, most of the time, he’s short, as his belief is that many stocks are being overextended.
He also said that he knows that naked short puts can be risky, particularly when the market has experienced massive gains. Also, the danger, as of now, is to the downside; therefore, he’s willing to buy puts on underlying are deemed to be excessively stretched.
Another thing I love regarding his service alerts is David Jaffee’s well-informed about this trading concept. I appreciate that he only decides to trade market leaders in order to aid in identifying surprise movements. The big moves that occur after getting into a trade are best to avoid using this method, and he is aware of how to reduce the risk of major changes after having established an account.
In the next article, I’ll explain how David Jaffee implements an organized plan in the event that investment goes against his interests. On June 30 30th, he made short calls on Tesla as the stock increased more than 50% since the time he opened the trade 10 days prior. This is how he dealt with it. This video will show you how David Jaffee reacts to a trade that went wrong. This is Tesla. The trade actually began on June 30 and was in the middle of this. You can observe that on July 10, July 10 exactly 10 days after, the Tesla stock was up by more than 50 percent in just 10 days.
So how did he manage this? First of all, the trader had Plan A, where he was in the market closer to the opening and then closed the position, as you can see, for dollar nine dollars. Then he sold the call, which was one with a 1480 number, which means it was higher than 1480 at around this point, but the call was sold back at the cost of a dollar. The plan was simply to take that dollar, possibly getting 50, and he was contemplating selling the call, and Plan A was to simply make money from the sale. However, he needed to switch toward Plan B. As you can see, the man shifted towards Plan B on the seventh day, and here is the result. Right here. This means that Tesla was up until here and started here, then went into Plan B hereafter, and Tesla increased by 35 percent. The Plan B, you see, was that he purchased back the call 1480 that he had sold. Then exchanged it for the 1520 call, so it was right here at 1480 just up here. He sold the call and later swapped it out for a call a bit higher. This increases the probability slightly. However, he also realizes that he used an expense to make. Therefore, he sold the 1200 put. 1200 was down in this area; let’s see. He sold a put at the same price of 1200. And the reason for doing this was that Plan B was to bring the credit. In the end, this trade brought an additional 32 cents, as you can observe. As he drew closer to expiration, the trade was put in on the 7th, but then the tenth day came around, and he reverted to plan C.
What is Plan C? You can see that Plan C occurred right at the close on the same day. He wanted to be sure that all extrinsic value was from the 1520 call, which he sold. There was no intrinsic value. When after he rearranged his position, he took an inverse. Then he purchased this 1520 call to end it. Then he sold an 1830 call and that he could go up the level at which he offered a call. This basically meant that he exchanged the call here and then, with a higher likelihood of a sale, and then sold it the price up to here. Because this call is due to expire in one more week left, and this one that was purchased will not expire until the end of the week, unlike the one that expires this morning. He was able to swap these two calls for a 72 cents credit. This is the way he’d added credit each time. Therefore plan A was able to bring credit, plan B brought credit, and Plan C resulted in credit, and he’s much safer. It’s a fairly high-risk scenario all the way to 1830. And there’s only one week to take.
It’s fascinating to see the way he trades when he’s in trouble. That’s the main thing you’ll want to know. What happens when he’s caught in trouble? What he’s been able to do so far is quite impressive from what I’ve observed. In other words, if you spot a move in the stock upwards by 50% in ten days after you’ve sold a call, you’re likely to be in some difficulties, but he’s managed to limit the risk and has been pretty successful with it.
The odds are yours. David Jaffee makes high-probability trading, which means the trades make money a large proportion of the time. If a position does go against him, he has plans A, plan B, and Plan C, which can force a position into a high-risk scenario. The chance for a position will suffer losses are very slim, and you can accumulate capital in a short time by using this strategy. What I love the most: David Jaffee discloses his actual P&L. He even started an account with a tiny amount of money to use this method. According to me, sharing P&L is the most prestigious degree of credibility. And as I stated in my channel’s purpose when I discover an individual I consider to be credible, I’ll say it, and this man is a credible source. In fact, I have contacted him to request an affiliate link since I’m recommending his free course and alert service. You can find the link below for the description. If you decide to sign up, I strongly recommend using an account with a paper-based trading system until you’ve got an understanding of trading with the system. The most common method of losing money is through execution mistakes, and these mistakes must be corrected prior to trading with real money.
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