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Cooking Up Something New
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Cooking Up Something New

by The MoleMarch 30, 2016

Scanning through yesterday’s comment section once again confirmed a gnawing suspicion of mine which I had developed over the past year or so: The majority of the people who visit here and even most of the hardcore steel rats who religiously have followed this blog for many years do not partake in the setups that are being posted. Clearly there are exceptions, but if I took a raise of hands today I’m certain that I could count on a single hand the ones who took yesterday’s EUR campaign or any of the juicy futures setups (e.g. ZB, ZM, or ZC).

Now true to my nefarious online persona I often have responded a bit snarky to what I perceived a tragic oversight on the part of my audience. After all I have now made it very easy to follow all live campaigns in the ‘current campaigns’ widget you see in the right sidebar. It allows you to follow all entries as well as the ensuing campaign management nearly live (there’s a 5-min interval refresh) any time of the day or night. Nevertheless participation in discretionary campaigns has remained pretty flat which is also reflected by the fact that I see are very few pertinent comments on a daily basis.

You probably remember the old saying: You can lead a horse to water but you can’t make it drink. And there’s a lot of truth to that. Because clearly many of you active traders and the symbols I keep seeing posted in the comment sections are mostly ETF or stock related. Although I report on stock index futures and their underlying cash indices almost every day I have never traded stocks and I probably never will. There are many reasons for that – mainly I don’t enjoy not being able to participate 24×5 – and being limited to a 7.5 hour NYSE session doesn’t really work for me. Also, there are just too many gaps on anything but the most liquid symbols. Trading on that level means shifting to a completely different timeframe/approach which just isn’t my cup of tea. Finally, I do enjoy a bit of leverage and I don’t want to deploy large amounts of my assets to one symbol.

Which is probably why I always very much enjoyed trading stock options. As a matter of fact back in the Wild West days of Evil Speculator (ca. 2008-2011) I posted option setups and tutorials on various strategies all the time. And perhaps not so coincidentally traffic and participation was hopping on a daily basis back then. People were posting symbols galore and there was a lot of debate about the greeks, about volatility, earning season, theta burn, vega crush, and what have you. Fact is that retail traders love their stocks, but they love trading stock and index options even more. It’s a huge market and suffice to say that the majority of them are losing their proverbial asses over the long term.

So this got me thinking. Apparently the number of traders who trade futures and forex seems to be limited, in particular in light of more stringent regulations over the past few years. So why not bring back some of that old mojo and once again post option related setups as well as related technical analysis? It is an idea I started mentioning to one of our affiliates recently. He used to be a professional options trader and actually started to get pretty excited about participating in some sort of option related trading program here at Evil Speculator. Obviously some of you guys could benefit from a wide range of option related tutorials but the best way to learn is by doing (with very small position sizing at first of course).

Introducing Jay

You may be wondering who this mysterious option pro is and I asked Jay to put together a quick intro:
Jay has 20 years of options and trading experience.  He got his start in the Wheat Pit at the Kansas City Board of Trade before moving to Chicago to become a market maker in stock equity options on the floor of the CBOE.  After doing a stint on Wall Street consulting with trading firms on how to implement options trading software, Jay moved to Arizona to pursue his MBA.  In Arizona, he worked for a hedge fund of funds where he was responsible for analyzing investment strategies as well as running the fund’s own options hedging portfolio.  After the financial crisis shook up the hedge fund industry, Jay moved into the online investment research business. He’s been publishing online research and trading strategies for six years.  Jay has successfully managed multiple options trading services for hundreds of subscribers during that time.
What both Jay and I share is a strong expertise on the flow of volatility and its impact on option premiums.  We both have studied the dynamics of volatility in exhausting detail detail and clearly there is abundant opportunity to capitalize off this knowledge in the options markets. So moving forward don’t be surprised if you see Jay pop by here occasionally to post a few setups or participate in producing educational material to turn you guys into stone cold option traders. Who knows – if it catches we may decide to take it all the way and launch a pertinent service. But I didn’t want to put the cart before the horse and first gather some feedback from my readers. Let me/us know what you think and what you feel would benefit you the most.

About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
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