When I acquired the domain name www.2fold.com in 1999, it had never been registered. I quickly bought it for $10 and have owned it ever since; some 26 years now. I’ve had dozens of lucrative offers for this very popular domain name & often-used phrase and 2fold.com is still for sale as I’m holding out for a strong six-figure offer. In the interim, I use 2fold.com for my options blog as it mirrors my options mission statement; to grow my investments 2fold also meaning to double my investments annually. Those of you who know the rule of 72 understand why and the rest of you please learn and memorize this financial rule as you’ll use it often when creating investment strategies.
As an amateur options trader, I give myself a small allowance every month for options trades. Next, I bank 50% of any large (4-figure or more) wins which my genius brother encouraged me to do. Finally, I then allow myself to reinvest or as some might call it re-gamble the balance of wins on additional trades.
Individual equity put and call option trades are a difficult way to make money. In my case as what I’ll call an intermediate amateur options trader, my single equity win-rate is only 15%, therefore I loose money 8.5 times out of 10 attempts. Nevertheless, I have inconsistently won big and have scored several 12-fold wins, two 40-fold wins and my best win so far was a 61.8-fold gain; all with technology equity options, multiple times with Tesla.
For more consistent wins, my favorite market segment when trading options is the VIX S&P 500 Volatility Index. Further, focusing on a trading range is the best way to assure success when trading the VIX. My current trading range is when the VIX index is between 16 and 21. The graph below illustrates how, over the course of a year, one can systematically buy and sell options on this index option for a very successful track record.
Precisely, my current win rate over the past five years when trading options on the VIX is 73.33%. Further, when I do win, I more than double my money on average growing my initial investment by 103%.
RISK – Trading options may result in potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the options markets. Do NOT trade with money you can’t afford to lose.
