When it comes to trading, I bet you can imagine how good win streaks feel.
Last week, I went on a pretty wild win streak and won on all of my Weekly Windfalls trades*.
Now, I’m not saying my win rate is 100% every week because, to be honest, that’s just not possible in my opinion.
However, I do utilize a strategy that can help me stack the odds to my favor… and continue to win.
How does it work?
In this environment, there are so many “suckers” in the market… and there is actually a risk-defined strategy out there to take advantage of them.
How does it work?
I like to think of my strategy similar to insurance companies. Think about it like this, these companies are selling insurance policies to people, but the odds of something bad happening are pretty slim.
I mean think of home insurance.
People buy insurance because they need it, and every year they pay a premium just in case something happens.
That’s very similar to how it works with options, more specifically out of the money options.
However, I wouldn’t say insurance buyers are suckers because it’s necessary…
But with buying deep out of the money options, it’s a gamble to me.
Let me show you what I mean by that.
Take a look at what comes across my scanner each day.
If you look at the orange highlight, you’ll notice there is a figure that shows % Chance OTM.
This gives traders an idea of the likelihood of the chance of that specific options contract expiring worthless.
Take a look at some of these percentages…
You’ll notice there is more than a 70% chance these options expire worthless… sometimes, you’ll find ones with a 90%+ chance of expiring out of the money (OTM).
I don’t know about you, but who is really placing a bet on an options contract with little time to expiration with a low chance of succeeding?
To me, the “suckers” or amateurs.
Of course, you probably know selling options outright can be dangerous.
That’s why I don’t do that.
For example, if I want to establish a bullish position on a stock, I can take advantage of the “suckers bet” and gain if:
- The stock explodes higher
- The stock stays in range
- The stock falls a little
It works similarly if I’m bearish on a stock.
If you want to learn what it’s all about, then you’ll want to check out my latest eBook.
You’ll learn my number 1 edge in the market and how I take advantage of the “suckers” in the market.