Would you like to learn a strategy with an overwhelming likelihood of success that involves selling options around reliable turning points and potent support and resistance areas?
At Master Trader, we use an objective, rule-based approach to trading stocks, futures, cryptocurrencies, options, and selling options, particularly when volatility spikes.
Our Advisory Swing and Options Letter focuses on identifying high-probability long and short trades in stocks and options using Master Trader Strategies (MTS).
One of our favorite income strategies? Selling options and credit spreads — profiting from time decay and volatility contraction (a powerful edge many traders overlook) – around technical turning points using support and resistance.
Read about the Weekly Options Trader letter, which sells options/spreads for weekly Income that expire in 10 days or less around Master Trader technical turning points, CLICK HERE.
Last week, we were four for four in trades recommended in this letter (a slow holiday week and whippy price action), bringing the three-week total to 25 for 26!
Get a FREE month of the Weekly Options Trader letter and profit and learn this strategy now, CLICK HERE.
Let's see how we applied this put-selling strategy to a bullish breakout trade on SFM, which delivered easy profits while the markets whipped around.
Real Trade - Breakout from a Bullish Trading Range
Setup: After breaking down in February, SFM traded in a trading range with the 50-MA (an institutional favorite) flattening out.
On4/7, it had a bearish gap down, as shown, and snapped back, filling the gap and closing bullish.
It then gapped up but closed with a bearish Wide Range Bar (WRB) and bearish price action.
The following bar negated the WRB and closed with a bullish Wide Range Bar (+WRB), which was bullish price action! We call this a Master Trader bullish +180 reversal (+180).
Does that mean it is time to buy? No, we need a bullish setup.
Then SFM had two bullish inside bars, closing in the upper 40% of the +WRB. We call this a Master Trader bullish +123 Continuation (+123).
Because of this bullish consolidation and +123 close, and the Price Void above (i.e., insignificant resistance to the left), a breakout suggested higher prices.
The bullish entry (for stock or options trades) was over the high of this +123 Setup with a protective stop under the low of the +WRB.
We recommended selling put options under support as an Income Trade.
Multiple Time Frame (MTF) Alignment: Although not shown, the weekly and monthly charts were bullish for the breakout swing trade, helping to ensure a high probability of success for the issue moving higher.
The patterns using Master Trader Strategies (MTS) are very high-probability setups. Learn how to use MTS to time your entries to profit from selling options with charts with incredible accuracy. To learn our technical approach to trading anything that moves, CLICK HERE.
Trade Execution and Additional Analysis
After entry, we are always in management mode, trailing pivot lows and monitoring price action with bar-by-bar analysis. Management of short options and credit spreads is somewhat different since we are monitoring to ensure the short strike sold is not violated.
Profit: As you can see, the trade made a $225 profit (2.7% return) in an easy-to-manage 4-day swing trade. Had you sold 10 put contracts (representing 1000 shares of the underlying) and followed our trade management, you would have made a $750 profit (or the full $1,000 premium received if you did nothing and let it expire worthless, which it did).
Master Trader Strategies (MTS): Learn our proven methods for high-probability trades in all market conditions!
We sell options/spreads around technical turning points and literally “get paid” to determine where a stock will not go in a short amount of time.
Here are some of the bullish patterns that are candidates to sell puts and put spreads for weekly income:
Traders should add this strategy to their trading arsenal since the odds of profit – particularly after market mini-crashes -- are overwhelming high when they set up, like now.
Master these strategies and achieve consistent trading education and success.
Management updates are sent intra-day by text message to subscribers.
All open and closed trades are documented in the subscriber member area. Intra-day, updates are texted to subscribers.
Money Management for Trading and Investing
Proper money management for investing and Trading starts with position-sizing based on the amount of money you are willing to risk on a signal trade.
