Today, I’m here to tell you about Maximum Safety and Maximum Reward option trading. These strategies have been the motto of the San Jose Options mentoring program for a while now. Let’s talk about where this amazing concept came from.

Well sadly enough, this expression came from having some rather horrible experiences trading options when I first got started. Similar to other option traders, I began with iron condors, calendar spreads, at the money butterflies, and even though I learned about them, I never really traded credit spreads. Once I saw the risk graph on those, I realized how risky they really were.

Anyway, after trading the traditional option spreads that have been around for decades, I came to realize that I had to find a safer way to trade. I had several winning months, but they were always followed by one catastrophic day. Thousands of dollars that I made always seem to find a way down the tube by one single large move on the market.

This is when I began to think seriously about option trading. I thought there must be a better way to trade options than these traditional strategies. I realized that I would never get anywhere if I continued to experience large losses on my trading account. Several small wins followed by one large loss adds up to nothing.

Maximum Safety, Maximum Reward option trading took birth in my mind years ago. I began testing all of the ideas I could possibly think of. I’ve been doing this for several years now, and I don’t plan to stop anytime soon. What I’ve come to realize is that I need to maximize the Greek called Theta, while minimizing Gamma and Vega. Once I achieved this, then I will have what I am looking for.

Things have been going very well for us and we’ve made some impressive leaps over the last few months. Today we compared a strategy we call “the revolver” to the traditional iron condor. Our strategy got the same amount of Theta as the condor, but the Vega and Gamma were much lower. Even though they had the same Theta on the trade, the iron condor would bring about an $8,000 loss on a 10% move to the upside, while the revolver will only experience a $200 loss from a similar move. In the end, our strategy outperforms the iron condor and is proving itself to be twice as safe if not more.

To conclude I would just like to say that if you really want to find success through trading options, then you really need to focus on Maximum Safety and Maximum Reward. Again, this means that you’ll need to maximize your Theta while minimizing Gamma and Vega. I hope you have found this article to be informative and helpful. Good luck on your option trading, and until next time, have a great day!

Put Max Safety, Max Reward Option Strategies to work for you! Visit the pioneers of constructing low-risk option spreads at San Jose Options mentoring.