Time Warp Trading Strategy

Time Warp Trading Strategy
”The Fastest and Safest Way to Grow Your Account”

The Time Warp Trading Strategy is Designed to Take Advantage and Exploit the Greatest Asset a Trader Has Available. It is the One Thing in Trading that Never Changes and Everything About This Strategy is Built on This Foundation. The Passage of Time

There Are Many Ways to Apply the Time Warp Strategy and Today I am Going to Reveal 2 Different Variations, and at the End, You Will See Trades Taken From These 2 as Well as Other Variations.

Net Profit + 4.69 ($4,690 Trading 10 Lots)
July Trades (FXE) Net Profit ($4,690 Trading 10 Lots)

Conservative Time Warp
Most of the Time Spent and the Examples Shown in Today’s Webinar Are Based on a More Conservative Variation. And, I Strongly Suggest That You Start With a More Conservative Variation.

Winners Average Greater Than 17% Weekly Returns. In Fact, So Far This Year, There Have Been 23 Trades, 2 Losses and the Net Return, Inclusive of Losses Has been 11.5% And the Current Trade is All But Guaranteed to Generate at Least a 21% Return (SPY Would Have to Move Higher by 2% in 2-Days to Hit Breakeven)

Aggressive Time Warp The More Aggressive Variation is for When You Become More Experienced and Comfortable with the Time Warp Strategy in General. There are Different Dynamics and Different Expectations from the Various Different Ways to Implement the Time Warp Strategy.

Time Warp

Despite the High Probability, Nothing is Guaranteed. There are Always Risks in Trading and You Should Never, Ever Take a Trade Without Fully Understanding and Accepting These Risks We Will Thoroughly Cover the Risks Associated With the Time Warp Strategy

This Strategy Can Be Applied to Any Market That Provides Weekly Options, Including SPY, QQQ, Other ETF Markets, Stock Options and Futures. But My Favorite is to Apply the Strategy to the SPY Due to the Specific Opportunities it Provides and the Characteristics of Stock Index Markets

Conservative Time Warp Strategy
The Time Warp Strategy is Logical, Easy to Trade, And Only One Thing Can Cause a Loss.

Conservative Time Warp Strategy
And, That One Thing Doesn’t Happen Often, but Only in the Strict Context Provided in the Webinar. If You Go Outside of this Context, Probabilities and General Characteristics Change

Which Actually Means That There are Two Things That Can Cause a Loss to Occur. One of Them I Will Fully Explain in This Webinar. The Second Thing That Can Cause a Loss With This Strategy is YOU (by not following the rules laid out in this webinar)

This Video Assumes That You Have a Basic Working Knowledge of Options
This Video Assumes That You Have a Basic Working Knowledge of Options. If You Don’t, Watch it Anyway. You Will Understand Enough to See the Value in This Strategy, and You Are Going to Want to Do Whatever it Takes to Learn How to Properly Trade it

You Are Guaranteed to Make Money if the Market:
Moves Up Stays the Same Moves Down (Even Crashes)

That One Thing That Can Cause a Trade to Lose is for the Market to Move Higher by an Abnormal Amount in a Very Short Period of Time (Generally About 5 Trading Days)

The Fastest, Safest Way to Grow Your Account
SPY Weekly % Increase/Decrease Breakeven Range

The Time Warp Strategy is a Very Specific Application of What is Known as the Diagonal Option Spread. An Option Spread is Where You Buy One Option (call or put) and Simultaneously Sell Another Option (call or put, whichever side you Bought). When These Transactions are Done at the Same Time, You Create a Spread Between the Options.

The Diagonal Spread Looks Like This:
Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21. Here, We Bought a 190 Call With 12 Days Left on it, and at the Same Time, Sold a 188 Call With Only 7 Days (5 Trading Days) Left Until Expiration. At the Time, SPY was Trading at

Long SPY 190. 00 Call (3/28/14 Exp) From. 20 Short SPY 188
Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21. So a Diagonal Spread is One Where Both the Expiration and the Strike Prices Are Different. There are Many, Many Ways to Create a Diagonal Spread. The Time Warp Trading Strategy Has a Very Specific Goal With the Spread so We Trade it a Very Specific Way.

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21. The First Thing You Should Understand is That All of the Stats and Characteristics That We Talk About in the Marketing is Because We are Limiting the Official Time Warp Strategy to CALLS ONLY

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21. You Can Absolutely Trade This Type of Diagonal Spread With Puts, and We Do…But There Are Different Dynamics at Work. We Will Discuss Trading Puts in the Video as Well, But We Strongly Suggest You Start by Only Trading Calls Until You Are Confident You Understand and Can Succeed With This Strategy

Second is That Our Long Call Cost LESS Than the Short Call.
Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21. Second is That Our Long Call Cost LESS Than the Short Call. This Means That We Created a Credit. There Are Times Where a Credit is Not Available (Especially With Put Spreads). That Doesn’t Mean it isn’t a Good Opportunity, it Just Means That the Dynamics Change a Little Bit…Again, We will Discuss These Things Later in This Lesson

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21. Ultimately, to Give us the Highest Probability of Success, We Want to Create a Credit With These Spreads if at All Possible. If a Credit is Not Available at the Beginning of Your Trading This Strategy, My Suggestion is to Wait for Those Opportunities Until You Are Confident You Understand the Dynamics and Have Experienced Some Success

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 Third, the Short Strike is 1.25% - 2% Above the Closing Price 1-Week Prior to Expiration The Higher the Short Strike is, The Higher the Probability That This Trade Will Succeed. At the Time This Trade Was Placed, SPY Was Trading at Approximately , Making the Short Call 3.50 Points Away, or 1.897% Out of the Money.

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 You Can Often Get BIGGER Credits With Spreads That are Closer to the Money, But That Falls into the More Aggressive Version and You Need to be Prepared for Those Dynamics if You Decide to Take a More Aggressive Trade

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 Fourth, the Short Option Expiration Should Only Have Trading Days Left Until Expiration. This is not Set in Stone, but for the Conservative Variation You Don’t Want to Go Over 7 Trading Days Unless You Have a Greater Distance to the Short Strike (In Other Words, You Have to Compensate for the Additional Time and Higher Probability of a Bigger Move). Until You Understand the Ramifications of Trading Variations of the Strategy.

Spreads With Credits Only Out of the Money Spreads
Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 Recap Calls Only Spreads With Credits Only Out of the Money Spreads No More Than 1-Week Spreads

Now Let’s Take a Look at How This Works
Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 Now Let’s Take a Look at How This Works On 3/21 (Friday), We Want SPY to Close At or Anywhere Below About Remember, at the Time of the Trade (On 3/14), SPY Was Trading at Around So in the Next 5 Trading Days, We Want the Market to Do ANYTHING Other Than Go Up by More Than 3.50 to 4.00 Points. Why?

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 What We Want is for the Short Call to Expire Worthless. As Long as That Happens, We are Guaranteed a Profit of at Least .21, or $210 Trading a 10 Lot Order. If The Short Call Expires Worthless, Then the Worst Thing That Could Happen to the Long Call is That it is Also Worthless. So We Make .41 on the Short Call and Lose .20 on the Long Call

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 We Make .41 on the Short Call and Lose .20 on the Long Call for a Net +0.21 This is True for Any Close at or Lower on 3/21/14 (Meaning the Worst You Can do is Make $210 on the Trade)

In the Next 5-Trading Days, You Are Guaranteed to Make Money if SPY:
SPY is Trading at In the Next 5-Trading Days, You Are Guaranteed to Make Money if SPY: Moves Up (Minimum ) Stays the Same Moves Down (Even Crashes)

Any Close Below the Blue Line Guarantees at Least $210 Profit

Market Closed at 186.20 and We Made $310 on the Trade.
Market Moved Higher, We Made MORE Than the $210 Credit

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 When the Trade Was Placed, SPY Was Trading at In order to Reach the Strike of the Short Call, SPY Would Have to Move Higher by 1.9% Over the Next 5 Days. However, With a Diagonal Spread, the Strike of the Short Call is Not the Breakeven Level. The Breakeven Level MUST be Higher Than the Short Strike + the Credit (or )

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 If the Market Moves to and Closes There on 3/21/14, Our Short Call will Expire at .21 for a Gain of .20 on This Leg of the Trade. Here, Even If the Long Call is Worthless, You Breakeven. So the Breakeven HAS to be Greater Than the Short Strike + the Credit.

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 How Much High is Different for Every Trade. The Breakeven Level is Generally Going to be From .50 Above the Short Strike, to as Much as 1.00 Above the Short Strike. (So Between – is Breakeven, or at Minimum a 2.17% % Move Higher From Friday to Friday). Only a Close on the Short Option Expiration Greater Than This Will Produce a Loss.

Option Analysis Concept - Comparison
Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 Option Analysis Concept - Comparison The Question is, How Much Will the Long Call be Worth With Just 1-Week Left? This Will Determine the Final Profit/Loss of a Trade

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 Option Analysis Concept - Comparison Very Powerful Concept for Determining Value of Almost Any Option Strategy. We Look at What the Value of a Current Option That is Similar to What Our Long Option Will Be at the Expiration of the Short Option

SPY is at The Aug 1 Exp Call is at 1.63 The Aug 8 Exp Call is at 1.93 If, in 1-Week SPY is at , How Much Will the Aug 8 Exp Call be Worth (Approximately)? 1.63(ish)

SPY is at What Will the Aug 8 Exp Call be Worth in 1-Week if SPY Moves Down 1.50 Points and is Trading at ? This Makes the Call 1.50 Out of the Money

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 Option Analysis Concept - Comparison If the Market Closed at on 3/21, the 190 Call Would be 1.79 Points Out of the Money With 1-Week Left. So We Will Look at the Current Option that is About 2.00 Out of the Money to Know What the 190 Call Would Have Been Worth Had the Market Closed at (instead of where it closed at )

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 On 3/14, SPY Closed at , Making the 3/21 Exp Call 2.00 Points Out of the Money With 1 Week Left. That Call Closed at .73. If SPY Would Have Closed at – on 3/21, the 190 Call With One Week Left Could Have Closed as High as .73. We Bought the Call at .20, So We Would Have Made .53 on That Leg of the Trade (We Exit Both Positions).

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 At , We Make .41 on the Short Call, and We Make As Much As .53 on the Long Call, For a Net .94, or $941. That is Why the Profit Potential is Actually Bigger if the Market Moves Up to Around the Short Strike Level. The Greater The Long Option Price, the More Money We Make on the Trade.

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 What Happens When SPY Moves Above the Breakeven (Between and in the Example Above in Most Cases) on Expiration? What are the RISKS?

Long Strike – Short Strike - Credit 190 – 188 - .21 = 1.79 ($179)
Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 Risks Long Strike – Short Strike - Credit 190 – = 1.79 ($179) On 10 Lots, That is a Maximum Risk of $1,790. The Market Can Sky-Rocket and Your Risk is Absolutely Capped at This Number. The Risk is ONLY to the Upside

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 Risks This is NOT Like a Credit Spread. With a Credit Spread, Your Maximum Risk is Hit at the Long Strike. So For Example, a Credit Spread Would Look Like This: Long SPY 190 Call 3/21 Exp From .12 Short SPY 188 Call 3/21 Exp From .41

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 Risks (Credit Spreads) Long SPY 190 Call 3/21 Exp From .12 Short SPY 188 Call 3/21 Exp From .41 Credit is .29 (Maximum Profit Potential) Breakeven is , or Above That You Start to Lose Until the Maximum Risk is Hit at the Long Strike, or At 190 or Above, You Lose 1.71

Why is the Diagonal Spread Different?
Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 Why is the Diagonal Spread Different? The Profit Potential is Greater Than the Credit The Maximum Risk is Well Above the Long Strike Because There is Still 1-Week Left

Long SPY Call (8/8/14 Exp) From .39 Short SPY Call (8/1/14 Exp) From .89 For a Net Credit of 0.50 Risks On 8/1 if the Market Were to Close at , the Long Strike Would be at the Money With 1-Week Left. We Already Know the Short Call Would Be Worth 2.00 Giving us a Loss of 1.11.

Long SPY Call (8/8/14 Exp) From .39 Short SPY Call (8/1/14 Exp) From .89 For a Net Credit of 0.50 Risks On 7/25, the Market Closed at , Making the Aug 8 Expiration Call “At the Money” With 1-Week Left.

Long SPY Call (8/8/14 Exp) From .39 Short SPY Call (8/1/14 Exp) From .89 For a Net Credit of 0.50 Risks On 7/25, the Market Closed Close to , Making the Aug 8 Expiration Call “At the Money” With 1-Week Left.

On 7/25, the Aug 1 Expiration 197.50 Call Was Trading at 1.20.
Long SPY Call (8/8/14 Exp) From .39 Short SPY Call (8/1/14 Exp) From .89 For a Net Credit of 0.50 Risks On 7/25, the Aug 1 Expiration Call Was Trading at 1.20. If SPY is Trading at at the Close of 8/1/14, the Aug 8 Exp 200 Call Should be Worth Approximately 1.20, Giving Us a Profit on That Leg of the Trade at .81.

Long SPY Call (8/8/14 Exp) From .39 Short SPY Call (8/1/14 Exp) From .89 For a Net Credit of 0.50 Risks So We Lose 1.11 on the Short Call and Make .81 on the Long Call for a Net Loss of Only .20, or $200 on a 10-Lot.

Long SPY Call (8/8/14 Exp) From .39 Short SPY Call (8/1/14 Exp) From .89 For a Net Credit of 0.50 Risks What if the Market Sky-Rockets and Goes to 202 by Friday? The Short 198 Call Would Lose 3.11 While the Long 200 Call Would be Worth Approximately 2.65 for a Gain of 2.26, Providing a Net Loss of .85, or $850 on a 10-Lot.

Long SPY Call (8/8/14 Exp) From .39 Short SPY Call (8/1/14 Exp) From .89 For a Net Credit of 0.50 Risks If the Market Goes Nowhere and Closes at , I Make .89 on the Short Call and the 200 Strike Call is Worth Approximately Breakeven for a Net Profit of $890.

Profit Potential Graph
Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 Profit Potential Graph

SPY Weekly % Increase/Decrease Breakeven Range

Long SPY Call (8/8/14 Exp) From .39 Short SPY Call (8/1/14 Exp) From .89 For a Net Credit of 0.50 Risks What About to Reach the Maximum Risk? Our Maximum Risk on This Trade, No Matter What, Cannot Exceed 1.50, or $1,500 on a 10-Lot.

Long SPY Call (8/8/14 Exp) From .39 Short SPY Call (8/1/14 Exp) From .89 For a Net Credit of 0.50 Risks What About to Reach the Maximum Risk? Our Maximum Risk on This Trade, No Matter What, Cannot Exceed 1.50, or $1,500 on a 10-Lot. If the Market Were to Increase All the Way to 205, the 200 Call With 1-Week Left Would be 5 Points in the Money. It closed at 5.25, Meaning That There Was Still .25 of Time Value.

Long SPY Call (8/8/14 Exp) From .39 Short SPY Call (8/1/14 Exp) From .89 For a Net Credit of 0.50 Risks With .25 of Time Value Left, That is .25 Off of the Maximum Loss, or a Loss of 1.25 Would Occur, or $1,250 on a 10-Lot. This is Still Somewhat Large, but The Market Would Have to Move 3.8% in Just 1-Week For This to Happen. (And During One of the Most Bullish 12-Month Periods, It Hasn’t Done That Once).

Risks The Point is, With the Diagonal Spread, When Traded According to These Guidelines, Has a Very, Very Small Chance of Realizing the Maximum Risk on Any Given Trade.

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 Risks It is This Reason That for Beginning Diagonal Spread Traders, it is Best to Stick With Calls. It is Difficult to Get a Credit With Puts, AND it is More Likely That a Fast Sell-Off is Going to Occur More Often Than the Market Sky-Rocketing in a Short Period of Time. There Are Opportunities, But You Just Have to Be Aware of How the Risks Work Before You Jump in.

One Last Thing About the Risks.
Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 One Last Thing About the Risks. We Hold Until the Short Option Expires, Always.

Tuesday Breakeven Line Friday to Friday

Long SPY Call (3/28/14 Exp) From .20 Short SPY Call (3/21/14 Exp) From .41 For a Net Credit of 0.21 If SPY Immediately Moves Higher After Placing the Trade, You Will Show an Open Loss Most of the Time, Even if the Price Remains Below the Short Strike. This is Normal. Some Use the Opportunity to Cost Average and Get a Better Price. For Example, in the Trade Above, SPY Moved Up Immediately and the Credit Went to Almost .50 on the Trade.

SPY Weekly % Increase/Decrease Filled Here?

Placing the Orders I Always Place a Limit Order to Enter a Trade and I am Always Trying to Get a .15 Credit or Better. If the Market Has Moved Down Going into the Trade, I May Place the Strikes a Little higher. If the Market has Moved Up Going into the Trade, I May Place the Strikes a Little Lower. Sometimes We are Simply Not Filled or the Opportunity Simply Doesn’t Exist.

Exiting – If Out of the Money
If the Short Call is Clearly Out of the Money Toward the Close of Expiration, I will Allow it to Expire and Then Simply Exit the Long Call Right Before the Close. If the Short Call is In The Money, I Will Manually Exit Both Positions As Soon As There is No Extrinsic Value in the Short Call Option. Always make Sure You Exit Both Positions if There is Any Value in the Long Call.

Exiting – Out of the Money
If the Market Moves Down, and There is No Value in the Long Call, I will Hold it and Place an Order to Exit at .10 or .15 in Case the Market Bounces the Following Week.

Current Trade Short SPY 8/1 Exp Call from .51 Long SPY 8/8 Exp Call from .16 For a Credit of .35 You Will Notice the Distance Between Strikes is 2.50, not This Increases the Overall Risk, but Will Also Usually Increase the Profit Potential. (We Did Not Have a Choice on This Strike Distance)

July Trades Long July 18 Exp 199/Short July 11 Exp 197 calls from 0.57 Credit Exited on at .07 Debit for a Profit of 0.64. Long Aug 8 Exp 198/Short July 11 Exp 198 calls from 0.14 Credit Exited on at .83 Debit for a Profit of 0.97 Long Aug 15 Exp 135/Short July 18 Exp 134 calls from 0.03 Credit Exited on at .14 Debit for a Profit of 0.17 (FXE) Long (5)Aug 8 Exp /Short July 18 Exp 197 calls from 0.65 Credit. Exited on at .43 Credit for a Profit of 0.22

July Trades Long July 25 Exp 200/Short July 18 Exp 197 calls from 0.95 Credit Exited on at .52 Credit for a Profit of 0.43. Long Aug 1 Exp /Short July 25 Exp 198 calls from 0.63 Credit Exited on at .00 for a Profit of 0.63 Long Aug 1 Exp /Short July 25 Exp calls from 0.55 Credit Exited on at .07 Debit for a Profit of 0.63 Long Aug 1 Exp /Short July 25 Exp calls from 0.20 Credit Exited on at .18 Credit for a Profit of 0.38 Long Aug 1 Exp /Short July 25 Exp calls from 0.45 Credit Exited on at .18 Credit for a Profit of 0.63

Net Profit + 4.69 ($4,690 Trading 10 Lots)
July Trades (FXE) Net Profit ($4,690 Trading 10 Lots)

You Have Access to 1-Month of Signals
Compounding Login to and You Will Have Access to My Compounding Video Where I Show You How the Overall Equity Curve Can Increase by Over 10-Fold by Implementing a Very Powerful, but Conservative Compounding Strategy.

Options for Profits Course
If You Enjoyed This Lesson, There is a Lot More Where this Came From. I Have a 15-Hour Options for Profits Course That Goes from A to Z Providing the Most Logical, High-Probability Strategies in Options Out There. And, Like this Short Lesson on the Time Warp Options, I Never Use any of the Greeks When Entering Trades.

Options for Profits (Online) Course
15 Hours - Included with the Course: 3-Months of My Time Warp Signals 3-Months of OFP Weekly Covered Calls 3-Months of My Options for Profits Commodity Signals A Detailed, Step by Step Trading Plan for a $10,000 and $25,000 Account The Most Logical Approach to Options Trading 7 Different Option Strategies

Options for Profits Course
For a Limited Time, the Course is $897. However, You Can Get an Additional $97 Off of the Course. Simply Use the Following Coupon Code When Ordering: CREDIT97

Mission Million Trading Workshop
Live in Atlanta, Oct 23rd & 24th, 2014 Trading Education Trading Strategies Trading Signals Trading Plans Watch a $100,000 Account Trade for 1-Year With Potential Rebate Based on Performance Previous Workshop Videos

Time Warp Trading Strategy

Similar presentations

Presentation on theme: "Time Warp Trading Strategy"— Presentation transcript:

Similar presentations

About project

Feedback

Log in

Auth with social network:

Time Warp Trading Strategy

Similar presentations

Presentation on theme: "Time Warp Trading Strategy"— Presentation transcript:

Similar presentations

About project

Feedback