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The Option Alpha Podcast

Author: Kirk Du Plessis

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At Option Alpha we are devoted to empowering traders with simple, powerful tools supported by world-class research and education. For far too long the options industry has been fragmented, lagging, and unnecessarily complex. By developing industry-first automation technology, enhancing data and information accessibility, and nurturing our thriving community at every level, Option Alpha is changing the way people trade options forever. We’re more than just a software company; we’re leading a movement of traders at every level who are unlocking more freedom through improved and expanded options.
233 Episodes
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Show Notes: https://optionalpha.com/show232Navigating options expiration is a critical skill for traders, especially with the rise of daily expirations.This week’s podcast explores the top 7 automated tips and tricks you can use inside Option Alpha to set up your portfolio for better options expiration management.See all 7 tips hereAdjust exit options as you near expirationCheck the extrinsic value of your positions/legsCheck the probability of short legs being ITMDon’t use market orders, use defined limit ordersTag positions for their state so you can analyze performance laterSetup alerts for low liquidity exit conditionsSetup ‘critical’ alerts for positions between strikes of a spread
Show Notes: https://optionalpha.com/show231This week we explore the latest and most pressing challenges emerging for investors who have embraced autotrading.As automation revolutionizes the financial markets, traders find themselves navigating uncharted psychological territory. From trusting bots and algorithms, coping with reduced decision-making control, and the novel complexities of autotrading that demand a new style of adaptation and resilience. With help from our team, I’ll peel back the proverbial onion on the evolving mindset of options traders and shed some light on these new psychological challenges popping up.See the full list hereObsessive-Compulsive Overriding (OCO)Strategy StraitjacketingCurrent Events FallacySweeping Conclusion AnxietyShiny Object Syndrome FreezeBot ScapegoatingFeature CreepEmotional HedgingVersion Control DisorderIdentity Panic Disorder
Show Notes: https://optionalpha.com/show230 This week I explore a deep and philosophical viewpoint into the world of automated trading and its inevitable rise for investors. I explore the evolutionary nature of human decision-making and its limitations in complex financial markets by examining cognitive biases and their impact on manual trading. I’ll also discuss the technological advancements driving this shift, risk management in autotrading, and the future trends and challenges in this rapidly evolving landscape. Get ready for a fresh perspective on the future of investing and why autotrading is poised to dominate.These are my 9 key takeaways
AI is the hot new buzzword these days, sparked by the release of ChatGPT a few months ago. Since then, it seems everyone has used OpenAI’s software in fascinating (and sometimes scary) ways. So, I jumped into ChatGPT and asked it to come up with the top questions that new and advanced traders ask about options trading.  This week's podcast explores the 15 questions - and answers - that options trades want to know.See all 15 answers hereWhat are options and how do they work?How much money do I need to get started in options trading?How do I select the best options trading strategy?What are the key components of an options contract?What is the difference between a call option and a put option?What is the difference between buying and selling an option?How do I determine the strike price for an options contract?What is implied volatility and how does it impact options trading?What are the risks involved in options trading?What are the different options trading strategies I can use?How do I calculate profit and loss for an options trade?How do I manage risk in my options trading portfolio?Should I use technical analysis to inform my options trading decisions?Can you use charts and graphs to trades options?What are some common mistakes to avoid when trading options?
How long does it take a stock to get back to even after a large daily move down? And does the magnitude impact how long it takes the position to recover the loss?We’ve all been in losing trades and wondered if we should hang on to the position for a little longer or cut it loose. So, to help answer the question, we studied the short-term performance of stocks and ETFs after different daily loss totals.The study analyzed 324 assets over a 20-year period. We calculated the 5-day returns following single-day losses up to 5%.See the full research report here.
Stocks have been described as a rubber band, and we often assume they will snap back and revert when prices become overextended. So, we wanted to know: How likely is a security to continue or reverse its momentum above and below major moving averages in short, medium, and long-term timeframes? And does the security’s proximity to a moving average impact its performance?We researched 20 years of data on 286 symbols, using short, mid, and long-term trends to analyze the ticker’s 30-day return relative to its simple moving averages.I'll be honest, the results surprised me.Click here to see the full research report.
"The trend is your friend." It’s a popular saying amongst traders, and we hear it all the time. But is there validity in the statement?We backtested directional option selling strategies with a long-term trend filter to see if there is a significant impact on performance.We used Option Alpha's backtester to review the data for  SPY, GLD, and TLT short put spreads and short call spreads. Short put spread tests included a filter to only enter trades above the 200-day moving average. Short call spread variants included a filter to only enter trades below the 200-day moving average.Click here to see the full backtest results.Important Note: This podcast is for educational purposes only. Past performance does not guarantee future results. This data is presented objectively and is not financial advice or a suggestion to use these strategies. We encourage you to always do your due diligence and test your strategies.Let's take a closer look at the performance of these strategies using different trend filters. This is a great baseline when considering how to set up your trades, and we hope this inspires you to backtest your ideas for strategy optimization.
This week we take a look at the performance of the Monthly Iron Condors ($3k Portfolio) bot template. You might recall that we previously did a deep dive on this template back on Show 214, walking through the strategy setup, the scanner and monitor automation setups, etc. But now that we’ve had it running for a little over a year, we thought it would be help to take a look at how it has weathered this year’s market volatility and explore possible ways to adjust or improve its performance in the future.Important Notes: This podcast is purely for educational purposes and my exploration of this bot template is not a recommendation or suggestion to use this strategy as your own. Bot performance does not includes in commissions, which might vary from account to account or broker to broker. We encourage you to always do your own due diligence, factor in your own personal situations, and trade strategies you are comfortable with in your account.So, let's dive in and look at how this strategy has performed in this year's volatility and explore possible adjustments and future improvements. Ultimately, if nothing else, we hope this example helps give you some ideas to help with your own trading.
Show Notes: https://optionalpha.com/show224Option spreads are a simple and flexible, yet powerful strategy for traders. And while spread strategies come in many forms, shapes, structures, and durations, some core elements are present in spread trading generally that new traders should pay attention to. On this week's show, we'll once again slow things down a bit and focus on understanding what option spreads are and how to trade spreads in your portfolio.
Show Notes: https://optionalpha.com/show223What if you could build an automated strategy that navigates all market conditions? And while we know there is no one-size-fits-all strategy, we believe you can design a bot strategy that assesses the market trend and proactively adapts to current conditions. This "trader's dream" finally manifested itself in a bot template that become the collective “brainchild” of the amazing Community of traders right here at Option Alpha! The Hexabot, as it's now lovingly referred to as, was a labor of love, and we are super excited to share it with you. In today’s episode, we introduce you to the Hexabot and share the entire story of it's origin.
Show Notes: https://optionalpha.com/show222Option strike prices are an absolutely critical concept to master if you're going to seriously trade options at any point in the future. Without a holistic and firm understanding of what strike prices are, how they work, why they are different than break-even prices, you cannot be adequately prepared to safely trade options. And therefore, because we want to help all traders place smarter trades, we've devoted this show to answering your questions around option strike prices.
Show Notes: https://optionalpha.com/show221Starting to trade a covered call strategy is a popular "bridge" for traditional stock traders or investors transitioning to the world of options trading. It's a logical, bolt-on options strategy that has numerous benefits over traditional long stock positions. Today's show digs in one extra level and explores the different setups and ways to trade synthetic covered calls with a particular focus on using call spreads vs. single-leg short calls.
Show Notes: https://optionalpha.com/show220In today's show, I'll walk through four clever, dare I say "wicked-smart", ways to leverage our proprietary SmartPricing technology for routing orders intelligently to the markets. If you're already trading with us at Option Alpha then you'll learn some new techniques that will help improve the efficiency of your bots and automations. If you're not trading with bots yet and are still manually entering all your opening and closing orders yourself, waiting for your trade to fill, canceling and replacing the order with a different price if it doesn't fill, waiting again for the trade to fill, and on and on, then you'll love how much time you save when you start using SmartPricing.
Show Notes: https://optionalpha.com/show219Calculating break even prices for different option strategies isn't as complicated and overwhelming as it might seem. Yes, you do need to perform some basic math functions to find different break even prices but it's certainly not rocket science. Plus, it's an invaluable concept to master because it's critical to your success as a trader. In today's show, I'll help you understand what break even prices are and how to calculate them for all of the most popular option strategies. Yep, that's right, we're going to walk through everything together step by step so you can finally master it once and for all. Let's get started.
Show Notes: https://optionalpha.com/show218In life there are three things that are certain; death, taxes, and bear markets. For many new options traders, the current bear market we've found ourselves in might just be your first. An inconvenient reminder that risk is present when trading, particularly when trading options. But alas, as the old saying goes, "It's just part of the game..." and my goal today is to make sure that this bear market isn't your last. That's right, I want to help you survive this bear market, maybe even thrive in this volatility, and ensure that you live to trade every bear market that comes in the future.
Show Notes: https://optionalpha.com/show217Hey everyone this is Kirk here again from optionalpha.com, working every single week to make this the most popular investing podcast offered online because it's based on one thing and one thing only and that's. . . Helping you consistently place SMARTER trades. Thank you so much again for tuning in and welcome back!
Show Notes: https://optionalpha.com/show216Hey everyone this is Kirk here again from optionalpha.com, working every single week to make this the most popular investing podcast offered online because it's based on one thing and one thing only and that's. . . Helping you consistently place SMARTER trades. Thank you so much again for tuning in and welcome back!
Show Notes: https://optionalpha.com/show215On this week's episode, we'll present a collection of questions custom tailored for digging deep into your psychology and mindset around trading. These are questions you should ask yourself, ones that trading coach might ask you, on a recurring schedule to help uncover and keep a pulse on the potentially harmful subconscious "self-talk" that tends to consume you. Look, trading options is already hard enough and it's certainly not in your best interest be your own worst enemy when it comes to your mindset. We cannot predict or control the markets, though we all try on some level, but we absolutely can learn to focus and control our minds if we give it the attention it deserves. To help frame our trading psychology session together we'll walk through 15 questions you should ask yourself right now.
Show Notes: https://optionalpha.com/show214New traders with small accounts are constantly on the hunt for option strategies that help them get started but intelligently allocate their money without blowing up. And so back on Show 159 of the podcast we outlined a framework for building an options portfolio with just $3,000 which become of our most popular episodes. But when we recorded it, almost 2 years ago, we didn't have automated trading which means you still had to take everything we discussed and manually implement and execute the trading strategy yourself. Well, the days of manually trading are history. We've entered a new era with autotrading technology and on today's show we'll blow your mind as we introduce a new bot template you can clone in 1-click that was specifically built for traders with a small portfolio around $3,000. 
Show Notes: https://optionalpha.com/show213Last year during the beta launch of the autotrading platform, I decided to take some time off from trading so that my full and undivided attention was appropriately on supporting groups of beta users during the launch of the autotrading platform. Plus, my live accounts were the proverbial "guinea pigs" for lots of critical testing and bug hunting that could only be found when connecting bots to live markets. But this "reflection time" was not only welcomed because of the time it freed up in my daily routine, it also was enlightening to sit back and observe for an extended period of time. And now that I'm back to trading (with bots of course), I thought it might be helpful to share some of the the things that stuck out most during my time not trading. As they say, self-reflection is scary but necessary for growth.
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Comments (15)

ryan mcneil

It's back!!!

Jun 8th
Reply

Ola

Hi Kirk, Have you decided to stop recording the podcasts? There is nothing after October 2020. Could you let us know please?

Mar 31st
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Ola

Hi Kirk, Can you please mention what was the time period that you backtested those strategies over? You mention those 500-670% returns but the period of time you testes is not mentioned in the podcast. Many thanks in advance. Best, Ola

Jun 9th
Reply

fresh mannn

speaking of the scarcity mindset, be sure to look into Andrew Yang and his book “The War on Normal People”. Great ep Kirk

Nov 4th
Reply (1)

Ian Buell

Great episode!

Oct 22nd
Reply (1)

Jerrod Zertuche

loved this episode! always learn something with these. thank you Kirk!

May 15th
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Steven Ellenbogen

in my opinion the Option Alpha podcast is the best of breed. you owe it to yourself to take advantage of this free quality education

May 1st
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Robert Wollenberg

Before listening to this podcast I understood buying and selling options. Just the basics. I'm up to episode 68 or so right now and I understand so much more. Some episodes I listen to repeatedly for days to make sure I'm absorbing the bulk of the message. I take notes as well when I can. I would highly recommend this podcast to anybody interested in options. I look forward to the rest of the podcasts and hopefully joining the site soon as well. Thank you Kirk for all you do.

Apr 24th
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Jake Luttrell

Thanks for everything you do, Kirk. This podcast is great just like the rest of your content.

Oct 28th
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Krishna Bhat

Great Podcast Kirk. I started from episode 1 and am on Episode 35. Very methodical in your approach and I have found every episode insightful. Keep up the good work.

Mar 25th
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Matt snow

Kirk I have been listening to you for about a month and recently became a member of your service. Your teaching and explanations have helped me demystify options and gave permitted me to correct some errors I was making. Thanks so much. Great service folks!

Feb 25th
Reply

Sharla Grossie

I'm so glad I found your podcast! I listen to them all the time and take notes. I am also a student of your online courses. You give sound advice in this episode by telling us to teach someone who isn't involved with options. I find this method of learning very helpful! Thanks for all you do! Keep up the good work!

Feb 22nd
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Jas Bhatiwal

Hi Kirk, this is a great Podcast that I have begun listening too, information and explanation is invaluable. thanks Jas

Nov 8th
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