John Carter - Weekly options

Course I am writing about can be found here . I'm not sure if John has multiple sites.

I know lots of folks have an interest in weeklies.......This is just my experience with his work..Remember I am not a writer, just a grunt trader !!!

Please ask me questions and i will try to answer the best I can....

I've recently had the pleasure of going over the Weekly option course work offered by John Carter. This consisted of a four hour session that was recorded on a Saturday followed by three days of live trading. Also recorded.

At first I was skeptical as I have been know to be difficult on vendors but I watched a few of John's “teaser” webinars on youtube and was impressed with what I saw. Quite often the youtube videos are nothing more than glorified commercials by vendors but a few of John's had some very good content.

Options can be difficult to master and finding a good teacher that fits your personality is a must. I had one nice fellow who's Kindle books get rave reviews showing me a few things. Unfortunately I found the concepts a bit too complex and only made it through 3 weeks of an 8 week course. I just couldn't wrap my head around the ideas and stopped following. The Kindle books were great though.

Ok, so back to John. He's been around for years and training people for a long time. He goes over the concepts in a clear cut manner and removed much of the complexity for me. Since this was a weekly options course that was the main focus but he also covered some longer time frame ideas and how it all fits together. He is selling options 90% of the time or more and sometimes goes for the homerun trade. Like many he is using credit spreads with the occasional debit spread. If you are familiar with his work like “ The Squeeze” ( which is a volatility/price contraction setup) then you may understand how and when to sell options based on that setup alone. That is just one element of his training and he also has trades he takes each week in the Spx and/or NDX. You can use the smaller contracts to simulate these trades too. It is not my intent here to go over all the course content. The squeeze was just one small example.

A big part that was holding me back from trading options was the learning curve with options software. I recently opened a Think or Swim account and I am getting up to speed on navigation through that platform. John uses TOS ( Think or Swim) for managing his options but also has a Tradestation account which I would say he uses for most of his chart work. He provides templates for both platforms and I hear they may be working with Interactive Brokers to reach more customers. Take it from me, do yourself a favor and open a TOS account. It really is an amazing analytical tool and Interactive Brokers was just hell for me to navigate with their options software. I mention this because during some of the live sessions ( these were recorded on a Tuesday and the subsequent Thursday and Friday) John has TOS experts come in and cover some cool stuff in TOS from scans to basic tricks and functionality. Those sessions were usually kept to an about an hour before John got back on the mic. It helped me a lot to watch them navigate.

The idea of listening to someone prerecorded over three trading days can be daunting but John kept the material flowing smoothly. I think the live sessions were critical as the ideas are repetitious and seeing them in action really helps in understanding Repetition is the mother of skill. So this was a great way to see someone skillful apply the ideas. I also found it refreshing that John admitted that these 3 days were not the greatest market conditions and some stocks moved very far beyond statistical norms which can be an option sellers enemy. This gave John a chance to explain adjustment and protection ideas. The last thing you want as an option seller is to be right 90% of the time and have that last 10% take back all of your profits. So it is very honest of him to not just cherry pick some great trading conditions and pretend that this is all easy. I respect that.

John gives out templates of his workspaces and excel spreadsheets as part of the course. He also provides pdf files and summaries of the key ideas and even a write up on “ Karen the supertrader” from the Tastytrade channel. He goes over his indicators so those who don't want to use TOS or Tradestation can replicate them. It was bit overwhelming for me to see someone follow what seemed like 20 or so tradeables. Especially someone like me who was only trading the ES market with very few indicators. So while his layout can at first look very colorful and busy to the untrained eye you soon get used to it and can spot things quite quickly. This is another bonus of having him take you through those 3 live trade days. He also goes over scans you can run to narrow your focus to find good potential candidates for trades. You doesn't imply that you have to trade as often as he does or that you need to follow as many things as he does.

Since price is your big enemy with short term trades like the weeklies, there isn't an abundance of talk about the option “ greeks”. Thank goodness ! He does cover delta, theta and how to calculate something called “expected market maker moves” which is very helpful. The TOS platform does it for you but a spreadsheet is also provided for those lacking the software. If your looking to analyze gamma and rho and go crazy with all that stuff then you really won't find that in this course. It isn't needed.

You can tell by the way John talks that he is a big fan of Mark Douglas and his book “ Trading in the Zone” at least the core concepts. John has a segment in the course that covers on what he thinks will help elevate your from a struggling small trader to a great trader. There is even some brief discussion on health and what's working for John and some of the members who attended the live sessions. Some very interesting material and references.

I really enjoyed the course and would suggest it to those who are looking to learn some solid ideas for trading the weeklies. He also offers a chat room for an added fee. Usually I'm turned off by “add-ons” and things but I don't think the chat room is a bad idea for some extra hand holding if you think you might need it. John seems very open and you can see his trades and platform . I liked the way the material was presented and watching the trades and listening to his thought process was a big help. Please feel free to contact me if you have any specific questions that I can help with.

Good write up Bruce. I still trade a few options setups but only the Bittman on the weeklies. I found the weeklies to be too small a return, especially when factoring in commissions-and I get a good rate for a retail trader.

My experience with monthly options are as follows. Typically to get a "good" premium, you have to be a naked seller, very uncomfortable for me. if you spread it off, often the premium just isn't worth it IMO.

When you are naked and it goes against you, conventional wisdom is to roll up and out to defend your position etc. The concept of putting on a trade for $200 per contract one day and then getting put the stock and selling calls or any of the other "defense" positions which could last months is very unappealing to me.

The other issue for me is becoming overcorrelated. lots of people got hurt on the oil slide. So many in that sector had good premium on the 1st leg down and people got caught holding HAL, XOP, RIG CL etc. Same thing happens if one is short NQ and APPL, actually a double position IMO.

I look forward to your continued options posts as you are a much better trader than I. Maybe you can find success in options as well.

Good luck
Big Mike.....I find that so far the most critical thing is either having plenty of time with low volatility ( so u can adjust if not good for weeklies) or even better is only trading when Implied volatility is really high around earnings or some other event.........and IV is way up in it's percentiles..
Originally posted by BruceM

Big Mike.....I find that so far the most critical thing is either having plenty of time with low volatility ( so u can adjust if not good for weeklies) or even better is only trading when Implied volatility is really high around earnings or some other event.........and IV is way up in it's percentiles..

Despite what a lot of the option selling gurus tell us, a small retail trade needs have success picking direction. The probabilities and Greeks are only pertinent to the snapshot of time when you enter. After that everything moves.

Spread trade (verticals) really cuts the risk while also cutting the profit. There really is no edge to buying or selling options. The small edge is that IV is typically greater than realized volatility. But when realized vol is greater than IV, LOOKOUT!! Leverage cuts both ways.

I know you crave more trading knowledge, a very good trait, but IMO your knowledge and trading ability in ES is sufficient to make a nice living.

Good luck, I will fill in where I can. I'm no expert by any means but gave options a serious look.