Disclaimer
• My Background and Who We Are
• Benefits of Day Trading & Swing Trading with
WEEKLY Options
• A Dynamic Price Cycle Timing Model for All Asset
Classes
• Powerful Break-out Strategies
• Hidden Gem WEEKLY Option Expiration Strategies
• Money Show Giveaway “Power Bar Break Out Strategy” • Money Show Special “Kitchen Sink” Offer
Who Is Larry Gaines Anyway?
I have been trading and brokering commodities and
financial markets for over thirty years. Over twenty years ago, I started trading newly created option contracts on cargoes of North Sea Brent Crude Oil, and traded millions of barrels of these crude oil options.
My trading career first began with cargoes of foreign crude oil for legendary oilman Oscar Wyatt, founder of the Coastal Corporation, a large publicly listed integrated oil company in the 80’s.
For over ten years, I managed the international oil trading and marketing group for Transworld Oil Bermuda, one of the largest oil trading companies in the world. My group traded billions of dollars’ worth of oil, foreign exchange and financial market derivatives. It was not uncommon for us to trade over a billion dollars’ worth of commodity derivatives in a single day.
I am the founder and CEO of Power Cycle Trading, Home to the Options On The Open Virtual Trading Room, where individuals learn how to generate greater returns from their investment capital with less risk exposure. Utilizing my thirty years of professional trading
experience, I developed a simple yet highly accurate price cycle trading system that individual traders can easily
learn and use to level the playing field with the Wall Street pros. The “Power Cycle Trading(tm)Model”® gives
traders or investors the ability to recognize and capitalize on the beginning of a trend rather than the end.
So let’s get started on this journey to
becoming a successful trader……
It is important to understand that becoming a
successful trader or even a great trader is a
journey.
There is no perfect trader or perfect system but
when you have a system that is highly accurate,
and a teacher and mentor with over 30 years of
real trading experience, your journey to
achieving success becomes much quicker and
easier.
90% of Trading Success is determined by mental and emotional control. If you are not in control of your emotions, then you are doomed as a trader.
As someone who has spent their entire professional career in trading, I know first hand that the best way to take control of your emotions is accomplished by trading with a proven high probability trading system and using good risk management.
There is a great saying in trading: “Anything can work sometimes, nothing works all the time and very few things work most of the time”.
So as a trader, wouldn’t it be great to have an investing or trading methodology that works MOST OF THE TIME? This is what I offer our members at Power Cycle Trading.
Today I will go over this trading methodology which
incorporates the use of our dynamic trading system with
WEEKLY Options to provide our members a system that does work MOST OF THE TIME!
Personally knowing you and your trading reputation for the last thirty years, I kept on remembering your words each totally frustrating trade I made the rest of that week.
Today I made six option trades in Apple …….5 wins and 1 small loss for a total net profit of $230 per contract.
Your indicators guided me through each of these trades. There is no way I would have even thought about day trading options in Apple prior to buying your course.
"Thanks Larry for developing such a simple to use trading system that has helped me to get more winning trades. I have been very impressed and feel confidant following your system.
I have gotten 80% successful trades and on my first CASH trade I made a 15% return!"
As seen in the Options on the Open
Trading Room….
9:36 AM EST ~ Will from Texas ~ "Day in day
out…your indicators just continue to impress me Larry!“
9:41 AM EST ~ Stewart from Wales, U.K. ~ "Totally
agree with Will. Profit target reached again
already thanks Larry. You can count me in until I die,
so please never retire! Will just listen in and read comments for rest of the day."
While I’ve traded credit spreads for years, I’ve
enjoyed and profited from some exciting new
strategies that have less risk and more reward.
Larry is an excellent teacher and sticks to high
probability trades…It’s a winner!!”
The Power of WEEKLY Options
Trading Benefits
of
When day trading or swing trading stocks I use
Weekly Options which offer some exceptional
trading benefits….
One primary benefits is…..
WEEKLY options now account for nearly 12% of the 300+
MILLION option contracts traded every month.
Options On The Open is one of the very few educational services
that teach how to day trade and swing trade WEEKLYs in a virtual trading room using our proven trading system the Power Cycle
Trading(tm)Model.
WEEKLYS are still a relatively new contract but should not be
overlooked for they offer huge trading benefits, if you know how to use them.
Some of the more exciting stocks like Apple and Google, WEEKLYs now make up a whopping 40% of all option volume traded!
New options are available each Thursday and expire the next Friday, 8 days later….
• Weeklys are cheap... since expiration is within days, and often hours, you can purchase At-The-Money Weeklys for as little as $5 or $10 per contract...
• Weeklys have unlimited profit potential... They can move
500%, 800%, 1,000% or more on a very regular basis. Contrast that with regular options….
• Weeklys are easily traded securities... They trade just like stocks. And volume is very high so liquidity has never been a problem.
• Weeklys bring in 333% more low-risk income... Weekly options give you 52 times a year to profit from low-risk, non-directional & directional income strategies... 40 more opportunities every year.
WEEKLYS are for everyone - not just the pros.
Options have managed to get a bad rep over the years - despite being used by practically every professional investor out there.
This is because most education offered on options is so difficult and complex that new traders are simply overwhelmed.
I use what I call the “Practical Way of Trading Options” to
teach option trading ~ this approach is focused on Option Delta & Market Timing…
Market Timing is the single most important factor in
assessing a stock's likely price movement. Traders realize the
importance of market timing, but just don't have what they need to get this information quickly and accurately. But with my Price
Cycle Trading System, our members at “Options On The Open
Combining the accuracy of the PCTM® with Weekly
Option trading has regularly demonstrated outstanding profits ranging from 25% to greater than 400% over a one to five day period in our virtual trading room at Options on the Open.
The dynamics of these short duration Weeklys offer us exceptional trading benefits:
· The ability to make money with lower risk · Low capital requirements
· Shortened time frame for trading · Higher profits
· Higher return on capital
The value of an option is determined by:
Time Value X Implied Volatility X Intrinsic/Extrinsic value… By using Weekly Option’s for day trading & swing trading we have been able to better utilize their beneficial factors of; time decay, volatility and option delta, creating a forceful triple win trading formula…and
Then by combining our highly accurate directional price cycle ~ break-out system we have created one really great
Apple, Inc. Volume Cost Profit/Share or Contract Profit/100 Shares ROC $640 per share Market Price
100
shares $64,000 $1.00 $100.00 0.16% AAPL Weekly ~ 5 days expiration
"Option Delta .50"
$640 Calls ~ Cost/Contract $500 1 contract $500/Contract $0.25 $25.00 5.00% $640 Calls ~ Cost/Contract $500 1 contract $500/Contract $0.50 $50.00 10.00% $640 Calls ~ Cost/Contract $500 1 contract $500/Contract $1.00 $100.00 20.00% $640 Calls ~ Cost/Contract $500 1 contract $500/Contract $3.00 $300.00 60.00% AAPL Monthly ~ 12 days
expiration "Option Delta .50" $640 Calls ~ Cost/Contract $1,050 1 contract $1,050/Contract $0.25 $25.00 2.38% $640 Calls ~ Cost/Contract $1,050 1 contract $1,050/Contract $0.50 $50.00 4.76% $640 Calls ~ Cost/Contract $1,050 1 contract $1,050/Contract $1.00 $100.00 9.52% $640 Calls ~ Cost/Contract $1,050 1 contract $1,050/Contract $3.00 $300.00 28.57%
Our trading success starts with the Power
Cycle Trading(tm)Model which we use
As a professional trader I have spent thousands of hours and thousands of dollars on trading systems. I was paid well into the millions to analyze and
implement trades for others.
I have used, reviewed and developed many different trading systems, and in my opinion, the ones that perform best have a medium complexity, not too
You can use the Power Cycle Trading™ Model to trade successfully across all asset classes and time frames.
It is Universal.
It can be used by investors or traders for market timing the MACRO & Long Term Trends of the markets, OR by traders wanting highly accurate entries for swing trades and day trades.….It
covers them all…..
Our focus in the Options On The Open Virtual Trading Room is day trading and swing trading both Options & Futures using the PCTM.
The Power Cycle Trading(tm)System is based on a 4-step price cycle trading model.
It uses four powerful indicators to signal a price cycle change by identifying:
• A defined price range • Price volatility
• Change in price cycle
We use this same model of indicators across 2 to 4 different time frames for all trade set-ups &
trigger entries. This is a trade confirming process….
This combination has created a trading system that has an average winning percentage of over 75%.
To further enhance the accuracy of this
Trading Model we incorporate Moving
Averages & Trend Lines for Break-Out
Trades & Trade Management.
Trend Line Break-Outs
Trend Lines ~ The correct way to construct
Supply and demand dictate price movement and the
use of Trend Lines. Trend Lines are universally used but the construction of them can be very dissimilar from one person to the next causing for a very subjective interpretation.
Consistency and uniformity are totally lacking. There is one effective method that will make constructing a
trend line consistent and mechanical, making it no longer subjective.
The difficulty, when creating these lines, involves the specific points to select and connect (review charts below). Human nature often interferes in the proper construction of these lines. We are accustomed to review the historical price activity of a market from past to present, with the dates reading from left to right. As a result, the demand and supply lines of a trend line are drawn and extended from the left side of the chart to the right.
Intuitively, this is incorrect, recent price activity is more significant than historical movement. So precision and accuracy demand that the lines be extended from right to left with the most recent date appearing at the right side of the chart.
Supply Pivot Points
A supply trend line is the declining price movement as defined by a down sloping “supply” line as well as the pattern of both lower price highs and lows.
The Supply Pivot Point is when there is a Price High that is not exceeded by the Prior Price or the Price immediately after. This is a Pivot High.
Demand Pivot Points
The Demand Pivot Point is when there is a Lower Price that is lower than the Prior Price and the Price immediately after. This is a Pivot Low.
Friday’s WEEKLY Option Expiration
~ Strategies ~
• Volatility Collapse Income Strategy
• Advanced Directional Strategy
Screening Steps For Friday Expiration
Trades
Looking for stocks that are susceptible to a short squeeze Looking for stocks that may break-out (Up or Down). Trend line analysis is used
Use the Power Cycle Trading(tm)Model for all entries
Option Chain ~ Strike Pinning Analysis
The strike closest to the underlying asset price, on the close, at expiration is referred to the pinning strike.
To screen for Friday Expiration Trades Pinning Analysis is done on every stock or ETF being considered for a trade.
One major key to a successful Weekly Option Expiration Trades is in the selection of the strike that is traded for Pinning. The main component of this analysis deals with
option open interest and volume of the options that expire on Friday.
The formula for this analysis is based on total volume (call Open Interest plus daily call volume plus put Open Interest
plus put daily volume). This is done on Thursday, 1 day, prior
This statistical overview identifies the strike with the most activity. On expiration there is a high probability that the market will push price towards the most active strike by the close on expiration.
There are so many market forces in play and this information highlights the most active strikes to watch and trade.
The Option Chain of APPL showed the open interest volume skewed to the $670 Calls with the most total volume building at the $665 Calls.
$665 Total Volume:
Call O.I. 8,659 + call volume 95,295 + put volume 60,537 + Put O.I. 9,297 = Total Volume of 173,788
For a thorough analysis over a number of stocks you can use a spread sheet to display total volumes:
How to use?
In this example the open interest total volume on calls is more than the puts (a call volume skew) and indicates the potential for a bullish close towards the $665 & $670 Call Strike at close. This gives me a bullish closing bias & has me looking for long WEEKLY Option Strategies.
Volatility Collapse Income Strategy
Short selling WEEKLY Puts for volatility collapse on Friday Option Expiration.
This strategy benefits from an increase in the price of the
underlying asset or a decrease in volatility. The risk is almost unlimited as the underlying asset falls. The profit is limited to the amount collected in option premium.
The highest profitability for maximum profit occurs when the put strike price chosen to short is ATM or ITM and is OTM at the close on expiration.
When one sells an option you collect that premium but now hold the option position with potential liability. For this reason the seller of a put or call is required to put up some collateral to hold the position. This collateral is not a cost. It is simply a deposit made with funds from one’s
trading account and is known as margin.
So when you consider the return on capital the only capital is the risk free interest that could be earned on funds used for collateral. This is creates great leverage.
Apple 400 tick chart Friday Expiration 8/31/12 Closed at $665.24
Apple $670 Put 15 minute Friday Expiration 8/31/12 Apple $670 Put closed ITM at $665.24
Apple $665 Put 15 minute Friday Expiration 8/31/12 Apple $665 Put closed OTM at $665.24
Returns on Apple short put strategy
Short $670 Puts: Expired ITM ~ covered before close Premium received $800 per contract
Covered ~ bought back @ $475 per contract
Gross profit ~ $325 per contract Return on Capital Out: 68.42%
Short $665 Puts ~ Expired worthless OTM Premium received $300 per contract
Expired worthless
Gross profit ~ $300 per contract Return on Capital Out: 100%
Returns on GLD short put strategy
Short $162 Puts: Expired worthless OTM Premium received $160 per contract
Expired worthless
Gross profit ~ $160 per contract Return on Capital Out: 100%
Advanced Directional Strategy
• Friday Expiration Day ~ day trade only
• Buy Single Options (Puts or Calls) ~ cheap options with defined low risk due to volatility collapse on expiration
$5/contract, $1o/contract, $25/contract, $50/contract
• Looking for stocks that are susceptible to a short squeeze
• Looking for stocks that may break-out (Up or Down). Trend line analysis is used
• Use the Power Cycle Trading(tm)Model for all entries
• Pinning analysis done on all stocks or ETFs being considered • Potential Profits 50% ~ 1,000% plus
Advanced Directional Strategy ~ NFLX
Bought at open 3/16/12 ~ Friday expiration the $110 call at$11/contract
$110 calls high at $174/contract/closed at $127/contract
Net gain ~ $127/contract - $11/contract = $116/contract
or
Advanced Directional Strategy ~ BIDU
• Bought at open 1/27/12 ~ Friday expiration the $130 call at$5/contract
• $130 call closed at $145/contract
• Net gain ~ $145/contract - $5/contract = $140/contract
or
Any questions…...
Please email: [email protected]
