Options tribe 9-16-14

M3

Bearish Butterfly

ROCK

M21

John Locke

The Path to Becoming a Professional Options Trader

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TRAINING also offers web-based, interactive training courses on demand.

The seminars given by SMB TRAINING are for educational purposes only. This information neither is, nor should be construed, as an offer, or a solicitation of an offer, to buy or sell securities. You shall be fully responsible for any

investment decision you make, and such decisions will be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance, and liquidity needs.

This material is being provided to you for educational purposes only. No information presented constitutes a recommendation by SMB TRAINING or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy. The content neither is, nor should be construed as, an offer, or a solicitation of an offer, to buy, sell, or hold any securities. You are fully responsible for any investment decisions you make. Such decisions should be based solely on your evaluation of your financial circumstances. Such

decisions should be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance and liquidity needs.

SMB Training and SMB Capital Management, LLC are separate but affiliated companies.

No relevant positions

Please note: Hypothetical computer simulated performance results are believed to be accurately presented. However, they are not guaranteed as to accuracy or completeness and are subject to change without any notice. Hypothetical or simulated

performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Since, also, the trades have not actually been executed; the results may have been under or

over compensated for the impact, if any, of certain market factors such as liquidity, slippage and commissions. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any portfolio will, or is likely to achieve profits or losses similar to those shown.

All investments and trades carry risks.”

John Locke◦ NLP Master Practitioner, Certified in Neurolinguistic

Re-patterning and Ericksonian Hypnosis

◦ Success and Life Coaching

◦ Trading Performance Coaching and Mentoring

◦ Professional Trader on SMB Options Desk

www.lockeinyoursuccess.com

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Path to Becoming a Professional Trader

The average trader loses money over time

An average trader is a potential professional trader who next took the exit ramp off the circle of doom

Typical progression into complex options strategies

◦ Swing Trade Stocks

◦ Day Trade?

◦ Swing trade Options

Do you want to be an average trader?

Swing Trading Stocks

Day Trading

Swing Trading Long Options

Unfortunately a vast majority don’t make it

It is possible to make money ….

Positive Theta

High Probability

$$ Income Trading $$

Let’s sell option$

Vertical Spreads

Condors

Butterflies

Calendars

Diagonals

Income Trading – Really??

I’ve done it, I’ve finally done it,

I’ve found the Holy Grail and I’m set for life.

Until it doesn’t…...

Now what??

I finally made it!!!

Keep trading and hope market conditions change back in favor of trade

Jump to the next system Holy Grail system and repeat the process

Average Trader When His System Fails

Realizes all systems have strengths and weaknesses

Learns how complex options positions creates to market changes

Learns how to identify market changes

Learns how to adapt to new conditions

Successful Trader

You know basic complex options strategies?

Struggling to be profitable?

Think you’re skilled?

Think again.

This is your exit ramp to success

The M3*Please note that the prices and other statistics on the table below are hypothetical, and do not reflect the impact, if any, of

certain market factors such as liquidity, slippage and commissions.

M3 *Please note that the prices and other statistics on the table below are hypothetical, and do not reflect the impact, if any, of

certain market factors such as liquidity, slippage and commissions.

M3*Please note that the prices and other statistics on the table below are hypothetical, and do not reflect the impact, if any, of

certain market factors such as liquidity, slippage and commissions.

Bearish Butterfly*Please note that the prices and other statistics on the table below are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.

Bearish Butterfly*Please note that the prices and other statistics on the table below are hypothetical, and do not reflect

the impact, if any, of certain market factors such as liquidity, slippage and commissions.

Identify market conditions based on T+0 line

Teaches how to transform from M3 type of position to Bearish Butterfly type of position

Teaches how to deal with positions close to expiration

The ROCK*Please note that the prices and other statistics on the table below are hypothetical, and do not reflect the impact, if any, of certain

market factors such as liquidity, slippage and commissions.

Entry Test*Please note that the prices and other statistics on the table below are hypothetical, and do not reflect the impact, if any, of

certain market factors such as liquidity, slippage and commissions.

Normal Entry*Please note that the prices and other statistics on the table below are hypothetical, and do not reflect

the impact, if any, of certain market factors such as liquidity, slippage and commissions.

Hi IV Entry*Please note that the prices and other statistics on the table below are hypothetical, and do not reflect

the impact, if any, of certain market factors such as liquidity, slippage and commissions.

From there ……*Please note that the prices and other statistics on the table below are hypothetical, and do not reflect the

impact, if any, of certain market factors such as liquidity, slippage and commissions.

Or This*Please note that the prices and other statistics on the table below are hypothetical, and do not reflect

the impact, if any, of certain market factors such as liquidity, slippage and commissions.

Or This*Please note that the prices and other statistics on the table below are hypothetical, and do not reflect the impact, if any, of

certain market factors such as liquidity, slippage and commissions.

M3

Bearish Butterfly

ROCK◦ M3R◦ CAT

◦ ROCK w/ Roll back◦ Mod ROCK

Three Powerful Trading Systems

The M21 is the concept of analyzing market conditions and then creating a customized trading plan using a combination of the M3, Bearish Butterfly and ROCK trades that actually fit the environment.

What is M21?

Know the type of environment we’re entering

Know the strengths and weakness of our positions

Plan around the market environment and the strengths of the trades

Have the proper mindset

Trade our plan

How do we get to a professional level trader?

Easier to manage

Better win rates

Smaller draw downs

Higher profit targets

It makes sense to know the market you’re entering

Entry Plan*Please note that the prices and other statistics on the table below are hypothetical, and do not reflect

the impact, if any, of certain market factors such as liquidity, slippage and commissions.

Market does not go up – Trade as 1080 M3 milk it for all we can 10% +

Market goes up – switch to 1000/1140/1160 ROCK if RUT over 1120 and go for 15+%◦ Reverses down hard – ROCK drops back to reverse ROCK and then CAT take what

you can get 5 -10%

Market drops and breaks channel – use M3 rules take what you can get 5-10%

Market breaks channel then reverses hard to up side and we are too close to expiration to go into ROCK position – Hold M3 position do the best you can +/- 5%

Market tanks under 980 – exit at small loss

Market goes up past 1175 – exit trade for small loss

Max loss? Usually 10% and must be defined in risk plan

Adjustment Plan

Another example of an entry plan*Please note that the prices and other statistics on the table below are hypothetical, and do not reflect the

impact, if any, of certain market factors such as liquidity, slippage and commissions.

Adjustment Plan*Please note that the prices and other statistics on the table below are hypothetical, and do not reflect the

impact, if any, of certain market factors such as liquidity, slippage and commissions.

John Locke www.lockeinyoursuccess.com [email protected] Facebook: Locke in Your Success Twitter: locke4success 603-738-1795

Locke In Your Success, LLC