Location: All meetings, unless otherwise noted, are held at the Elks Lodge, 375 N Pastoria, Sunnyvale, CA (http://tinyurl.com/ElksLodgeSunnyvale)
Playing with the House – the In/Out Spread
“Why can’t I make money?!” Stock prices often seem to move around at random, sometimes illogically. This is the crux of the “Random Walk” hypothesis, which says that prices move around at random. The “quant”, or quantitative trader, uses probabilities to enter and exit trades and for the most part ignores trends and other technical analysis. We will look at why trading single options, from a quant perspective, is a difficult venture that - in the long run - has the odds against us. However, with the use of vertical spreads, we can flip the table around and become the (casino) “house”, where the odds are now in our favor. The In/Out spread is such a vertical spread. It will be shown how to set up and enter the In/Out spread and talk about its advantages. We will talk about how to manage it and how to exit the trade. If we combine this with our technical analysis, we can further put the odds in our favor. We will look at a few different stock scans to try to find good In/Out spread candidates. If you have a favorite scan that finds good trade candidates, bring a list of stocks and we will try to look at those, too.
About Our Speaker
Originally from Lafayette, CA, Rob graduated from UC Berkeley Class of ’78 with a BS double major in Electrical Engineering & Computer Science and Materials Science Engineering. Rob worked two years in the semiconductor industry at Fairchild and 21 years at Lockheed Martin, formerly Lockheed Missiles and Space Company, where he spent 14 years in test equipment design and another seven years training other engineers about the Trident missile and its subsystems. Rob has used his experience as a trainer to teach other stock and option traders and frequently was a keynote speaker both before and after he helped co-found SVOG as a non-profit organization in 2008. Rob started trading in 2004 as an Investools student, but since then has studied under Rance Masheck, Charles Cottle, Dan Sheridan, David Elliott, John Person, Bill Poulos, Jake Bernstein, John Carter, Awais Bokhari, and Don Kaufman.