Karen the Super Trader notes

1/21/14

Notes from the first 2 TastyTrade videos featuring Karen the Super Trader.

2007 - $100,000
2008 - $150,000 : 50% return!
by 2011 - $41million (includes additional capital)

Transition to success:

• Stopped trading stocks (50/50 proposition)
• Stopped trading earnings plays (got burned too many times)
• Slowly migrated from stocks to indexes
• Prior to 2009: iron condors and credit spreads
• Beginning in 2009: naked options
• Started shorting premium

Trading practices:

• Watches price, volume, and bollinger bands
• Entry at 56 DTE
• Won't give premium back to the market
• Opens additional positions to ensure at least some profit
• Trades SPX, RUT, and NDX
• Smaller accounts should trade SPY, IWM, and QQQQ

Manages 2 Funds:

• Fund A: grew from $42M --> $95M
• Fund B: grew from $27M --> $42M, profits go to charity

Picking Strikes:

• SPX @ 1450: using TOS Analyzer, pretend market is 1370 (about 5% down since market can crash down but doesn't crash up
• Sell puts 12% below adjusted market price (about 17% below current market price)
• Also sell puts on downswings
• Sell calls 10% above (not clear on whether this is above the 'pretend' price or current)
• Starting at 56 DTE, flip 2-3 times (assume this means get out and back in 2-3 times)