Tuesday, 27 December 2011

Chuck Hughes on the MVP Option Cycle Technique

By Chuck Hughes


The Chuck Hughes MVP Option Method invests in options on stocks that are in a Trend Line Strategy 'buy ' mode and have a trend validation of a new 52-Week High, leading industry group or price levelconfirmation. Historic and tangible profit results demonstrate this combination of secrets produces a powerful investing force that identifies options with the best profit potential.

The MVP Option Cycle Method takes options dealing to a different level by increasing the precision and profitability of MVP option trades. The MVP Option Cycle System uses historic price information to help select an option's time length (expiration date) and strike price with up to 90%+ accuracy.

While stock selection is important for successful option trading, in my previous experiences picking an option's time length and strike price is equally as important as choosing the stock itself!

I use the Chuck Hughes MVP Option Plan analysis presented in Chapter 5 of the MVP Strategies book to choose stocks for a call option purchase. When I discover a stock that meets the selection factors presented in Chapter 5 and opt to purchase a call option, I must then decide on an option time length (expiration date) and strike price. For many stocks there are hundreds of options to choose from with different expiration dates and strike costs. How does a backer effectively selected a choice with the best profit potential from one or two hundred selections?

I love to use historical price data to help decide on the time length of the option. Historic price information enables me to know the percentage of times a stock increased in price between option expiry dates. This helps me select an option time length (expiration date) that's got a high likelihood of success.



I also select a choice with an in-the-money strike cost. In-the-money calls have less time value and more intrinsic worth than out-of-the-money calls. As you will discover in this Report, buying an in-the-money call has a way higher probability of success than buying an out-of-the-money call. The goal of the MVP Option Cycle System is to enable you to become a successful options dealer by helping you understand the time length and strike price selection process that results in high accuracy and more rewarding option dealing.

I use the MVP Option Cycle Strategy to select time length and strike costs for the following option strategies:

1. Call and put option purchases

1. Call and put option spreads

1. Buy Write trades.



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