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The Option Alpha Podcast

Author: Kirk Du Plessis

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At Option Alpha we are devoted to empowering traders with simple, powerful tools supported by world-class research and education. For far too long the options industry has been fragmented, lagging, and unnecessarily complex. By developing industry-first automation technology, enhancing data and information accessibility, and nurturing our thriving community at every level, Option Alpha is changing the way people trade options forever. We’re more than just a software company; we’re leading a movement of traders at every level who are unlocking more freedom through improved and expanded options.
188 Episodes
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Show notes: http://optionalpha.com/show187We get a lot of questions around options expiration - hundreds and hundreds each week. Yet, the same vital few seem to float to the top consistently so we're pulling these 15 questions into this week's podcast episode to help you understand and effectively navigate options expiration. And in the off chance, we didn't answer your question during the show, you can always reach out to us anytime for help and support. If you're going to trade options, you can't avoid going through expiration. So, if you're going to trade options, you can't miss this week's podcast.
Show notes: http://optionalpha.com/show186Summer vacations are in full swing and as everyone rushes to their favorite social distancing hot spot, traders are often left wondering what to do with their positions and trades while away. And since we cannot build automated and trigger-based strategies yet, though it's coming soon from Option Alpha, we wanted to help with a simple but effective checklist you can use to square up your account before going off the grid. Make no mistake though, this checklist isn't just for when you go on vacation, it's also a great workflow to help you before a long business trip or busy week at home when you have limited time to manage your account.
Show notes: http://optionalpha.com/show185Filling option trades can often feel like pulling teeth. While some trades and orders get through easily and without issue, others are incredibly stubborn and hard to get filled. To add to your frustration, the entire order execution process appears to be just another confusing black box. There's seemingly no rhyme or reason why this trade got filled but that one didn't? So this week's show is dedicated to shining a light on order filling for option trades and helping to demystify what is otherwise a simple market process.
Show notes: http://optionalpha.com/show184Adjusting trades that move against you can be hard enough. Choosing how to adjust and when to pull the trigger complicates what otherwise was a simple trade to start with. Now, throw in an early assignment to the mix and you've got quite the convoluted option trade on your hands. Sounds daunting already doesn't it? But fear not. Complicated and complex trades like the one that happened to us in FXI the other month give you a great opportunity to learn and grow as a trader. On today's show, we'll walk through the entire FXI position from start to finish, including all the profit and loss calculations including adjustments and an early assignment. Lean into this show and don't skip it - your future self with thank you for taking the time now so that you don't have to freak out later when it happens to you.
Show notes: http://optionalpha.com/show183Be fearful when others are greedy, and greedy when others are fearful. This classic Buffett quote had echoed though the ranks of investors for decades. But does that data support the methodology? Does investor sentiment, which for many investors is widely considered a contrarian indicator, have enough predictive power to warrant our time and attention? In today's show, we'll explore investor sentiment from all angles and help discover which readings, if any, give predictive power to future stock market returns or trends.
Show notes: http://optionalpha.com/show182Greed, fear, FOMO, anxiety, panic, over-confident, stubbornness, impatience. These are just a few of the frequent emotional and mental states that traders find themselves in. And while we cannot avoid these emotions and thought processes, we can learn to manage them through emotional intelligence. This week's podcast was curated to help you learn how to more effectively recognize and manage the dozens of emotional and cognitive responses you'll come across in your trading career.
Show notes: http://optionalpha.com/show181There's an old saying in investing that a "rising tide lifts all boats." And while that might be true, when the tide goes out, all the boats sink and fall just as fast as they rose together. Still, you'll hear the pounding of drums in the name of classic diversification as the portfolio savior during these downturns. Our research suggests, however, that even a well-diversified portfolio can still completely blow up just when you need it to protect you most.
Show notes: http://optionalpha.com/show180You've got your prized covered call setup and it's working in your account - now what? How do you manage or adjust the position in different market scenarios? Lucky for you, we are going to review the best-covered call management techniques on today's podcast. And if you think this show is just for stock traders, you'd be wrong, because proper covered call management could be a lifesaver for options traders who get assigned and are forced to deal with stock.
Show notes: http://optionalpha.com/show179You've got your prized covered call setup and it's working in your account - now what? How do you manage or adjust the position in different market scenarios? Lucky for you, we are going to review the best-covered call management techniques on today's podcast. And if you think this show is just for stock traders, you'd be wrong, because proper covered call management could be a lifesaver for options traders who get assigned and are forced to deal with stock.
Show notes: http://optionalpha.com/show178Box spreads and arbitrage strategies are often synonymous with one another and referenced interchangeably in the options trading community. And after all, who doesn't want a risk-free way to earn money right? But like all things that seem too good to be true, box spreads carry some serious risks if you're not careful in how you set them up. Today's show then focuses exclusively on box spread basics for options traders.
Show notes: http://optionalpha.com/show177Index options have continued to grow in popularity. Potentially because they are easy to use, available in highly liquid markets, have favorable tax treatment in some cases, and offer a simple settlement process. Therefore, we've dedicated an entire show to help you understand what index options are, how they work, how they are different from equity options, and what you need to be aware of if you decide to start trading them in your portfolio.
Show Notes: http://optionalpha.com/show176Hedging stock positions can be tricky business. One of the most common schools of thought is to use a simple protective put strategy whereby a stock investor would simply purchase a long out-of-the-money put option to act as "insurance" in case the stock fell. Sounds logical but we're skeptics here at Option Alpha and so we went on a hunt to see what research and data say about the protective put strategy and it's effectiveness at protecting or hedging stock positions.
Show Notes: http://optionalpha.com/show175Stock trading is easy to understand conceptually because it's one-dimensional. Either the stock goes up or it goes down. Clear and simple, at least from a trading and profit or loss perspective. Options trading, however, is multi-dimensional. Price, time, and volatility all impact the value and price of an options contract. On today's show we're selectively choosing to highlight the impact that volatility has on options because, as we've seen in the 2020 market collapse, if you're not managing volatility, it could become your worst nightmare.
Show notes: http://optionalpha.com/show174Earnings season comes around four times a year for stocks, and as traders, we've always loved the idea of trading these events for the crush in implied volatility and quick potential moves in option strategy positions. However, after analyzing 1,546 earnings events across 40 underlyings over 10 years we decided to stop trading earnings events completely. In today's podcast, I'm going to walk through the research on earnings moves, and how different options strategies performed under various setups and conditions.
Show notes: http://optionalpha.com/show173We're excited and honored to have a very special guest this week on the podcast, Richard Hudson, co-founder of the London and Brussels-based Science Business Publishing Ltd. He's the co-author of The (mis)Behavior of Markets: A fractal view of risk, ruin & reward which he wrote with famed Yale/IBM mathematician Mandelbrot. Our discussion frankly should be required listening for any investor and was recorded in January of 2020 immediately preceding the market crash that occurred just weeks later.
Show Notes: http://optionalpha.com/show172This week on the podcast we're doing something a little different and turning this podcast episode into a full-blown audiobook. Today I'm recording the newest book we released entitled "Mastering Covered Calls". I encourage you to pick up your copy now, did we mention it's 100% free, and follow along as you listen to this audiobook. We've included dozens of charts, tables, and graphs to help as part of this new book and we hope you enjoy listening or reading your copy.
Show notes: http://optionalpha.com/show171Today on the show we welcome special guest, Rob, who's the co-author on our recent research report on Covered Calls. On the show this week we go over the top three performance insights we learned from our massive study on Covered Call Performance. If you trade covered calls right now or plan on using them at any point when dealing with assigned stock, then this show should be required listening.
Show notes: http://optionalpha.com/show170Factor-based strategies and trading systems are all the rage these days. We've been promoting these for many years now but it seems that more and more investors are catching on. As a result, we wanted to cover the 5 critical factors that your trading strategy should have. To us, these serve as the foundational elements for choosing which investing vehicles, indicators, or systems most appropriately fit your portfolio.
Show notes: http://optionalpha.com/show169This week we're very excited to share our exclusive interview with Kevin Davitt, a special guest with tons of experience not only as a former market maker, but as the Senior Instructor for The Options Institute at CBOE. As many long time listener's know, we are highly selective with people we choose to bring on as guests for interview and Kevin raises the bar yet again for us with an amazing discussion. During the show we'll touch on everything from his time as a market maker, transitioning to the retail side of trading, though processes on managing positions and controlling risk, and so much more. You're going to love this candid and wide-ranging discussion as much as we enjoyed the time with Kevin.
Show notes: https://optionalpha.com/show168Did you know that fear has nothing to do with logical or cognitive reasoning? It's actually a completely physical response that originates in our body. We fear to be wrong because that might mean we will be alone and people will leave us, which means that we won't be part of a tribe or community, which means it'll be dangerous and we might die. Okay, that's extreme but taken to its logical conclusion we fear because of conditioning we've had as humans for thousands of years to survive on a physical level.As options traders, we have fears about trading that manifest in dozens and dozens of ways. Today, as we circle the Halloween season, I wanted to tackle the 27 biggest options trading fears that we hear in our community. And, more importantly, how to overcome and conquer these fears. Just saying them out loud and talking through them together might just be what you need to set yourself free and on the right path as a trader. 
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Comments (13)

Ola

Hi Kirk, Can you please mention what was the time period that you backtested those strategies over? You mention those 500-670% returns but the period of time you testes is not mentioned in the podcast. Many thanks in advance. Best, Ola

Jun 9th
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fresh mannn

speaking of the scarcity mindset, be sure to look into Andrew Yang and his book “The War on Normal People”. Great ep Kirk

Nov 4th
Reply (1)

Ian Buell

Great episode!

Oct 22nd
Reply (1)

Jerrod Zertuche

loved this episode! always learn something with these. thank you Kirk!

May 15th
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Steven Ellenbogen

in my opinion the Option Alpha podcast is the best of breed. you owe it to yourself to take advantage of this free quality education

May 1st
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Robert Wollenberg

Before listening to this podcast I understood buying and selling options. Just the basics. I'm up to episode 68 or so right now and I understand so much more. Some episodes I listen to repeatedly for days to make sure I'm absorbing the bulk of the message. I take notes as well when I can. I would highly recommend this podcast to anybody interested in options. I look forward to the rest of the podcasts and hopefully joining the site soon as well. Thank you Kirk for all you do.

Apr 24th
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Jake Luttrell

Thanks for everything you do, Kirk. This podcast is great just like the rest of your content.

Oct 28th
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Krishna Bhat

Great Podcast Kirk. I started from episode 1 and am on Episode 35. Very methodical in your approach and I have found every episode insightful. Keep up the good work.

Mar 25th
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Matt snow

Kirk I have been listening to you for about a month and recently became a member of your service. Your teaching and explanations have helped me demystify options and gave permitted me to correct some errors I was making. Thanks so much. Great service folks!

Feb 25th
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Sharla Grossie

I'm so glad I found your podcast! I listen to them all the time and take notes. I am also a student of your online courses. You give sound advice in this episode by telling us to teach someone who isn't involved with options. I find this method of learning very helpful! Thanks for all you do! Keep up the good work!

Feb 22nd
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Jas Bhatiwal

Hi Kirk, this is a great Podcast that I have begun listening too, information and explanation is invaluable. thanks Jas

Nov 8th
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