Success in trading comes from the ability to discover opportunities at a glance before these occur.
That way you can take advantage of market moves before these opportunities occur and achieve significant potential returns.
Buying stocks at such times can deliver considerable profit opportunities.
Financial returns can be increased even more by using the leverage of options
A number of stocks repeat well defined price patterns at certain times of the year.
As an example, if a stock has moved up an average of 5% in 18 of the past 20 years from 23
November to 7 December that presents a trading opportunity when the date nears Monday 23 November 2020.
This is where the education provided by ReliableOptionIncome.com (ROI) comes into its own.
ROI is about using options to achieve above average returns by taking advantage of price patterns which are repeated year after year.
ROI’s strategy is simple, easy to follow, rules based, reliable and very effective.
The New York Stock Exchange is the largest in the world with an equity market capitalisation above $25 trillion with more than 2,000 listed stocks. Next is NASDAQ with over 3,000 listed stocks (followed by the London SE and then the Tokyo SE).
At ROI we analyzed a large number of stocks to find price patterns which can be exploited for profit. We analyzed data going back more than 20 years.
This extensive analysis resulted in a list of “select” stocks which exhibited repetitive price patterns at certain times of the year.
In particular, we analyzed NYSE and NASDAQ stocks and ETF’s for price patterns within 7 day, 14 day and 30 day periods.
The 7 day period was selected to make use of opportunities offered by stocks with weekly options.
There are almost 500 stocks and some 100 ETF’s with weekly option series.
Weekly options are similar to monthly options, except they expire every Friday instead of the third Friday of each month. Weekly options have become extremely popular for trading, allowing traders to capitalize on short-term opportunities.
The 30 day period was selected for stock price patterns that occurred over one month, to fit in with traditional monthly option expirations while the 14 day stock price patterns were selected as a timeframe in-between the weekly and monthly option expiration periods.
The main objective of ROI is to deliver above average returns on a consistent and reliable basis with the use of options.
The successful ROI strategy was developed by two colleagues:-
Robert Jongebreur and Jignesh Joshi.
ROI was founded by Robert Jongebreur. Robert has an engineering and science background and completed his Masters in England. He has lived and worked in 6 countries and is based in Melbourne, Australia. After a career in banking and finance including a period as the founding MD of a stock exchange listed investment company he moved to business consulting. Robert is fascinated with option strategies and over the past 2 decades has tried out a host of option strategies from iron butterflies, to Elliott Wave, to Ichimoku Cloud and many other strategies. After many trials of various strategies he came back to the simple but successful ROI strategy based on probabilities.
Jignesh Joshi has a strong background in mathematical modelling and together with Robert developed the formulas and macros needed to analyze large amounts of data on the NYSE and NASDAQ exchanges. Jignesh is based in Mumbai, India and has worked as an Operational Manager for several large European and USA companies. The two colleagues have worked together over the past 5 years and are assisted by several consultants for day to day support.
ROI is based on the simple, proven strategy that above average returns can be achieved by buying and selling stocks based on repetitive price patterns and that the prudent use of options can magnify these returns.
What can at times be hard to appreciate is that high probability trades (HPT) happen regardless of other events that inevitably occurred over the years.
Take a stock which increased an average of 5% in price in 18 of the past 20 years from 23 November to 7 December. This statistic (90% probability) holds true regardless of other events that occurred.
So this statistic holds true despite large market fluctuations (such as occurred during the GFC), some 80 quarterly earnings reports, stock splits that might have occurred, payment of dividends, including Presidential elections every 4 years from 2000, as well as major economic events that would have happened over those 20 years.
At ROI we believe that a successful trading system should be easy to follow, that it should be based on simple rules and that it should deliver profitable results on a regular, reliable basis.
There are more than 100 technical indicators that investors can use for guidance in making a trading decision. Additionally there is a host of economic data released every week while the business pages deliver a never ending stream of company news plus there are numerous commentaries from market pundits. No wonder that investors can get confused.
The market tries to digest a massive amount of information each and every day. This can be overwhelming.
While not entirely disregarding these, ROI’s view is simply that its analysis is based purely and simply on probabilities.
Thus, going back to the earlier example, a stock with a 90% probability of moving higher from 23 November to 7 December did so over the past 20 years despite the fact that a number of these events were occurring regularly and simultaneously as a “backdrop”.
ROI’s approach is that a decision to trade can be as simple as “will I buy shares, or options, in stock EEE which in two days time shows a 90% probability of moving higher in the following 7 days”?
One of the benefits of options is that 1 contract allows the investor to control 100 shares of stock.
The maximum loss in a long call or long put is the amount invested. An option account can be set up with as little as $500.
If the option costs $1.50, equal to $150 per contract, plus a small amount of commission, this allows the investor to purchase 3 different contracts of 3 different stocks at different times before the $500 is fully invested. However, it is highly unlikely that buying 3 such contracts, each where the stock has a 90% probability of moving higher (or lower for a put), will result in a loss on each of those 3 contracts. Based on probabilities, the upside is considerable while the downside is small.
ROI members are provided with data on stocks that are likely to move up (bullish) in the coming week with a probability of more than 80% or a probability of more than 75% of moving down (bearish).
The information is displayed on the ROI Graph in an format as shown below.
The above illustration shows the ROI Probability Graph for PG (Proctor & Gamble) with a number of %’s inside horizontal bars for the month of July.
The ROI Score is the highest % found in a blue bar. For the month of July this was 95% on 6 July. The colors of the horizontal bars range from light blue, to a darker blue and a dark blue and indicate 7, 14 and 30 day bullish opportunities based on probabilities.
The ROI Graph thus indicated multiple 7, 14 and 30 day profit opportunities starting 1 July.
The following price chart of PG from April to September 2020 showed that PG experienced a strong bull run from 1 July similar to what happened in more than 4 out of the past 5 years over the last 20 years. Will it happen again in 2021? No one knows. Based purely on probabilities it is more likely than not that it will. A word of warning, this is not a guarantee.
The chart shows that PG closed at $119.98 on 1 July 2020 and peaked at $133.79 on 4 September.
The ROI Graph below indicates bearish moves for PG in April.
The ROI Graph shows two red bars starting 16 and 17 April. The color red in a bar indicates that a stock is expected to move lower on the basis of probabilities.
In the ROI Graphs, blue bars (bullish) only occur for probabilities above 80% while red bars (bearish) only show up for probabilities above 75% (shown as -25% or less). Thus the -23% red bar for PG in the ROI Graph means that PG has a 77% (100% – 23%) chance of moving lower.
The previous price chart for PG from April to September 2020 showed that PG peaked at $124.69 on 17 April and moved sharply down from then on. PG actually moved down a massive 9.4% over the next 21 days from 17 April to 7 May.
The ROI Guide sets out in detail how to take advantage of bullish and bearish opportunities with the use of options.
In the PG examples this would have resulted, in most cases, in returns of more than 100% where options had been used to exploit bullish and bearish profit opportunities as forecast by the ROI Graph.
This list is provided to ROI members each Saturday before 11.00am Saturday Eastern Time. This allows ROI members to plan their trades before the market opens on the Monday.
Chapter 3 “How to interpret the ROI Calendar & the ROI Score “ is required reading. This chapter is about selecting the right option series, preferred strikes, expiration dates and risk/reward payoffs. The Guide is informative and simple to follow, to suit both the novice option trader as well as the more advanced option trader.
The market is always full of “noise” and it can be confusing at times to listen to contradictory statements from any number of sources. One benefit of the ROI system is its simplicity. Another benefit is that it looks forward to the week ahead and doesn’t worry about the vast mounts of commentary and analysis of what has been happening in the past few days or in recent weeks.
Trading is mainly about following a system. A system that suits your trading style. A system that works. And once you have found a system that works then stick to it. If it is simple and it works, such as ROI, there is no need to complicate it.
Trading options does not need to be complicated.
ROI is a system based on high probability trades. We cannot predict the future. The past is imperfect but it is the best guide we have. Hence, if a stock moved up in 18 of the past 20 years from one particular date to a later date that does not mean it is guaranteed to move up this year when that same date comes around. But based on probabilities there is a high chance but again no guarantee that it will do so this year from that same date.
There is a saying in the market “a rising tide lifts all boats”. Thus a bullish trade is likely to do even better when the overall market (typically the SPY) is bullish and the opposite is true as well i.e. a bearish trade is likely to do even better in a bearish market.
At times the market can gyrate wildly, swinging from large gains to large losses in a matter of days. To counteract this we like to have bullish and bearish High Probability Trades open at the same time. In normal times when the market is ranging in a fairly narrow band both the bullish and bearish trades, based on probabilities, should deliver a profit. However, if there is a large unexpected market swing, in either direction, profit on the bullish trade should exceed a possible loss on the bearish trade and vice versa thereby protecting the overall positions. This is covered in more detail in the ROI Guide.
The price of membership is $49/month which can be covered by just one successful high probability trade in a month.
The ROI Guide provides invaluable information about options, option series, strike prices, and the selection of call and put spreads. You get immediate access to the guide after becoming a member. The ROI Guide, by itself, is worth several months of membership
Benefits of ROI membership include:-
• Members are provided with a list of (up to 4) High Probability Trades
• These are provided each Saturday so Members can plan the week ahead
• Members are provided with valuable educational materials and trading
• Members are provided with simple to follow guides on selecting the best
• Members are provided with simple but important rules for managing risk
• Questions from members will be answered personally by Robert
Subscriptions can be cancelled at any time by giving at least one day’s notice prior to the monthly anniversary. Subscriptions can be cancelled by submitting a message on the Contact page or by email to the email address provided to members.