Nirvana’s
OptionTrader
Amazingly Accurate New Mechanical
Options Strategies!
Plus: The NEW Visual Volatility Tool
NEW Harnessing the Power of Options Course
Ed Downs Will Teach You How To:
Maximize Profits:
Directional Option Trading
Generate Income:
Income Producing Strategies
pgs 8-10
4 Weeks of Options Trading with Ed Himself!
Live in the Market Option Trading Starts May 12th.
Learn how to:
• Sell Covered Calls • The Option Ladder
• Buy-Writes • And More!
Discover the Power of Options
- with OptionTrader
Ed Downs
CEO and Founder,
Nirvana Systems, Inc.
Since I founded Nirvana in 1987, my team and I
have primarily been focused on building systems and
tools for trading stocks and futures. But in seminars
and email correspondence over the years, users were
continually asking me, “When are you going to create
an options program?”
When I asked them, “How do you identify an option
trade now?” the vast majority said, “From a Trading
Signal on the underlying stock!” That’s when I
realized we already had the perfect options platforms
in OmniTrader and VisualTrader. We just needed an
easy way for people to trade options on their Signals.
OptionTrader is based on the novel concept of using
chart levels to determine the best options to trade.
Given a Profit and Loss Target, the software will
automatically evaluate every option trading method
using current option pricing to show you which
option trades will make the most money with the
least risk. Then, you simply place the trade right in
the chart. What could be easier?
As far as I know, OptionTrader is also the only
program that lets you automatically test any Trading
Strategy on popular options methods across a
portfolio of symbols. It’s how we developed the
mechanical Strategies that are in OptionTrader 3.
Introducing OptionTrader 3
Today we are releasing OptionTrader 3. This
new version has several important improvements,
including four new mechanical Strategies that show
much better performance than equivalent non-option
Strategies. Read about them on pages 6-7.
We also added the Visual Volatility Tool, a 3D image
of volatility across all option contracts on a symbol.
With it, you will see which contracts are expensive or
under-priced relative to the market. One glance
before placing a trade could keep you from paying too
much, or help you identify situations where selling
Premium has a high probability of generating income.
I have been doing extensive testing in the
VisualTrader Simulator on two different approaches
to trading options – Directional Strategies and
Income Producing Strategies. Harnessing the Power
of Options with OptionTrader 3 is a new course in
which I cover each of these topics in detail. It’s not
just about option trading. I cover the entire process –
from scanning for candidates and generating Signals
to using OptionTrader 3 to trade the opportunities.
LIVE in-the-Market Trading Webinars
In May 2015, for those who purchase our Ultimate
Options Trading Package, I am hosting live, in-themarket options trading webinars twice each week
(also recorded) in which we will trade the live market
using the concepts taught in the course.
In the webinars, we will place trades and monitor our
trading progress week by week, discussing what went
well in addition to what we could have done better.
I’m looking forward to demonstrating the profit
power of options as we engage the market together!
From all my research and trading, it is clear to me
that trading options is the best way to engage the
market. If you want your option trading to be as easy
and profitable as possible, you need OptionTrader 3.
Sincerely,
Ed Downs
CEO and Founder,
Nirvana Systems, Inc.
The Power of Options!
Why trade Options?
Bigger Profits. Same Risk.
Options provide the best
of all worlds. With options
you can:
An example of how trading options can be more profitable than trading
equities—with similar risk exposure.
• Increase Profits
• Generate Income
• Limit your Overall Risk
Options can dramatically increase
trading profits. In the example to the
right, we compare the same trades on the
stock versus selling options. Profits were
nearly three times higher trading options,
while losses were about the same.
We can also use options to generate
income in our accounts, by selling time
premium to the market using Covered
Calls, Butterflies and other methods.
All you have to do is decide which
approach to take for a given chart…
Harnessing the Power of
Options with OptionTrader 3
We designed OptionTrader to simplify
the option trading process. Given a
goal, the software will tell you which
option method to apply.
How do you know when to generate
income vs. placing a directional trade?
How do you establish your chart
levels? These questions and more are
answered in Ed’s Course.
OptionTrader 3 is the best options
trading platform in the world.
Combined with the new Options
Course, you will be able to engage the
options market with confidence. We
guarantee it!
The Reversal Strategy generated
these Signals on Amazon. The table
compares trading the Stock vs.
selling Puts and Calls. Profits were
nearly three times higher trading
options, while losses were about
the same. This is just one of the
“eye-opening” facts you’ll discover
in OptionTrader 3.
Date
5/12
6/13
9/25
10/15
10/29
12/2
1/22
Signal
Long
Short
Long
Long
Long
Short
Long
Trade Stock
Sell Puts & Calls
Margin %PL
147.15 0.95%
163.53
1.14%
164.00 -2.33%
152.18 2.93%
149.56 -0.81%
163.75
4.73%
150.00 15.44%
Margin
$72.33
$81.41
$74.19
$78.35
$65.57
$77.52
$65.37
%PL
5.34%
5.52%
-3.69%
7.5%
0.05%
11.22%
19.64%
The OptionTrader Advantage
Option Trading Made Easy ................................................................ 4
Win in the Options Market with OptionTrader 3
New Options Strategies Maximize Returns......................................... 6
New Strategies and Tools to Supercharge Your Trading
Harnessing the Power of Options...................................................... 8
A New Course by Ed Downs
Ultimate Option Trading Package Bonus .......................................... 10
4 Weeks of Options Trading with Ed Downs!
3
At last...
1
Establish a Target
Point Range Dbl Range
Trading options is easy with OptionTrader 3.
Just place a Target where you think the chart
could go and set the Loss Level where you
would get out of the trade. In this case, we
feel Cisco Systems (CSCO) will likely rally
to its prior highs. So, we placed our Profit
Target near 30 and the Loss Level halfway
to recent support.
Target
To get the best answer, we provide three
different types of targets – Point, Range and
Double Target. In our Harnessing the Power of
Options with OptionTrader 3 Course, we show
you how to establish a Profit Target and Loss
level for a variety of different chart situations.
2
Loss Level
Select the Best Option
OptionFinder analyzes all the popular Option
Methods using the Target and Loss levels
established in Step 1.
The upper grid sorts the Option Methods based
on profitability. The lower grid shows potential
trades within a selected Method, also sorted
on profitability.
In this example for CSCO, OptionFinder
is telling us that Diagonal Spreads have the
highest Percentage Gain values over all other
Option Methods we might use, based on the
given Target and Loss levels we established in
the chart.
Now, we can click specific Diagonal Spreads in
the lower grid to see the Expiration Graphs and
predicted Profit or Loss curves for any point in
the future.
4
Diagonal Spread has the
highest Percentage Gain
Top Diagonal Spread trades
Option Trading Made Easy!
3
Manage the Trade
Once you place the trade, you can use the Chart
to establish Stop Loss, Profit Target, or Trailing
Stop levels for the option position.
Stops can be based on Position Value or the
value of the Underlying Symbol. And, if you use
our integrated brokerage connections, execution
of all orders is totally automatic.
P&L Curves
Expiration Graphs
continued from previous page...
We note from the % Gain column
that the top two trades have nearly
the same Profit Potential of about
30%. However, by viewing the
Expiration Curves we quickly see that
the first trade’s profit levels decline
significantly at higher prices, while the
second trade maintains its profit. This
makes the Short Aug 32 Call, Long
Oct 29 Call a better candidate.
Short Aug 32 Call, Long Oct 30 Call
In our Harnessing the Power of Options
Course, we go over many examples of
using OptionFinder to select the best
trades in the live market.
Short Aug 32 Call, Long Oct 29 Call
Profit holds up at
higher prices
With OptionFinder it takes just
seconds to find the best trade, within
the best Option Method for any chart,
while it educates you on the merits
of each Method. No other option
software makes it this easy to select
the best Option Method to trade.
5
New Options Strategies Maximize Ret
New Options Strategies are the
perfect starting point for Directional
Options Trading.
In OptionTrader 3, we are now including FOUR
mechanical options trading strategies. The strategies
identify points where directional options trading
yields a significant advantage.
Extended Moves (Debit
Spread) Trade on AIG
Swing Trade with Options
The first two Strategies incorporate options writing
approaches to capitalize on the quick moves
associated with Swing Trading.
• Swing Trading (Credit Spread)
• Swing Trading (Naked Puts)
The two Swing Strategies are designed to have a
two-fold path to profitability:
1.) They sell options when options prices are high.
2.) They trade to capture the expected swing move in the chart.
When you put these two advantages together, you
end up with an extremely powerful directional
options writing strategy that produces major results
51% Return over
the past Two Years
UP 146% in Three Weeks!
The Extended Moves (Debit Spread) Strategy captures a big
gain on AIG. The stock itself moved up 6.6%, but the debit
spread picked up 146% in just three weeks.
Trade the Extended Move
The second two options strategies find slightly longer
term trading opportunities, and buy options to increase
leverage while limiting risk.
• Extended Moves (Long Option)
• Extended Moves (Debit Spread)
The Long Option Strategy chooses the optimal strike for
the extended move expected in the chart. The trade is then
managed with a trailing stop to capture the whole move.
This combination allows the strategy to maximize gains
and control risk.
The Debit Spread Strategy employs a similar approach,
but sells an additional call option to lower the overall cost
of entry, and increase the probability of success.
The Strategies purchase options when they are relatively
cheap, and the stock is likely to make an extended move.
This allows these strategies to produce huge percentage
gains, like you see in the chart of AIG (above).
Equity Curve showing the performance of the Swing Trading
(Naked Puts) Strategy trading options on the symbols in the
S&P100 over the past two years. The Strategy returns 51%
over this time period with a maximum drawdown of only 7.3%.
6
turns for Swing and Extended Trades!
Four NEW Option TradePlans
The new Strategies in OptionTrader 3 use specific
directional Trade Plans that are optimized for
Directional Trading with Options. But they aren’t
just for these strategies. The Trade Plans can also be
used to help manage any Directional Options Trade.
This helps you realize the maximum profit potential
on all your directional options positions:
•
•
•
•
The Swing Credit Spread Trade
Plan boosts the profitablity
of RTM7 Signals.
+11%
Swing Naked Write
Swing Credit Spread
Extended Moves Debit Spread
Extended Moves Long Option
The Trade Plans use OptionFinder’s search
algorithm to determine the best options for a given
setup, then manage that trade with exits that are
designed to capture gains for the given setup.
When used with your favorite signals, our new
Options TradePlans take the guesswork out of
Directional Trading with Options.
+12%
+7%
In this example, the Swing Credit Spread Trade Plan nets just over 30% on
Signals from RTM7.
The NEW Visual Volatility Tool
Designed to Keep You on the Right Side of the Trade!
Our new Visual Volatility Tool lets you see which options
in the chain are relatively cheap and which ones are too
expensive. You can use this information to ensure you
are always buying the ones that are cheap and selling
options that are overpriced.
These Options are too
expensive. Look to sell them.
These Options are relatively cheap.
Look to purchase them.
m
Ti
The Visualizer also has an animated playback feature
that allows you to see how the volatility surface changes
from day to day, and helps you avoid the costly surprises
that can come from an abrupt change in volatility.
e
to
Ex
pi
ra
tio
n
Strike Pri
ce
This feature brings the rocket science of options analysis
into a simple, easy to understand plot, and takes the
guesswork out of monitoring options volatility.
7
Harnessing the Power of
– A NEW Trading Course by Ed Downs
Maximize Your Profits with
Directional Options Trading
Most people are familiar with buying a Call Option on a stock when they think it is going
up. But there are other option strategies that can be less risky and generate higher, more
consistent returns over the course of many trades.
In Part One, we thoroughly cover Directional Option Trading. I’ll show you which Setups
lend themselves to the most profitable trades. Then, I’ll show you how to set Profit and
Loss targets so OptionTrader can find the best Strategies.
Options are the least understood
financial vehicles available to
traders and investors. “Expiration
Curves” and “the Greeks” are
not intuitive to most people.
OptionTrader changes
all that.
Some of the topics we cover:
I am now convinced, more than
ever before – if you want to make
consistent profits, options
are the way to go.
• In the money vs. out of the money.
• How to set optimal targets from a few simple chart measurements.
• When Buying Calls is the best strategy – and when it’s not.
• How Credit Spreads can provide a unique advantage.
• A simple bullish strategy that can provide more overnight leverage
- with the same risk - as buying the underlying stock.
• And much more…
Once you SEE the Power of
Options first-hand, and truly
UNDERSTAND how to apply
them using this incredible tool, your
trading will be forever transformed.
Reducing Risk is
Important. But so is
Making Money!
We know that trading options can
be less risky than trading stocks or
futures, because with most Option
Strategies, your risk is known going
into a trade. But we also want to
know HOW TO MAKE THE
MOST MONEY.
60% Gain if the
stock doesn’t
move up at all.
Here is a Credit Spread on XOM. This could be a great trade. But even if the stock goes nowhere for
6 weeks – I will make 60% on the margin that is required to place it. And my downside risk is limited.
This is just one of the many money-making approaches we will cover.
8
Options with OptionTrader
“Making Options Trading SIMPLE AND PROFITABLE.”
Generate Consistent
Income Using Options
Perhaps the most popular use of options is to produce income. I have been to financial
seminars that ONLY teach “Selling Covered Calls”. It’s a great way to generate income when
you own optionable equities.
But Selling Covered Calls is just the tip of the Income-Producing iceberg! Once you start
applying OptionTrader, more Strategies will emerge as optimal, including Condors, BuyWrites, and Strangles.
The beautiful thing about OptionTrader is it can show you which Income Producing Strategy
makes sense for a given chart. All you have to do is provide a few simple levels on the chart,
which is what we cover in this course.
In Part two we will cover these important income-producing approaches:
• Selling Covered Calls: What is the Optimal Time to Sell?
• The Option Ladder: Trade these stocks and pocket gains week after week after week.
• Buy-Writes: How to reduce your risk on every investment.
Depending on the situation,
you can often generate higher
returns with little or no increase
in overall risk by using an Option
Strategy. In this course I will
show you a variety of ways to
accomplish this with simple, easy
to understand methods.
We devote Part One to covering
“speculative” approaches to
directional options trading. Then, in
the second part, we help you round
out your repertoire with powerful
“income-producing” strategies.
With these two approaches, this
course will form a solid foundation
that lets you immediately begin
trading the options market with
OptionTrader.
My Number One Goal is to make
options trading simple AND
profitable for everyone who owns
OptionTrader 3. This course
will get you excited about trading
options. I guarantee it!
Then, you and I are going to
engage the market together, in
my first LIVE Options Coaching
Sessions, as described on the
next page.
Solid income
with low risk
In this chart for CNP, we identified a Strangle that will generate solid profits if the stock ends up in a
wide trading range, but very small losses if it moves outside this range.
9
4 Weeks of Options Trading with Ed Himself!
It’s Just You, Me, and the Market.
My objective in Harnessing the Power of Options will be to show you
how to quickly and easily spot the best option trading opportunities.
It’s actually very easy to do that with OptionTrader 3!
But we all know that Powerpoint Slides and even historical
simulations are not the same as “the Hard Right Edge.” So, I’ve
decided to host a solid month of actual options trading.
Twice a week, for four
weeks beginning May 12…
I will hold live sessions in which I discuss the
actual candidates I am trading and walk through
each trading decision using the software.
After the first session, we will begin each time with a
review of our trading progress and talk about what went
right as well as what we could have done better. These
will be LIVE trades in my actual trading account.
This is the first time since our Omni Trader University
courses that I have ever held a continuous trading venue
with users. I’m limiting attendance because I want to be
able to interact with each student personally.
Let’s make hay in the month of May! I look forward to
seeing you in my sessions, starting May 12.
Sincerely,
Getting Started
with Options
Using OptionTrader 3
This CD seminar, included FREE with the
software, covers the entire spectrum of product usage
and option trading for those who are new to the art.
Part I provides a quick overview of options. Because we use the options simulator, the
concepts are quick and easy to grasp.
Part II goes over every aspect of using the software, from setting up your data account to
trading with the Visual Brokerage feature of OmniTrader and VisualTrader. We also cover
OptionFinder and other advanced features.
In Part III we go under the hood to discover how to add Option Trade Plans to our
Strategies and how the Option Engine works. This feature allows OptionTrader to find
the best Options Strategy. We also cover option strategy testing in the Portfolio Simulator.
10
Seminar Agenda
I. An Options Primer
· Options as an Investment
· Why Some Traders Lose Money
Trading Options, and How to Avoid it!
· Options Method Overview
II. Using OptionTrader
· Setting Up the Software
· Activating in a Chart
· Setting Targets
· Trading Option Positions
III. Options Trade Plans
· How Options Plans Work
· Adding Options Plans to a Strategy
· Testing the Strategy
· Portfolio Simulations
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