I Need To Be Honest, Things Are Not Good…

I Need To Be Honest, Things Are Not Good…

Posted On September 29, 2022 3:38 pm

Dear Reader,

There’s a lot to be concerned about in the markets right now.

Yesterday’s rally seems to have failed. I suspect it was just enthusiasm about the BOE intervention to stop a “Lehman Moment” in England.

But the Fed still seems to be dedicated to fighting inflation, so the momentary exuberance has just opened a window for people to sell.

As I said to Options360 subscribers today, if a reasonably orderly bear market and 5% interest rates can put us on the edge of a financial crisis, things are not good right now.

It’s the same lesson that never sticks…

Leverage increases returns, but it also increases risk! That means you ALWAYS need to be hedged.

For us that means…


Never! No matter how sure the trades, no matter how likely you are to win.

I won’t ever forget my first trade. A sure thing that was going to pay me $1,000 overnight ended up costing me $50,000 when it went against me.

Sure things are only “sure things” until they aren’t

If I could make that same trade again today — the trade that cost me $50k — I would’ve hedged the trade and collected $600 in premium and only lost $2,000 when it went against me. Maybe $3,000…

…but NOT $50,000!!

If you’re not familiar with the details of the trade I’m talking about, maybe I’ll share it again soon.

In the meantime, in Options360, we took some profits in a trade on TLT this morning, and I am waiting for the market to stop being schizophrenic so we can jump back in with both feet.

There are lots of trades I am watching, but before I risk subscribers’ money — and mine — I want to see how the SPY acts at the $3620-$362 support levels and how the 10-year at 4% affects the market.

Once we have that locked down, we can start booking profits again.

Right now is the perfect time to claim your trial subscription to Options360. It’s only $19, there’s no risk on your part…

And I have a feeling that when this uncertainty calms down — there will be a LOT of opportunity for us to jump on.

To Your Success,

About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.