Charles Cottle is a professional options trader, author and creator of http://riskdoctor.com/. Charles teaches two group mentoring sessions each month and covers a wide variety of topics for options traders in his mentoring.
- The program is not just about learning new option strategies, but it also teaches tools, techniques, market timing, and options mastery skills to help you succeed in any market condition.
- Unless you have personally done deep-dive mentoring sessions with Ali or Charles Cottle, some of the tools and techniques will probably be nothing like what you have seen elsewhere.
- As you go deeper into the program, you will see how both Charles and Ali think & trade very differently from most option traders and educators.
- The program is not for beginners or those with less than 1 year of options trading experience.
- Each month has a main theme and the following months, even though somewhat independent, build on the knowledge from prior months.
- In addition to the main theme of the month, additional tools, techniques, and insights are also taught each month.
- A couple of paper accounts were setup to provide near-real time trades via email notification to demonstrate the strategies, tools, and techniques. This is not meant to be a trade recommendation service. It was not designed for that. Each month, Ali focuses mostly on paper trades that demonstrate what is taught for that month. The purpose of the paper accounts is to show examples and document Ali's thinking process to enhance the learning experience.
- Private forums are provided for discussion for current subscribers. One of them documents each paper trade. There are other forums dedicated to other topics include student trades, that are submitted for analysis and feedback.
- Charles provides two sessions per month that go for about 1:30. Ali also does the same for total of four sessions per month. You have the choice of having both or one of them, as a mentor. Some months may include a bonus session. For example, during Month 3, Ali did a bonus Q&A session.
- The sessions are only one part of the program. You’ll have access to Charles and Ali via email, which as mentioned above are a huge part of the program that allow for on-going education throughout each month.
Subscribe to Charles's Group Mentoring
Join Charles Cottle each month as he teaches two group mentoring sessions. You'll have access to private forums to talk to Charles Cottle and Ali Pashaei, as well as other students.
All billing cycles are adjusted to the first day of the following month. You'll receive all of this month's training.
Join Charles Cottle's Monthly Group Mentoring
Purchase Previous Month's of Charles's Training
Month 1 – May 2018
Month 1
Position Dissection
Position Dissection is a risk analysis technique to identify subcomponent, simpler spreads, within an esoteric spread.
Why would you want to dissect a position?
Because these subcomponent spreads can be traded to eliminate unwanted risk exposure and to take profits on subcomponent spreads. Since Verticals and Butterflies have minimum and maximum values, nearly Maximized Longs and Minimized Shorts can be harvested so as not to give back profits, on these subcomponents, to the market.
One of the simplest spreads is a Vertical (Bull Spread or a Bear Spread) that consists of 2 opposing contracts, one long the market and one short the market.
There is nothing to dissect in this case because it is as simple as can be.
When there are 3 different contract strikes in a more complex position, such as a Butterfly, it is possible to view it as 2 simpler spreads, a Bull Spread versus a Bear Spread, where each spread shares a common strike price.
When there are 4 different contract strikes in an even more complex position, such as a Condor, it also is possible to view it as 2 simpler spreads, again, a Bull Spread versus a Bear Spread, but they do not share a common strike price. It is also possible, in this case, to see it as 2 adjacent Butterflies.
When you change the ratios of Long contracts to Short contracts, then Position Dissection can reveal many other sub-component spread variations.
The problem of bad quotes was discussed and how to get around the problem by smoothing the data and understanding where fair prices belong.
Fibonacci Numbers
In mathematics, the Fibonacci numbers are the numbers in the following integer sequence, called the Fibonacci sequence, and characterized by the fact that every number after the first two is the sum of the two preceding ones:
- 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc.
- Golden Ratio: 1 divided by .618 is 1.618. Take any of the integers and multiply it by 1.618 and you get the next integer. Multiply any integer by .618 and you get the integer to the left.
- Common Trading Ratios
- Subtract .618 from 1 and you get .38
- .618 squared is also .382
- The square root of .618 is .786
- The square root of 1.618 is 1.272
- 1.618 squared is 2.618
- Uncommond Trading Ratios
- .382 x .618 is .236
- .618 – .382 is also .236
- 1.618 x 2.618 is 4.236
- Retracements
- The good old fashioned 50% and 100% retracements
- Common retracements
- .382
- .618
- .786
- Common extensions
- 1.272
- 1.618
- 2.618
Month 2 – June 2018
Month 2
Finding Better Ways
What is the Diff? What is the difference between a;
- Butterfly and a Condor (Short Answer: Another Butterfly)
- Butterfly and Wider Butterfly (Short Answer: Other Embedded Butterflies)
- Condor and Wider Condor (Short Answer: Other Embedded Condors or Butterflies)
- Butterfly and BrokenWing Condor (Short Answer: Vertical)
- Butterfly and Iron Condor (Short Answer: Box)
- Straddle and Strangle (Short Answer: Butterfly)
- Vertical and the next Vertical (Short Answer: Butterfly)
- Calendar and Wider Calendar (Short Answer: Other Embedded Calendars)
- Diagonal and Vertical (Short Answer: Calendar)
- Diagonal and Calendar (Short Answer: Vertical)
- Straddle in One Month vs A Straddle in Another Month (Short Answer: 2 Calendars)
- Straddle at One Strike vs A Straddle at Another Strike (Short Answer: 2 Verticals)
HPE Covered Call
Put Credit Spread vs. Naked Short Put or Covered Call
Pretend there is a 10:1 Reverse Stock Split before you Judge
Excerpt from “margin efficiency“
Consider a closer spread for a few pennies more.
Verticals have Cool Bedfellows
TSLA Broken Wing Butterfly
SPX Broken Wing Butterfly
Finding Better Ways Part 2
Homework: SPX Broken Wing Butterfly
In/Out Verticals – Potential Challenges and Solutions NVDA Jul 13 Trend Trade: Potential Trade
Adjustment AAPL Aug 17 Trend Trade
WYNN Trade BIDU Trade
SBUX Trade
Month 3 – July 2018
Wing Spread Behavior
Trade Review
- BIDU
- SBUX
- GLC & SLV
- WYNN
- Hedge: VIX
Butterfly Behavior
When strikes too close…
Which vertical to be short on a BWB? What’s the Diff between them?
2 Excel Spread Sheets. The Animated one in front of one for labeling:
Butterfly-Ni-City of RUT Road Trip Trade
Wing Spread Behavior Part 2
Trade Review
- BIDU
- SBUX
- GLC & SLV
- WYNN
- Hedge: VIX
Butterfly Behavior
Month 4 – August 2018
Multi-Month Strategies
Calendar Properties
Calendar Properties – P&L Profiles
- Similarities and Differences to Butterfly
- Calendars in Indexes and Futures vs. Time Spreads in Equities
- Margins: Longs vs. Shorts
- Double Calendar
Calendar Pricing:
- Time Spread
- Jelly Roll
- Time Butterfly
Calendar Dissection
Diagonal Properties – P&L Profiles
- Double Diagonals (AKA Straddle Strangle Swap) or Iron Calendar
Diagonal Dissection
Multi-Month Strategies Part 2
NVDA Calendars Going Into Earnings and Beyond
- From (Ali’s Last Class on August 21st) Iqbal Sandhu to Everyone: 9:28 PM (EST)
- “So, one has to observe calendar pricing everyday to get familiar with what is cheap and expensive. Like buying groceries.”
Vega Neutral SPX 16 Deferred Month Straddles vs. 100 Closer Butterflies
For Margin Purposes, Short Calendar Alternative
- Vega Neutral 6 SPX 100 Deferred Month Butterflies vs. 16 Closer Month Straddles
Month 5 – September 2018
Hedging Considerations
Common Hedge Structures
- Covered Write
- Married Put
- Combo Hedge
- Zero Cost Bull Collars
- Debit and Credit Bull Collars
UnCommon Hedge Structures
- Zero Cost Bull Collars
- Debit and Credit Bear Collars
Alternative Hedge Structures (AHS)
- AHS should emulate OOS. Options Only Strategies (OOS) is what successful consistent profitable options traders do.
- It only makes sense that Hedgers turn their stock positions into those successful structures.
- When in Rome, do what the Romans do
- WingSpread Hedges
- Butterfly Hedge
- CondorHedge
- BrokenWingHedge
- Covered Write Lightning Strikes
- SlingshotHedges
- CalendarHedge
- DiagonalHedge
- IronCalendarHedge
Other Considerations
If your options (hedge) position could talk, what would it say or ask?
- It would tell you it’s concerns and ask you what can happen to it while hoping it all works out, such as;
- How far do you think the underlying could go up (down)?
- What is your 1st target to take profits? 2nd Target? 3rd Target?
- Where would you get out — place your stop?
- Does your options (hedge) position have any embedded synthetic spread components that may be too cheap to be short or too rich to be long?
If you are long a stock that is a candidate for Swing Trading, what can you do? Think about this during the rest of today’s presentation.
The Second Half of September through to the end 2018
Charles demonstrated how to manage a hypothetical $1.4M Portfolio of 10 Stocks by hedging them using Alternative Hedging Strategies (AHs) based on Diamonetric Grid Technical Analysis in combination with Symmetry and Fibonacci Retracements / Extension Analysis.
Hedge Structure Determination Based on Market Structure*. Based on the charts that follow, we will pull up the options chains and construct the appropriate hedge according to prices available for each scenario.
- Bullish Hedge Candidates — If the Stock is above all stacked Moving Averages with each shorter time-frame above the next.
- AAPL, MSFT, NVDA, QQQ
- Mild Correction Hedge Candidates — If the stock is between the 50-Day and 200-Day Simple Moving Average (SMA) and/or the other MAs are crossed (not stacked in order).
- GOOGL, JPM
- Correction Hedge Candidates — If the Stock is at least 10% below the high and MAs are crossed (not stacked in order).
- FB, NFLX
- Bearish Hedge Candidates — If the Stock is below all stacked Moving Averages with each shorter time-frame below the next.
- BABA, WYNN
We managed trades and adjustments and followed in the Forum. All trades were AHS but could otherwise be done with OOS.
*All scenarios are not the same. Some stocks are closer to support and others are closer to resistanc
As of December 28th (One last trading day remaining in 2018) had the stocks been left alone, unhedged, the portfolio would have lost (25%). Instead the portfolio lost (0.32%) less than 1%. Covered Writes would have suffered perhaps by (20%), Bull Collars perhaps (5%). Having hedged into ButterflyHedge, CondorHedge, BrokenWingHedge, and DaBULL and DaBEAR Spread Hedge Configurations, the portfolio locked in over 99% of the value, all by October 3rd to avoid the huge Bear Market that began on October 4th.
