The Weird Trading Trick That Wins Big and Wipes Out Losses: Hughes Optioneering Team Reveals
The Weird Trading Trick That Wins Big and Wipes Out Losses: Hughes Optioneering Team Reveals
Reveals…
The Weird
Trading Trick
That Wins Big and
Wipes Out Losses
Hughes Optioneering™
Welcome to the exciting world of option investing! Your Hughes Optioneering™ Team has
a combined total of over 60 years of investing experience and more than 25 years of
experience teaching investors how to trade options successfully.
We have taught thousands of people from all walks of life and backgrounds with no
investing experience to trade the Optioneering™ strategies . . . everyone from high
school dropouts to college professors, from cab drivers and construction workers to
attorneys and doctors.
Team member Lee Ridilla has helped people in over 30 countries from Australia to
Venezuela learn how to implement the Optioneering™ trading strategies. Lee’s teaching
expertise and guidance gives people with little or no experience the resources for
becoming successful traders. The knowledgeable and helpful Optioneering™ Team is
here to answer any questions or concerns you may have about learning to trade options.
We have but one goal. That goal is your success. We measure our success by your
success!
The Optioneering™ trading strategies have produced more than $6 million in actual,
documented profits over the past 10 years.
Team member Chuck Hughes started his option trading career with a $4,600 trading
account which was all he could scrape together at the time. But during his first two years
of trading, Chuck’s tax returns show a $460,164 income from trading options which was
more than he made the previous six years as an airline pilot! Copies of Chuck’s tax
returns showing a $460,164 income his first two years of trading follow.
Team members Ryan and Chuck Hughes were awarded a total of 12 World Trading
Championship trophies including seven first-place, four second-place and one third-place
finish. The World Trading Championship is a highly competitive, real money trading
contest in which competitors from around the globe display their trading skills trading
real money. All profit results are audited by CPAs before being posted on the sponsor’s
website.
Despite the difficult market conditions last year, Chuck had a 339.8% real time return
trading the Optioneering™ strategies with a second-place finish in the trading contest.
Chuck has more first place finishes in the trading contest than any other trader in the
history of the competition.
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We are not showing you these profit results to “brag”. The reason we’re showing you is
to build your confidence in the Optioneering™ strategies. Because they really do work...
and there is no reason they can’t work for you as well. We are showing you actual profit
results so you can feel comfortable and confident that you are learning from someone
who knows what they’re talking about!
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$460,164 Option Profits Year 2
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Keep It Simple
Contrary to what you may have learned, option trading does not have to be complicated.
Our mantra is to keep it simple. Options are ‘derivatives’ that derive their value from the
price of the underlying stock.
A lot has been published about option strategies that invest in options based on whether
an option is under-valued or over-valued according to the Black-Scholes Pricing Model.
These option strategies are very complex and require high-level mathematical
calculations to compute an option’s Alpha, Beta, Delta, Gamma or Theta.
We never understood the logic of investing in an option because it was slightly under
valued at the time of purchase. Under-valued options can become more under-valued.
The price movement of the underlying stock determines an option’s value and
the resulting profit/loss for an option trade.
When you purchase a call option, your profits are determined by the price movement of
the underlying stock. If we can select a stock moving up in price, purchasing a call
option on that stock can produce enormous profits and will allow us to harness the
leverage provided from option investing.
We have used a simple trend following system successfully for decades to measure the
price movement of a stock. If a stock is moving up in price, that stock is on a ‘buy’
signal. If a stock is moving down in price, that stock is on a ‘sell’ signal. We have two
simple rules:
It’s that simple. Everything else is just noise. It only takes a minute on the internet to
pull up a daily price chart on a stock and determine if that stock is on a buy signal or a
sell signal.
Using a trend following system allows us to follow the current price trend of a stock
instead of trying to predict future price movement. A trend following system also
eliminates emotional decision making and instead gives us the discipline needed to be
successful option traders.
Our simple trend following system has contributed to more than $6 million in actual
trading profits over the past ten years in all types of market conditions and continues to
perform well. Our brokerage account Profit/Loss Reports that follow show that we
currently have more than $1.7 million in option profits using our trend following system.
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Trend Following Option Strategy
Produces $1.7 Million in Actual Profits
With An Average Return of 223.5%
Copies of our brokerage account Profit/Loss Reports for two of our trading accounts that
follow show that we currently have a total of $1,756,533.72 in open trade profits. There
are 18 winning trades and no losing trades resulting in 100% accuracy. The average
return for our two accounts is 223.5%.
Note: The actual profit results presented here may vary with the actual profit results presented in
other Legacy Publishing LLC publications due to the different strategies and time frames
presented in other publications. The cost basis for some of the options in this portfolio may be
reduced by rolling over profits at option expiration which is one of the Hughes Optioneering Trade
Management Rules.
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Trading Account #2 $400,481.66 Profit
Note: The actual profit results presented here may vary with the actual profit results presented in
other Legacy Publishing LLC publications due to the different strategies and time frames
presented in other publications. The cost basis for some of the options in this portfolio may be
reduced by rolling over profits at option expiration which is one of the Hughes Optioneering Trade
Management Rules.
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No Experience Needed
We have found that just about anybody can learn the Optioneering™ trading strategies
as long as they understand the basics of options trading. And if you don’t understand
options, then no problem . . . We have the resources to teach you what you need to
know.
This guidebook is short and simple . . . teaching you only what you need to know about
options and none of the complicated theories you don’t need. It gives you the practical,
real-world knowledge required in order to successfully trade options.
You don’t need to know complicated math or formulas like you have probably been led to
believe. You just need to know the simple mechanics of buying and selling options. And
this guide breaks options trading down to the bare essentials you need. It even includes
quizzes to make sure you understand each topic.
These three brokerage houses have provided us with excellent telephone support over
the years if we have a question about our option trade or if we want to give a broker an
option order over the phone. Option specialists are available to help with option orders.
Options can be traded in most standard brokerage accounts and is similar to trading
stocks like Apple or Microsoft. When you trade stocks, you only make money when the
stock price goes up. One of the great advantages of option trading is that you can profit
if the price of the underlying stock goes up, down, or even sideways.
Another advantage of option trading is that you can start small. We will see shortly that
trading a portfolio of 12 options using the strategy presented in this Report requires less
than a $2,000 trading account. Also, options can be traded in most retirement accounts
just as the Optioneering™ Team does in their retirement accounts.
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We know from experience that it is very difficult to watch a winning trade develop into a
losing trade. This is very hard on your psyche as a trader and can help you lose
confidence in your ability to be a successful trader.
Purchasing put option insurance transforms option investing from one of the riskiest
investments in the investment universe to one of the lowest risk investments.
Once you buy the put option protection for your call option investment, you can forget
about your option trade! No need to monitor the markets or world events. Bad earnings
reports don’t matter. A severe selloff in the markets actually produces more profits with
this strategy. You can place the trade and take a vacation!
There are plenty of new profit opportunities available every day with the Optioneering™
Market Neutral Strategy. There are two versions of this Strategy. The Option Version of
this Strategy is implemented by purchasing a call option and a put option. The Stock
Version of this Strategy is implemented by purchasing stock and a put option.
This is the lowest risk, highest profit way to invest in stocks or options that we have
discovered over decades of trading experience. Let’s take a look at one of our online
brokerage account Profit/Loss Reports so you can get an idea of how powerful the
Optioneering™ Market Neutral Strategy can be. This Report lists the trades for the
Option Version of this strategy that is implemented by purchasing a call option and a put
option. We will look at the Stock Version of this strategy shortly.
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Quadrupling Our Investment
Our brokerage account Profit/Loss Report below shows that we have an average return
of 422.8% for the CIGNA, Costco, Johnson and Johnson, Starbucks, Wells Fargo and
Yahoo Market Neutral option spread trades.
Note: The actual profit results presented here may vary with the actual profit results presented in
other Legacy Publishing LLC publications due to the different strategies and time frames
presented in other publications. The cost basis for some of the options in this portfolio may be
reduced by rolling over profits at option expiration which is one of the Hughes Optioneering Trade
Management Rules.
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CIGNA Market Neutral Spread
Let’s now focus on the first trade in our portfolio for CIGNA stock symbol CI. CIGNA was
on a trend following ‘buy’ signal so our online brokerage account report below shows that
we purchased the CI 70-Strike call option for 1.885 points or $188.50.
CIGNA stock moved up in price after our call purchase so we have a profitable trade. We
then faced the trading dilemma. Do you hold on to a winning call option trade for further
upside profit potential or do you take profits in case CIGNA stock declines in price with
the possibility of a profitable option trade turning into a loss?
We then purchased a CIGNA put option which allowed us to lock in profits for our call
option trade no matter what happens and at the same time does not limit the upside
profit potential of the call option if CIGNA stock continues to increase in price. We
‘legged in’ to a Market Neutral Spread by purchasing the CI 77.5-Strike put option.
Our online brokerage account report below shows that we purchased the CI 77.5-Strike
put option for 1.615 points or $161.50.
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Option Calculators
The Hughes Optioneering™ Team designed a series of calculators to calculate the profit
potential for six different types of option trades including the Market Neutral Strategy
trades. These calculators allow us to know the profit/loss potential of an option trade
before we take the trade. The calculators calculate the profit potential for an option trade
based on the price change in the underlying stock at option expiration. As noted
previously, the price movement of the underlying stock determines the profit for an
option trade not using complicated mathematical formulas you may have been led to
believe.
The calculators allow us to know in advance the profit/loss potential for an option trade
before you take the trade. The six Hughes Optioneering™ Option Calculators are
available to members of our advisory service which we will discuss later in this Report.
The Market Neutral Calculator below shows the profit/loss potential for the CIGNA Market
Neutral trade assuming various prices changes in CIGNA stock at option expiration from
a 20% gain to a 100% decline in this example. CI stock was trading at 77.72 at the
time.
The first row labeled ‘% Change’ in the calculator below displays the +20% to -100%
assumed price changes for CI stock at option expiration (circled). The calculator will
calculate the profit/loss potential and percent return based on these CI stock price
changes.
The second row from the bottom labeled ‘Spread Profit’ lists the dollar profit potential for
the trade (circled) for the various assumed price changes. And the bottom row labeled
‘Spread % Return’ lists the percent return profit potential (circled).
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CIGNA Market Neutral Trade Profit Potential
Let’s examine in detail the profit potential for the CI Market Neutral trade. The Calculator
below shows that if CI stock price is flat at 77.72 at option expiration a $422 profit and a
120.6% return will be realized (circled). This is the minimum return for this trade no
matter what happens.
A 10% increase in CI stock results in a $1,976 profit and a 564.7% return (circled). And
a 40% decline in CI stock results in a $2,737 profit and a 781.9% return (circled). In the
unlikely event CI stock declined to zero it would still result in a $7,400 profit and a
2,114.3% return.
With the put option protection in place we don’t have to worry about protective stops,
bad earnings reports or big down moves in CI stock as we know big down moves result
in windfall profits.
Notice that profit potential for this trade is not capped. As CI stock moves up in price,
the profit potential for the trade continues to increase. And if CI stock moves down in
price, the profit potential for the trade also continues to increase.
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We utilized the Market Neutral Calculator to calculate the average profit potential for our
CIGNA, Costco, Johnson and Johnson, Starbucks, Wells Fargo and Yahoo Market Neutral
trades.
Note: The actual profit results presented here may vary with the actual profit results presented in
other Legacy Publishing LLC publications due to the different strategies and time frames
presented in other publications. The cost basis for some of the options in this portfolio may be
reduced by rolling over profits at option expiration which is one of the Hughes Optioneering Trade
Management Rules.
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A 422.8% return is an excellent return under any circumstances! Let’s take a closer look
at the profit potential for this portfolio of Market Neutral trades. The table below
summarizes the profit potential for these trades.
We can see that if these stocks rally 10% on average at option expiration, the portfolio
will realize a 711% return (circled). A 20% increase in stock price would result in a
1,319% return. There is no limit on the profit potential with this strategy if the
underlying stocks continue to increase in price.
A 711% or 1,319% return would be great but what happens if there is a market selloff
and the profits in this portfolio turn into losses?
Let’s explain by using an example. Call options are heavily leveraged. If the underlying
stock is flat or declines 1% to 2% at option expiration, it can easily result in a 100%
loss for the call option.
The best way to insure your house against a loss from a fire is to buy fire insurance and
hope you never need the insurance. If there is no fire, the money you spend on the
insurance premium is well spent.
Similarly, the best way to protect your call option investment from loss due to a decline
in price of the underlying stock is to buy ‘option insurance’.
As noted previously, this is accomplished by purchasing a put option which profits as the
underlying stock declines in price.
The put option ‘insures’ you against loss of your call option investment in the event the
underlying stock declines in price. Remember if the underlying stock is flat or declines
slightly at option expiration, you could incur a total loss of your investment.
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With a house fire you can recover the cost of the house if you have fire insurance but
with the Market Neutral strategy a market sell off could result in recovering 10 to 20
times your initial investment!
Buying this put option insurance to protect your call option investment is a total game
changer as it changes option investing from a high risk investment to a low risk
investment.
A 40% decrease in underlying stock price would result in a 2,498% return. And in the
unlikely event that the stocks in this portfolio decline to zero a 6,148% return will be
realized.
The more the stocks in this portfolio increase or decline in price, the higher the profit
potential.
You can’t lose regardless of the price movement of the underlying stocks!
As veteran traders with decades of experience, we have been burned many times by
unexpected market declines.
If you have a highly leveraged option portfolio a sudden market decline could wipe you
out. End of game.
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And the worst feeling as a trader is to be sitting on a profitable portfolio only to see that
portfolio turn into a losing portfolio due to an unanticipated market decline. We can tell
you from experience this hard to get over and put behind you!
For example, recently Mastercard stock experienced sharp a selloff due to an unexpected
bad earnings report.
If we did not own the ‘insurance’ option we would have experienced a 100% loss for
our call option investment!
These types of selloffs occur on a regular basis. Regardless of which method or indicator
you use to select call option trades, unexpected selloffs can and do occur. This can easily
result in a total loss for your call option trade.
Bad earnings reports, disappointing unemployment reports, spikes in energy prices and
global geo political tensions can cause stock market declines that can decimate a highly
leveraged call option portfolio.
To us it is very comforting knowing our Market Neutral option portfolio is totally immune
to market selloffs. No more sleepless nights worrying about unexpected bad news.
Locking in profits no matter what happens in the markets allows us to eat well and sleep
well.
There is no need to monitor the markets and as noted previously, severe selloffs can
result in windfall profits.
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Stock Version
The Market Neutral strategy also works well with stocks. The Stock Version of the
strategy is implemented by purchasing stock and purchasing an ‘insurance’ put option
that protects the value of the stock in the event of a price decline.
The Stock Version of the strategy works particularly well with dividend paying stocks as
dividends received can help pay for the cost of the put option.
Let’s take a look at our online brokerage account Profit/Loss Report below that lists the
trades for the Stock Version of the strategy. The Report shows that we have a
$36,301.85 profit and an average return of 52.0%.
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You Can’t Lose!
Like the Market Neutral Option Portfolio, the Stock Version Portfolio can’t lose money
regardless of the price movement of the stocks.
Even in the unlikely event the stocks in this portfolio decline 50% we will still realize a
46.8% profit!
There is no limit on the profit potential of this portfolio if the stocks continue to increase
in price.
We receive $318 in annual dividends for each 100 shares of stock owned in this portfolio
which helps pay for the cost of the ‘insurance’ put options.
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$379,363.80 Profit in Retirement Accounts
The Option Version and Stock Version of the Market Neutral strategy are so low risk that
they can be traded in most retirement accounts.
We have two different types of retirement accounts in which we trade both the Option
Version and Stock Version of the Market Neutral Strategy.
The brokerage account Profit/Loss Reports that follow show that we currently have
$379,363.80 in total profits in our two retirement accounts with our Apple, Facebook,
Google, Halliburton, Health Care ETF, Home Depot, MMM, NASDAQ ETF and TJ Maxx
trades.
The ‘insurance’ put options in these two accounts guarantee that the Option Version and
Stock Version Market Neutral trades will profit regardless of the price movements of the
underlying stocks even in the unlikely event that all of the stocks decline to zero.
Retirement Account #1
Option Version Strategy $199,052.70 Profit
Note: The actual profit results presented here may vary with the actual profit results presented in
other Legacy Publishing LLC publications due to the different strategies and time frames
presented in other publications. The cost basis for some of the options in this portfolio may be
reduced by rolling over profits at option expiration which is one of the Hughes Optioneering Trade
Management Rules.
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Retirement Account #2
Option Version Strategy $70,868.63 Profit
Note: The actual profit results presented here may vary with the actual profit results presented in
other Legacy Publishing LLC publications due to the different strategies and time frames
presented in other publications. The cost basis for some of the options in this portfolio may be
reduced by rolling over profits at option expiration which is one of the Hughes Optioneering Trade
Management Rules.
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Retirement Account #1
Stock Version Strategy $73,140.62 Profit
Like the Option Version Market Neutral Portfolios just presented, the Stock Version
Portfolios can’t lose money regardless of the price movement of the stocks.
A total market meltdown and severe declines in the stocks in these portfolios would
result in a profit windfall for these Stock Version trades. The more the stocks in these
portfolios decline in price, the higher the profit potential.
There is no limit on the profit potential of these portfolios if the stocks continue to
increase in price.
And the dividends received in these portfolios helps pay for the cost of the ‘insurance’
options.
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Retirement Account #2
Stock Version Strategy $36,301.85 Profit
The ‘insurance’ put options in the retirement accounts guarantee that these portfolios
will be very profitable regardless of the price movement of the stocks. These profits
demonstrate the ability of the Market Neutral strategy to deliver substantial returns with
low risk.
Let’s face it. It’s a crazy world out there. Isn’t nice to know that having financial security
is one thing you will not have to worry about? The Option Version and Stock Version of
the Market Neutral strategy have allowed us the privilege to lead a stress free
retirement.
These strategies have allowed us the time and freedom to concentrate on the things that
really matter; family, their wellbeing, and of course our tennis game! You’ve got to love
it! This is the ultimate way to enjoy retirement or generate income!
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Market Neutral Advisory Service
The Hughes Optioneering™ Team makes trade recommendations for the Market Neutral
Strategy discussed in this Report through the Weekly Option Advisory Service. Advisory
members receive access to an exclusive 'Members Only' proprietary web page enabling
members to benefit from the continued success of the Hughes Optioneering™ trading
strategies. Email alerts are sent to members with specific instructions whenever there is
a new Market Neutral trade recommendation or if an existing trade is closed out.
A portfolio of the Market Neutral trade recommendations is maintained and prices are
updated real time so members can track the profit performance of every trade
recommendation. A closed trade record of all closed trades is also maintained so that a
full accounting of all trade recommendations is always available.
Membership Benefits:
● Full support from the Hughes Optioneering™ Team to help you implement the trade
recommendations
● Receive clear and concise ‘buy’, ‘sell’ or ‘hold’ signals that eliminate guesswork
● Receive access to actual open trade and closed trade profit results that give you
an instant ‘picture’ of how a strategy is performing
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Market Neutral Current Profit Results
The table below lists the current open trade profit results for the advisory service Market
Neutral trade recommendations. The table lists the buy price, number of option
contracts, current price, dollar profit and percent profit for each option recommendation.
There are currently $166,312.00 in open trade profits and an average return of 285.5%
for the market neutral trade recommendations. All trades are currently profitable
demonstrating the ability of the Market Neutral strategy to perform well in the current
market conditions.
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If you would like to learn more about becoming a member of the Hughes Optioneering™
Advisory Service then log on to www.WeeklyOptionAlert.com or call our sales partner
Brad toll free at (866)-661-5664 or (310)-647-5664. Click the ‘Trade Results’ link for
updated profit performance for the Hughes Optioneering™ Trading Strategies.
Log On to www.WeeklyOptionAlert.com or
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Optioneering™ Advisory Services
Live Trading Profits Since 1999
We have maintained a web based option advisory service since 1999. Our advisory
services have produced consistent profits in every type of market condition including two
severe bear markets demonstrating the versatility of the Optioneering™ trading
strategies to profit during difficult market conditions.
The table below shows the advisory services have produced $8,306,497.08 in live
trading profits with no losing years.
$9,000,000
$4,000,000
$3,000,000
Consistent
$2,000,000 Profits in
$1,000,000 Good Times and Bad
$0
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