Hey everyone. This is Kirk here again at optionalpha.com and welcome back to the daily call. Today, we’re going to be talking about how active traders can now take a passive approach to investing and particularly with options trading, take a passive approach. Right now, the big buzz in the industry and has been like this for many years now is this passive indexing style of trading and investing. Basically, this idea that you continue to buy the indexes regardless of the value or how high they are and everyone buys the indexes because that's what everyone should do and everyone should buy the indexes, so everyone does, etcetera, etcetera. Well, I definitely subscribed to the idea that long-term active traders are more profitable with less volatility in their account than passive index trading. I think one of the biggest flaws to index trading right now is that everyone is blindly buying the indexes regardless of the value of the underlying stocks. Because everyone's buying indexes, more people buy in. It’s just this self-fulfilling prophecy that they just continue to go higher until they reach bubble territory which maybe we’ve already gotten through now in February time period of 2018. But what we’re trying to do with Option Alpha and with our new auto-trading platform is actually create a series of indexable option strategies. Now, they won't work in the traditional sense that you can buy in the next and hold it, but it can work in the auto-trading sense that we will have indexable strategies that both include stocks and some that don't include stocks where you can basically setup and clone the strategy and then go through all the approval processes to have it auto-traded in your account.
One of the research reports that we did many months back, even probably a couple of years back now on our regular weekly show was this idea that a simple covered call on the S&P 500 actually beats the market performance. It actually beats the S&P 500 just adding in one simple covered call every single month. Well, now, with our auto-trading system, we’re going to able to create an index covered call strategy where you can just plug in whatever stock you want and it will automatically not only buy the stock, but it will also manage and trade a simple covered call, so that you can sit back and replicate a more active approach to options trading and investing without having to go through the physical activity of clicking and selling options every single month. The system would in this case, sell a covered call at whatever predefined Delta you want. It would manage that covered call, it would roll it. If it was assigned stock, it would repurchase stock and then sell another covered call. It's truly a robotic trading system that does what active traders wanted to do with a more passive approach. You don't have to do anything. It’s all done by computers and algorithms and robots. It’s a very cool way to trade. It's one thing that I think we’re super excited about, is creating a bunch of these different indexable option strategies, some around iron butterflies, some around short strangles and straddles, credit spreads, volatility trading, earnings trading. There’s going to be a lot of these that we’re going to create. They’re all going to be in this new marketplace that we have or template place that we have that we’re creating on the website where you can just go in, use some quick filters and create some of these literally in a couple of clicks of your mouse and then just sit back and monitor these things as they go. Hopefully this helps out. As always, if you guys have any questions or want to learn more, just let us know and until next time, happy trading!
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