How to Evaluate Options Trades: Risk, Return and Capital Protection

During their recent episode of the Acquirers Podcast, Travis and Carlisle discussed How to Evaluate Options Trades: Risk, Return and Capital Protection. Here’s an excerpt from the episode:

[Tobias] Right. They’re not speculative positions. We’re trying to find positions that have a good risk reward, good handicapping, and you can see what your expected return is and also where you’re likely, if the stock gets put to where you buy it, and if you’re happy to own it at that price, then that’s a good trade for you.

[Tim] Yes, sir. Yeah, I agree completely. And so what do subscribers get?

So you’re going to get on average three to five new trade ideas each week. So you’ll see the full thesis. You’ll see the strike prices.

You’ll see the capital at risk. It’s in a really beautiful user-friendly format. It’s for you to make the decisions on which ones you actually want to do.

We have a lot of educational content that can help you understand how to place the trades with your brokers, but you just go on your Schwab, your Fidelity and place them accordingly. Or you could call your advisor who probably doesn’t know how to do a lot of these things, honestly. So that would be another option.

It’s going to have exit analysis on every trade, what worked, what didn’t, help diagnose. If you get exercised, look, do we sell calls? What strike prices do we sell at?

So very powerful features there.

[Tobias] And also if the trade has moved in your direction, but there’s some time left, maybe now’s a good time to exit. So you increase your IRR without having to wait for the last little part of the trade to complete.

[Tim] Correct. And what’s cool about the website is it aggregates the track record, which you’ll see over time. So it’s not cherry picked.