Imagine this: graduating Magna Cum Laude from Cornell University and crushing billion-dollar deals on Wall Street as an Investment Banker, surrounded by the high-pressure world of corporate finance.
That was David Jaffee's life for years. But amidst the wealth and prestige, the burnout and unhappiness also grew.
The long hours, the relentless stress – it wasn't the life David Jaffee truly wanted.
Deep down, David had always been fascinated by the stock market.
So, after years of investing, he discovered the world of options trading – a strategy that offered the potential for high returns while minimizing risk.
For over a decade, David honed his options skills, turning his passion into a mastery of the market. But his success wasn't meant to be a solitary journey.
He wanted to empower others and become the mentor he never had.
In 2018, David Jaffee launched BestStockStrategy.com, a platform that has since helped over 2,500 members.
He also built a thriving YouTube channel, BestStockStrategy, where he talks openly about options trading, achieving success, and even his journey to health and wellness – proving that financial knowledge goes hand-in-hand with a well-rounded life.
David Jaffee's story is one of leaving the rat race behind and finding fulfillment in sharing his knowledge.
He's not just a trader; he's a guide, a mentor, and maybe even the inspiration you need to take control of your own financial future.
If you have any interest in investment banking or trading options, you have likely heard of David Jaffee.
David Jaffee has made a name for himself in the world of stocks and trading with a tell-it-like-it-is attitude and a long track record of success.
Many people want to become traders to earn financial freedom and independence. The best way to trade isn't actually to trade stocks, rather it's to learn how to trade options so that you can earn additional income while reducing risk.
In this blog post, we will walk through everything you need to know about David Jaffee and BestStockStrategy so that you can understand the many benefits of taking a new approach to options trading.
A quick Google search will turn up hundreds of results for options trading coaches and courses.
Everyone promises success, and in record time, making it difficult to know who to trust.
Some may choose their options trading course based on price alone, while others look for convenience.
However, if you want to be truly successful, it is important to know the reputation of the coach and their track record with options trading.
Do you want to learn how to trade options?
Do you even know where to start?
You may have heard that options trading is a great way to supplement your income, and that is true.
The best investment strategy will never be a get-rich-quick scheme.
David Jaffee of BestStockStrategy.com has taught more than 2,500 members how to be patient and disciplined by structuring their investments and trades to have a high probability of profit.
Are you ready to get back on track with trading options in 2024?
Or maybe you’re an experienced trader that wants to revisit some basic concepts?
You may already know some options trading mistakes you should avoid, but what about things you can do to increase the probability of being consistently profitable while trading options?
Read on to find out the top tips for trading options profitably in 2024!
Just as Warren Buffett says, “Be greedy when others are fearful and fearful when others are greedy.”
In 2023, the stock market was up ~20%.
It’s highly unlikely that 2024 will be as strong.
Especially during periods of low volatility, when VIX is low, traders can hedge their positions by purchasing portfolio insurance for a pennies; often resulting in major gains during bear market crashes and pullbacks.
Make sure your trades are small. As an options trader, it may be tempting to use all your buying power, especially when trading naked options.
Using all your buying power is an extremely risky approach.
Before you know it, a few bad trades can wipe out months of profits.
Since options use significantly less buying power when compared to buying shares of the underlying security, the general tendency is to overtrade and trade more contracts than you should.
By doing this, you’re increasing your risk of being placed into a margin call if the trade does not go your way.
Would you like more tips on how to trade options profitably in 2022?
As an options trader, you should choose high quality, liquid, securities and make sure the spread between the bid and ask is small.
The illiquidity of your stock options can affect the profitability of your trading strategy because there may be significant slippage when trading and it may be difficult to roll / manage an illiquid underlying.
The true power of options lies in its leverage, flexibility and control to set up positions so that you create a high probability of profit.
Do you want to learn one of the best option trading strategies?
David Jaffee’s options trading course will teach you how to develop this skill set!
Novice options traders are sometimes way too focused on how to make money trading.
They tend to sell strikes that are too close to the current market price of the underlying stock.
Additionally, novice traders tend to trade puts, or calls, but rarely both.
It’s best to trade BOTH puts AND calls.
If you believe that a position is oversold, then it may be best to sell a put.
If you believe a position is overbought, then it may be best to fade that move and sell an OTM call option.
As long as the stock price stays within a certain price range (above the OTM put and below the OTM call option strike prices), the options seller will be able to reap maximum profits.
For 1 put option and 1 call option, the maximum profit will be 100 x (net credit received from selling the OTM options).
Even so, David Jaffee does not recommend selling both puts and calls at the same time.
Instead, he believes it’s best to sell a put only when the stock is oversold, and a call only when a stock is overbought.
If the stock price ventures beyond the strike price range, there’s still a breakeven price range that will allow the seller to make a profit.
Any movement beyond the breakeven price range will result in losses.
How can you minimize the risk of this strategy?
Always choose strike prices that are far out of the money when selling options so that you have an adequate safety net.
Are you looking to make 2024 a success?
If you’ve started options trading on your own, you’ll realize that there are some strategies that are more profitable than others.
Trading small, choosing options with high liquidity, and selling OTM puts and calls are all part of David Jaffee’s simple options trading strategy that can help you win up to 98% of your trades.
Do you want more amazing advice related to options trading?
Visit BestStockStrategy.com and enter in your email address to receive $400+ worth of valuable free options trading information.
2023 Performance: +138% (Small Account) and +35% (Large Account)
Watch the Video Below to Review Trading Statements
Most people want to make a million dollars but not very many know how to accomplish this goal.
David Jaffee of BestStockStrategy.com has taught more than 2,500 members how to make money trading options.
Estimate your buying power efficiency.
*Estimates based on standard Regulation T (50%) vs. selected Portfolio Margin stress test range. Actual PM requirements vary by broker and real-time volatility.
In the United States, Regulation T is available for accounts that have a minimum balance of $2,000.
When you sell naked options using Regulation T, it will reduce your available buying power by around 12% to 20%..
For example, if you sell one contract with a strike price of $100 it means that the notional value of that contract is $10,000 (since 1 contract is 100 shares).
If you’re trading Regulation T, then your buying power reduction is going to be anywhere from 12% – 20% of $10,000.
This means that your buying power will be reduced by $1,200 to $2,000 for every contract that you sell.
In contrast, Portfolio Margin is usually available to accounts with an account balance, or net liquidation value, of around $125,000 or more.
Overall, Portfolio Margin is more capital efficient than Regulation T and your buying power will be reduced by around 4% to 10% of the maximum loss.
Portfolio margin stress tests your entire portfolio in aggregate.
As a result, the further out of the money options that you sell, the less your buying power is going to be reduced.
This means that “PM”, or portfolio margin, looks at the risk of your entire portfolio.
In my opinion, if you have an account balance of over $125,000 (the amount varies for each brokerage) then I believe it’s best to always use portfolio margin.
Tastyworks, E*Trade, Schwab and Interactive Brokers all offer portfolio margin for accounts over $125,000 – $175,000.
Portfolio margin works very well, especially when you’re disciplined, because it enables you to sell further out of the money options.
I remember when Amazon fell below $3,200 in late September 2021, during that time I sold put options on Amazon with a strike price of $2,200 or $2,300.
My buying power was only reduced by a few thousand dollars per contract, despite collecting around almost $1,000 for every contract that I sold..
Portfolio margin allows you to make less risky trades, and increase your win rate, without significantly reducing your available buying power.
You can sell further out of the money options and your trades will be more capital efficient when using portfolio margin.
Your premium collected as a percentage of buying power used is often significantly higher when using Regulation T.
Since Regulation T is less efficient, you may be encouraged to trade more aggressively and choose higher delta strikes so that you collect more premium.
This will lead to increased risk.
One major drawback of using Portfolio Margin, particularly when trading naked options, is that during a large volatility expansion event, your excess liquidity tends to drastically decrease because many of your positions may get challenged at once.
As a result, it’s very important to make sure that you don’t trade too large and that you always leave an ample safety net.
If you trade too large, then you may be forced to close out your positions at an inopportune time.
As a result, you always want to ensure that you leave enough buying power to ensure that your portfolio can withstand a volatility expansion event.
Portfolio Margin allows you to take less risk by selling options farther OTM and still collect decent premium, without incurring a large decrease in your available buying power.
Oftentimes, even during periods of low volatility, traders can extend the duration of a trade, while going farther OTM, and make a trade using Portfolio Margin that wouldn’t be nearly as efficient if they made the same trade using Regulation T.
Also, Portfolio Margin allows traders to sell naked options much more efficiently than if they were using regulation T.
Visit https://beststockstrategy.com/ to receive $400+ of valuable free options trading information.
Read about Can You Get Rich from Options Trading?
About once a week, David Jaffee of BestStockStrategy.com is asked the same question.
What would happen if everyone started selling options?
When people ask this question, they fail to understand that most human beings, at their core, act irrationally.
People are self-destructive. If they weren’t, nightclubs, cigarettes, casinos, lotteries, packaged foods, sodas, and other harmful stuff would not exist.
Human beings are a slave to dopamine, and this is getting worse with the advent of mobile devices, Instagram, TikTok, and similar things that provide people with instant gratification.
Because people are slaves to dopamine, they engage in short-term, risky behavior to get a dopamine fix. They do this because the consequences of their negative behavior are not immediate.
David Jaffee understands how difficult it can be to sacrifice.
David Jaffee grew up in a poor area and went to a high school where students did not have to work hard. David Jaffee often skipped class while still managing to get good grades and get into a good university.
However, when he went to Cornell, David Jaffee realized that his fellow students were very smart, and he had to study hard to keep up with them.
David Jaffee disliked attending Cornell University. Even though he received good grades, he was not as smart as the grades that he achieved. As a result, he had to outperform, out study, and out work the students that he got better grades than.
When he graduated college, David Jaffee started working as an investment banker, which was also extremely self-destructive. Nobody who actually cares about themselves should ever tolerate working in a toxic environment like investment banking.
Investment banking is a horrible job. Even the managing directors, most of whom have been working in investment banking for over 10 years, oftentimes hate their lives and possess a lot of self-loathing.
David Jaffee shares this experience because it highlights a bit of a paradox in thinking. Just because someone makes a lot of money or holds a position with a significant amount of prestige does not mean they are any better at engaging in self-destructive behavior than a typical person.
Many people who have achieved a large amount of success have had to make significant sacrifices that many other people would be unwilling to make.
Whether you’re a managing director or you’re unemployed, the point is that people are irrational.
Being a managing director at an investment bank is not a rational decision because you’ve had to sacrifice 10 to 20 years of your life in order to accomplish that goal.
Remember that we are slaves to dopamine. Not everyone is going to act rationally and start selling options.
The best thing to do is not to take any shortcuts and try to behave in a manner that sets your future self up for the highest probability of success.
Don’t act with a short-term focus. Instead, always try to keep your long-term goals in focus and behave in that manner. By doing that, you should be able to consistently earn about 3% per month by selling option premium.
Don’t try to hit home runs and don’t try to day trade or trade Forex and engage in risky behavior.
Instead, do what many other people are unable to do.
Think of your long-term self and then work your way backwards. To figure out how to be somewhere long-term, consider what immediate steps you can take today to accomplish your goal.
Some additional reasons why everyone won’t start selling options is that if everyone started selling options then options prices would become significantly undervalued and it would actually make sense to buy options!
If options prices were low, then the expected volatility would be less than the actual volatility, and you could profit from buying options!
Additionally, there will always be people buying, and selling, options as part of vertical credit spreads.
Learn more from David Jaffee by visiting BestStockStrategy.com. Enter your email to receive $400 worth of valuable options trading training materials.