Presentation from event on May 8th, 2019.

1. HOW TO MAKE MONEY WITH THE UPS AND DOWNS OF THE MARKET USING OPTIONS
Presented for Vancouver Investment Conference Network
May 8, 2019
Slides available at: www.slideshare.net/ppis

2. This is a presentation prepared for Education purposes only.
Neither Vancouver Investment Conference Network or Prosperis Passive Income Strategies
(PPIS) nor any of its personnel are registered broker-dealers or investment advisors.
We may mention that we consider certain securities or positions to be good candidates for the
types of strategies we are discussing or illustrating. This does not mean that we are telling you
to trade these exact strategies or securities.
Keep in mind that we are not providing you with any specific recommendations or
personalized advice about your own trading activities. The information we are providing is not
tailored to any particular individual. Any mention of a particular security is not a
recommendation to buy, sell, or hold that or any other security, or a suggestion that it is
suitable for any specific person. Trading ALWAYS involves a risk of loss, even if we are
discussing strategies that are intended to limit risk.
Vancouver Investment Conference Network and PPIS are not subject to trading restrictions.
We could have a position in a security or initiate a position in a security we mention at any
time.
Disclaimer

3. Speaker Bio
Karim Adatia, CPA
Tax Auditor (2008 – 2016)
Full-time Stock Options Trader (2016 - Present)
Financial Educator (2016 - Present)
www.ppis.c
a
TRADING INC.
Canada Revenue Agency

4. THE S&P 500

5. What are Equity Options?
An option is a contract that to buy or sell a
certain amount of stock.
allows you
RIGHT or OBLIGATION
BUY
SELL
When you buy, you have a RIGHT.
When you sell, you have an OBLIGATION.
What can we do with Option Contracts?

6. Why do Options exist?
Leverage.
An option contract represents 100 shares of the underlying stock
but costs a lot less!
Bullish Stock Trader
Apple Inc. (AAPL) costs $100.00/share
100 shares would cost = $10,000.
Apple Inc. share goes to $105.00/share
Stock Trader makes $500 or 5% profit.
Bullish Options Trader
Apple Inc. (AAPL) costs $100.00/share
1 contract costs $5.00, so trader pays $500.
Apple Inc. share goes to $105.00/share
The Option contract goes to $6.80.
Options Trader makes $180 or 36% profit.

7. Types of Option contracts
CALL
PUT
A Call Option is an option contract that gives the buyer (holder) the right to buy, and gives
the seller (writer) the obligation to sell a 100 shares of a stock at the given strike price on or
before the expiration date of the contract.
A Put Option is an option contract that gives the buyer (holder) the right to sell, and gives the
seller (writer) the obligation to purchase 100 shares of a stock at the given strike price on or
before the expiration date of the contract.

8. SELL/WRITEBUY
PUT
THE RIGHT TO: THE RIGHT TO:
THE OBLIGATION TO: THE OBLIGATION TO:
Buy Stock Sell Stock
Sell Stock Buy Stock
CALL
Q: WHAT IF WE DID ALL FOUR TRADES AT THE SAME TIME?
A: WE CAN BE NON-DIRECTIONAL WITHIN A TRADING RANGE

9. The Iron Condor Options Strategy on a Stock
https://www.youtube.com/watch?v=Eg8IyTPoaQY
Trading
Range
Put
Spread
Call
Spread

10. The Iron Condor Options Strategy on the SPX
2780 2880 2980
Write a Put at
this Strike Price
Write a Call at
this Strike Price
Buy Protection for the Put = 2775 Buy Protection for the Call = 2985

11. SPX (S&P 500)
SHORT CALL:
= 2980
2880 29802780
95% CONFIDENCE INTERVAL : Under NORMAL Volatility Conditions
TRADING RANGE: 2780 – 2980
SHORT PUT:
= 2780
LONG PUT as
protection 5
points away
LONG CALL as
protection 5
points away
29852775

12. THE VOLATILITY INDEX – TICKER: VIX
15.5

13. Our Non-Directional Trade
1. Option Writing Selling an Option to Open Trade
2. Range-bound Confidence Interval of 95%
3. Out-The-Money No Intrinsic Value, Only Time Value
4. Index-linked Ticker: SPX
5. Average Return 8% in 3 weeks
6. 25-day Timeframe Guaranteed Time Decay

14. The Guarantee with Options – Time will Decay
$$$
Time Remaining Until Expiration Date (Days)
Option
Time
Value
($)
SELL
BUY
BACK
90 60 30 0

15. Practice Trade
WEEK OF: JAN 2 - 6 2017
STEP 1: INFORMATION
-105.00 -100.00 (SPX VALUE) +100.00 +105.00
Long Put Short Put Short Call Long Call
STEP 2: TRADE Watch Video:
STEP 3: MANAGEMENT Watch Video:
CALL ALERT: SPX Value + 65=
PUT ALERT: SPX Value - 65=
YOUR PRACTICE TRADE
Get spreadsheet from www.ppis.ca/Meetup

16. ADJUSTMENT RULES
This is a 3 Week Trade
If your ALERT goes off in the first two weeks:
ROLL THE THREATENED SIDE
If your ALERT goes off in the last week:
CLOSE THE THREATENED SIDE

17. TRACK RECORD FOR THIS TRADE?
www.meetup.com/VDTHub Message Boards

18. Trade Size Allocation Guide
POSITION SIZING
https://youtu.be/hFn0AviEk3U

19. Be ___________ when
others are _____________
and
____________ when others
are _______________
- Warren Buffett
greedy
fearful
fearful
greedy
TWEAKING THE TRADE

20. Volatility is measured by the VIX. AKA: The “Fear Index”.
The VIX has an inverse relationship to the SPX
The Volatility Factor in SPX Iron Condors

21. VIX Value Comment 95% c.i. Trading Range
<10.00 Not Volatile Enough
Too narrow, 100 strikes
doesn’t pay enough $
10-15 Average Volatility
Average, 100 strikes away is
ideal.
15-18 Perfect Volatility
Excellent, >100 strikes away
pays enough $.
>18 Too Volatile
Opportunity to get 150~200
strikes away
The Volatility Factor in SPX Iron Condors

22. The Volatility Factor
Trading Range = 2270-2030
= 240
Distance on either side
= 120/2150 = 5.58%
2030 2150 2270
1990 2150 2300
Trading Range = 2300-1990
= 310
Distance on either side
= 155/2150 = 7.21%
1
2
The Volatility
is Higher

23. KARIM, HOW DO CAN I DO THIS?
6:00 PM EVERY MONDAY – CEDAR COTTAGE PUB, VANCOUVER
1. JOIN THE MEETUP:
www.meetup.com/VDTHub

24. KARIM, HOW DO CAN I DO THIS? (contd.)
2. PRACTICE THE TRADE AT THE MEETUP
3 items at www.ppis.ca/meetup
WEEK OF: JAN 2 - 6 2017
STEP 1: INFORMATION
-105.00 -100.00 (SPX VALUE) +100.00 +105.00
Long Put Short Put Short Call Long Call
STEP 2: TRADE Watch Video:
STEP 3: MANAGEMENT Watch Video:
CALL ALERT: SPX Value + 65=
PUT ALERT: SPX Value - 65=
YOUR PRACTICE TRADE

25. 3. ATTEND THE MONTHLY WORKSHOP WHEN YOU FEEL READY!
KARIM, HOW DO CAN I DO THIS? (contd.)
Every 3rd Wednesday of the Month
SFU Harbour Centre (Downtown)
Register at :
www.ppis.ca
Workshop (2.5 hours)
+ Workbook
+ 1-1 Coaching (1 hour)
+ Weekly support via VDTHub Meetup
Next Workshop: May 15, 2019
Methodology in Detail
Adjustment / Stops
Entry Criteria & Risk management
Taking Advantage of Volatility
$200 / person
$350 / 2 people*
(*2nd person not at this VICN Meetup)

26. US ON FACEBOOK
www.facebook.com/ppistrategies
If you Liked the Presentation,
Write us a review!

27. karim@ppis.ca

28. Out The Money / At The Money / In The Money
Strike Price: The predetermined price you set for the option you buy/sell.
• A CALL is out of the money if the
STRIKE PRICE is greater than the
STOCK PRICE.
• A CALL is in the money if the STOCK
PRICE is greater than the STRIKE
PRICE.
• A PUT is in the money if the STOCK
PRICE is less than the STRIKE PRICE.
• A PUT is out of the money if the
STRIKE PRICE is less than the STOCK
PRICE.
The “In-the-money-ness” of an Option is it’s Intrinsic Value.
Out-The-Money Options have no Intrinsic Value – ONLY TIME VALUE.

29. OUTCOMES WHEN TRADING OPTIONS
If you believe a stock will go UP:
BUY A CALL
• You are betting the price of the stock will go UP
• The person selling the call is betting the price will go DOWN or
STAY THE SAME
When you buy a call, you can win 1 out of 3 ways
When you sell a call, you can win 2 out of 3 ways
YOU WIN
1
NEUTRAL
2
YOU LOSE
3
YOU LOSE

30. OUTCOMES WHEN TRADING OPTIONS
If you believe a stock will go UP:
SELL A PUT
• You are betting the price of the stock will go UP or STAY THE SAME
• The person who buys the put is betting the price will go DOWN
When you sell a put, you can win 2 out of 3 ways
When you buy a put, you can win 1 out of 3 ways
YOU WIN
1
NEUTRAL
2
YOU WIN
3
YOU LOSE
… Maybe

31. OUTCOMES WHEN TRADING OPTIONS
If you believe a stock will go DOWN:
BUY A PUT
• You are betting the price of the stock will go DOWN
• The person selling the put is betting the price will go UP or
STAY THE SAME
When you buy a put, you can win 1 out of 3 ways
When you sell a put, you can win 2 out of 3 ways
YOU WIN
1 3
YOU LOSE
NEUTRAL
2
YOU LOSE

32. OUTCOMES WHEN TRADING OPTIONS
If you believe a stock will go DOWN:
SELL A CALL
• You are betting the price of the stock will go DOWN or STAY THE SAME
• The person who buys the call is betting the price will go UP
When you sell a call, you can win 2 out of 3 ways
When you buy a call, you can win 1 out of 3 ways
NEUTRAL
2
YOU WINYOU WIN
1 3
YOU LOSE
… Maybe

33. JOIN OUR MEETUP!
6:00 PM EVERY MONDAY – CEDAR COTTAGE PUB, VANCOUVER
www.meetup.com/VDTHub