This document is a slideshow presentation on options trading. It introduces Prosperis Passive Income Strategies (PPIS) and its founder Karim Adatia. The presentation covers what options are, demonstrates a sample trade using the iron condor strategy, and reviews PPIS's track record of profitable trades using this strategy when implied volatility is low. It emphasizes that options allow leveraged profits when the underlying asset's price stays within a defined range.

1. www.slideshare.net/ppis

2. Who are we?
Karim Adatia, CPA
Tax Auditor (2008 – 2016)
Full-time Stock Options Trader (2016 - Present)
Financial Educator (2016 - Present)
www.ppis.ca
TRADING INC.
Canada Revenue Agency

3. 1. Who are we?
2. What are Options?
3. A Practice Trade
- Break-
4. Success Record
AGENDA

4. This is a presentation prepared for Education purposes only.
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.
PPIS is 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

5. What is Securities Trading?
A security is a tradable financial asset.
Securities Trading is the buying and selling of these financial assets
5 Major Types of Securities Trading in the world:
1. STOCKS (Including Mutual Funds, ETFs and Bonds)
2. FOREX (or FOReign EXchange or Currency Trading)
3. FUTURES
4. COMMODITIES (Oil, Gold, Coffee, Bitcoin)
5. OPTIONS

6. What are Equity Options?
An option is a contract that to buy or sell
a certain amount of stock.
allows you
BUYING an option gives the owner a RIGHT
SELLING an option gives the seller an OBLIGATION
RIGHT or OBLIGATION

7. Why trade Equity Options?
Leverage.
An option contract controls 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.

8. SELLBUY
(SHORT/WRITE)(LONG)
THE RIGHT TO: THE RIGHT TO:
THE OBLIGATION TO: THE OBLIGATION TO:
Buy Stock Sell Stock
Sell Stock Buy Stock
PUTCALL
WHEN WE DO ALL FOUR – WE ARE NON-DIRECTIONAL!

9. Non-Directional Trade
No opinion on whether market goes up or down.

10. The Iron Condor Options Strategy
2610 2710 2810

11. Iron Condor Trade Characteristics
1. Option Writing Write: To Sell an Option
2. Range-bound Confidence Interval: 95%
3. Index-linked Ticker: SPX
4. Out-The-Money No Intrinsic Value, Only Time Value
5. Average Return Goal of 8% in 3 weeks
6. 25-day Timeframe Guaranteed Time Decay

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

13. THE VOLATILITY INDEX – TICKER: VIX
18

14. SPX (S&P 500)
SHORT CALL:
= 2810
2710 28102610
95% CONFIDENCE INTERVAL : Under Normal Volatility Conditions
TRADING RANGE: 2610 – 2810
SHORT PUT:
= 2610
LONG PUT as
protection 5
points away
LONG CALL as
protection 5
points away
28152605

15. IRON CONDOR EXPLAINER VIDEO
https://www.youtube.com/watch?v=Eg8IyTPoaQY
Trading
Range
we talked
about
Put
Spread
Call
Spread
T

16. Practice Trade
https://www.td.com/ca/products-services/investing/td-direct-
investing/trading-platforms/thinkorswim/getting-started.jsp

17. Practice Trade

19. Success Record

20. WORST DAY FOR THE S&P 500 IN 2017
2400 24652335
2.6% away
(Put Alert) Index Value (Call Alert)
2.6% away

21. WORST DAY FOR THE S&P 500 IN 2018
2740 28052675
2.4% away
(Put Alert) Index Value (Call Alert)
2.4% away

22. Our Track Record (2017- Mar 2018)
*Average Invested
= $5,000/week

23. Our Track Record (> Apr 2018)
* Average Invested
= $5,000/week

24. Determining Expectancy
Steps for calculation expectancy:
1. Calculate your win and loss ratio
2. Calculate your reward to risk ratio
3. Combine those two ratios into an expectancy ratio
SPX Trade Expectancy
1. Win and loss ratio:
Win ratio = Wins/Total Trades
Loss ratio = Losses/Total Trades
2. Reward to risk ratio:
Avg. Winner / Avg. Loser
3. Expectancy ratio:
(Reward to Risk ratio x Win ratio) – Loss ratio
Before Apr 2018 After Apr 2018
55/60 = 92% 12/13 = 92%
5/60 = 8% 1/13 = 8%
$242.86/$1,520 = 16% $683/$100 = 683%
(16% x 92%) – 8%=
+6.72%
(683% x 92%) – 8%
+620.36%
Win Ratio:
Loss Ratio:
R2R Ratio:
Exp Ratio:

25. How much does the SPX Move on a Daily Basis?
www.investing.com/indices/us-spx-500-historical-data+ 66

26. How much does the SPX Move on a Daily Basis?
www.investing.com/indices/us-spx-500-historical-data+ 50

27. How much does the SPX Move on a Daily Basis?
www.investing.com/indices/us-spx-500-historical-data- 16

28. The Volatility Factor
Trading Range = 2270-2030
= 240
Distance on either side
= 120/2150 = 5.58%
Return = 8% After Commissions
2030 2150 2270
1990 2150 2300
Trading Range = 2300-1990
= 310
Distance on either side
= 155/2150 = 7.21%
Return = 8% After Commissions
1
2
The
Volatility is
Higher

29. Full Workshop
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: July 18, 2018
Methodology in Detail
Adjustment / Stops
Entry Criteria & Risk management
Taking Advantage of Volatility

30. SUNDAY 6:00PM CEDAR COTTAGE
PUB, VANCOUVER
www.meetup.com/vdthub

31. karim@ppis.ca

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

33. Backup Slides

34. 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 you sell the call to 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

35. 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 you sell the put to 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

36. 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 you sell the put to 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

37. 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 you sell the put to 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

38. VIX During the 2008 Financial Crisis
Takeaway: When VIX is > 18, Don’t Trade This Strategy!