Time is the biggest difference between trading low-risk option strategies and the popular income strategies. Their recovery times from drops in the market are very different. For example, due to a recent “computer glitch”, anyone trading Iron Condors as an income spread lost about fifty to seventy percent in that two week period. When you think about it that means it will probably take about ten months or more than a year for them to make their money back. Chances are most traders won’t be able to recover from this debacle.

For those who were using the low-risk Broken Butterfly strategy, they may have only lost between one to five percent max, if they were doing them right. Personally, I experienced about 2.5% drawdown over that period. This makes the difference rather obvious. When things go bad, they really only go bad for those trading the popular income options strategies. Strategies such as Iron Condors, Calendar Spreads, Covered Calls, Credit Spreads, and Near-The-Money Butterfly spreads were devastated by the recent “computer glitch”.

Those who were trading broken wing butterflies were much better off. Some Broken Wing Butterfly traders did not have any drawdown whatsoever. Those who did have drawdown, were able to manage the losses so that they could stay in the game. Those of us doing the low-risk strategies were fortunate enough to make back our losses over the following month. Those who were trading the popular income strategies will most likely never make their money back.

The results speak for themselves and are a great example as to why I personally don’t invest too much money into the popular income strategies anymore. That game they play is just a little too risky for my taste. I’d much rather make my money a little at a time while never having to take any of the huge losses that the aggressive income traders face every year. Doesn’t it make more sense to protect what we have and to take whatever the market gives us? In the long-term, I know my option trading plan will work much better this way.

Over the last few years I have really tweaked the popular option strategies so that I could initiate trades with lower risk. I have a different way to do iron condors that are quite a bit safer than the popular iron Condor. I have also really developed broken wing butterflies and unbalanced condors which have become some of my favorite trades overall. I really like the way I can initiate a trade with about a 2% risk, and shortly after I am in the trade, I can take off the risk nearly completely in most cases. In other words, sometimes I actually have trades on which are basically risk free. The only way I could ever lose on some of these trades is if the market drops over 7% in one day, but if I lose money on my trades, then those doing your popular option spreads, will be left with nothing at all. Even in the most extreme circumstances, my strategies are still much safer than anything I have ever seen before.

Trade Low-Risk Option Strategies, not your livelihood. Learn safer ways to Trade Options with San Jose Options. Don’t be an ordinary option trader!