Get Started with Time Bandit Options
What you need to know to be successful with Time Bandit Options:
- Time Bandit Options’ goals;
- Important definitions and terms that we use;
- An understanding of the basics behind any Iron Condor strategy;
- How Market Rebellion’s strategy builds on this with a concept called “morphing,” including a video on How to Trade Time Bandit Options;
- An understanding of frequently asked questions.
Time Bandit Options’ Goals
Our main goal for this service is to educate traders on how to take advantage of an option’s time decay to collect weekly premium.
Each week, in Time Bandit Options, you will receive a weekly trade idea via a weekly newsletter, an invite to a weekly webinar, updates or adjustments to existing trades, access to a 24/7 member forum, and an invite to the Virtual Cocktail Hour on Friday.
Weekly Webinar (archive here)
We will be having our weekly webinar on Wednesday afternoons. A link will be emailed to you. In the webinar we discuss in depth the potential trades and will review the results of the trades from the prior week. We believe that the majority of your profit will come from how you manage your trades. For this reason we will be providing updates throughout the week as the market and stocks move around.
Member Discussion Forum (here)
In the left-side column of the Time Bandit Options membership pages, you will see an orange button to open to the member discussion forum. Here you can post and reply to topics at any time.
Important Definitions and Terms
Straddle: Strategy where trader buys a call and put with same strike and expiration.
IV Move: used to measure distance from current price that the market thinks the stock can move.
ATR: average true range is the average distance that the stock moves in a day including gaps.
UEM: Upside early morph level
DEM: Downside early morph level
Risk: Width of vertical($10) less credit amount. Example $10 width less $2 credit equals $8 of risk.
%ROR: Return on risk is the credit that is locked in divided by the risk. So if we lock in $1.5 on $8 of risk 18.75% Return on risk.
LSD: lower strike distance: this is the difference between the current stock price at entry to the lower short strike
USD: upper strike distance: this is the difference between the current stock price at entry to the upper short strike
The Basics of an Iron Condor
The main strategy that we use in this service is the Iron Condor. It is a popular strategy because of the favorable win/loss ratio. In addition to the profitability, the Iron Condor is a fully hedged strategy where your maximum loss is pre-defined in advance.
In an Iron Condor, a trader simultaneously puts on out-of-the-money call and put spreads in a single security that expire on the same date. The trader can either sell a call and put spread or buy a call and put spread. Whichever the trader does with the one, they will do with the other. So, if they buy a call spread, they will also buy a put spread to be in an Iron Condor. Conversely, if they sell a call spread, they will then sell a put spread.
If the trader buys the call and put spread, they will have a capital outlay that is defined. That capital outlay becomes the only capital at risk, while the potential return is the distance between the two strikes minus the debit paid.
If the trader sells the call and put spread, they will receive a net credit, and their risk is constrained to the distance between the two strikes minus the credit received. In this case, the credit received is the potential return.
In Time Bandit Options, we sell Iron Condors to receive credits. Let’s look at an example:
ABC stock is trading at $100.
We sell a $5 wide Iron Condor.
We sell a $90 / $85 put spread and sell a $110 / $115 call spread that expire next week, collecting $0.50 on each side ($1 total).
Profit potential: $1 total.
Capital at risk: $4 total ($5 wide Iron Condor minus $1 total collected).
As long as ABC stock trades between $90 and $110 on the expiration date, the trader collects the whole $1 and has no risk to the downside. The maximum loss is seen if ABC stock trades below $85 or above $115 on the expiration date. In those scenarios, the trader would lose the maximum $4 risked. A third scenario, where the stock trades between the two strikes (at $87, for instance), will result in a profit or loss that is between a $1 gain and $4 loss.
The Iron Condor credit strategy does best in a sideways market. In a market that moves higher or lower, you need to adjust your strategy—the Market Rebellion way.
How Market Rebellion’s Iron Condor Strategy Differs
Selling Iron Condors is a high-probability strategy, typically with a high win ratio. However, the premium that you collect by selling an Iron Condor is typically a fraction of capital at risk. So even though it’s a high-probability strategy, one loss can offset multiple gains.
In order to combat this and broaden this strategy to markets that move up and down, as well as sideways, we employ a setup that provides as good of chance of winning as it does allowing us to convert losers into winners. We call this morphing.
Since selling an Iron Condor profits when a stock moves sideways, we use technical analysis to determine levels that may indicate a breakout or breakdown is happening. If the stock reaches those levels, then we employ proprietary trading mechanics to capture the upside or downside move with additional options trades.
Those morphing levels are provided with the trade setup so you won’t be left wondering what to do, and when.
Another way that we maximize Time Bandit Options for success is by selling very short-dated options—those with just nine days to expiration. That allows us the opportunity to capitalize on time decay, benefiting from the steepest part of the theta curve.
Knowing that there is a proprietary philosophy and mechanics to apply to these types of trades this service will be educational in nature.
Video: Introduction to Time Bandit Options
Additional Education
In addition to the Introduction video above, here are two additional videos that will further explain the theory and trading style of Time Bandit Options, including the philosophy behind this trading style, why it works, and some examples of real trades executed in a live market environment.
FAQs
Where can I see a list of all the Time Bandit Options Newsletters, webinars, and trade alerts?
Your memberships are shown in the “My Memberships” navigation bar. This dark blue bar contains links to the membership home pages for all of your memberships. This is where you can click to see archived newsletters, webinars, and trade alerts.
I haven’t received my emails
Some email providers may block your membership emails, so the first place to check is any junk or spam folders. Note for Gmail users: Your membership emails may go into the “Promotions” tab. To change this, move the email into your Primary tab and Gmail will ask if you would like to always receive emails from Market Rebellion in Primary.