Let's bring 'print screen' of the option numbers to present the clear case of profit available to you:
03.25.2014, WEDNESDAY: $60.38, - $4.51
These numbers are public data available at exchanges and financial web sites.
This one page has everything you as investor needs:
on top you see the equity quote of $60.38 which is down $4.51 from a day before. So Total = $60.38 + 4.51 = $64.89. In % terms it is down ~ %7.
Let's say you placed on Tuesday back spreads on both sides: Call options are on the left side and Put options are on the right side. Such 4 leg position protects you.
03.25.2014, TUESDAY: $64.89
Starting 4 leg position
Sell 10 CALL 65 at 0.06 + 0.89 = 0.95 x 10 = $950 Sell 10 PUT 65 at 4.60 - 3.43 = 1.17 x 10 = $1,170
Buy 30 CALL 68 at 0.03 + 0.14 = 0.17 x 30 = -$510 Buy 30 PUT 62 at 2.03 - 1.78 = 0.25 x 30 = -$750
CALL TOTAL = $450 PUT TOTAL = $420
03.25.2014, WEDNESDAY: $60.38, - $4.51
Closing 4 leg position:
BUY 10 CALL 65 at 0.07 = 0.07 x 10 = -$70 BUY 10 PUT 65 at 4.75 = 4.75 x 10 = -$4,750
SELL 30 CALL 68 at 0.02 = 0.02 x 30 = $60 SELL 30 PUT 62 at 2.00 = 2.00 x 30 = $6,000
CALL TOTAL = -$10 PUT TOTAL = $1,250
CALL PROFIT: - $10 PUT PROFIT: $1,250
TOTAL PROFIT: - $10 + $1,250 = $1,240
Note: the same trade started on 03.20.2014, THURSDAY would double the TOTAL Profit.
You may place similar position on a weekly basis. Sometimes you profit big, sometimes you loose small.
There is a small group of stocks and etf's which has some specific option features which turn trading ratios into investor's / trader's favor.
Few examples of that group: MDT, PFE, TXN, FB, GLD, SPY.
Option trading professionals know that well but they will not tell it because they charge for their service up to $300 / month:
There are also multiple Autotrade Newsletter Providers, ANP, on the market with profits of 4%-20% per month and service fees ranging from $50 to $300 per month.
SEC position on ANPs is here: All About Auto-Trading. As options industry gatekeeper SEC endorses OIC, so I will lean on the OIC while sharing my experiences :)
ANPs usually provide their service as one or the other:
1. ANP emails suggested orders to clients and clients enter the orders themselves into a trading platform of their chosen broker
2. Upon client's arrangement with his/her broker, ANP send the same orders to chosen broker for execution (client does nothing)
The above ANPs are effective if they are right. Some of them post their weekly / monthly results, others are not. You have to make your own "homework".
Also...
Options are bread and butter of the insurance industry
Regular cash flow may be generated via options strategies.
They are effective and that's why they are widely employed by insurance industry.
As example, see the below the video explaining the Fixed Indexed Annuity based on S&P 500:
For more go to the web page InsurMath.
In a sense by learning option strategies you may bypass insurance and bring the required money on your own.
There is no magic to it and OIC does its best to equip you with the tools, knowledge and experience.
CONCLUSION:
Not every day move of %7 happens. Sometimes such move does not happen in a week.
It is not just the luck. I was studying for years to find such scenarios and with right tools similar cases may bring more than $20 billion.
Don't do this at home on your own. you have experience to handle things. There is no substitution for an experience ... not even with most advanced app.
You may contact us via DM at our X.com channel, @Artum12