25 Jul

Risk-To-Reward Is Overrated



Today I’m going to walk you through an actual Weekly Windfalls trade, the idea behind the strategy, and a little bit of what goes through my head when I’m making my trading decisions.


But first, I want to talk about a big misconception in trading that is holding so many people back.


One of the biggest rookie mistakes traders make is putting too much focus on risk-to-reward. They hear low risk and high reward…


…but fail to take into account the odds of winning.


Here’s a perfect example from the betting world:


Undefeated boxing champion, Floyd Mayweather, stepped out of retirement nearly two years ago to fight former-UFC Champion, Conor McGregor.


And While Floyd had an illustrious boxing career (he held world titles in five different weight classes)… Conor had never fought a professional boxing match in his life.


Nonetheless, it didn’t stop folks from betting on McGregor, despite being completely outclassed on paper.


This created an incredible opportunity for gamblers who were willing to ignore the risk-to-reward and make some easy money.


One gambler took Mayweather to win, ponying up $220K to make $40K.


Looking back at it, how could an undefeated boxing champion with over 20 years of experience lose to someone who has never laced up the gloves professionally in a boxing ring?


You see, some traders completely ignore opportunities because they put too much emphasis on risk-to-reward…


…. And not enough on the probability of the trade being successful.


However, my Weekly Windfalls options strategy focuses on high-probability trade setups. And while the risk-to-reward might turn some folks off… the results shouldn’t…


(10 for 10 winning trades since I launched the service. With 1-2 new trade alerts each day, don’t miss the next one…  Join Now) 


That said, check out this trade that I have on in Netflix to get a deeper understanding of what I’m doing to consistently put the odds in my favor.

Selling Options Premiums the Right Way – A Case Study


The other day, I taught you about a strategy that allows you to lock in large winners… fast.


If you don’t recall, I talked about the intricacies of vertical spreads using puts when you’re bullish on a stock.


Today, I’m going to walk you through exactly how I use the strategy to collect options premium.


How to Use Bull Put Spreads


Last week, Netflix (NFLX) reported earnings… and the market didn’t like the numbers at all… and it caused the stock to sell-off.



However, what I knew was that there is a key support level around $300… and I figured it would get around there and catch a bounce.


You see, from a technical standpoint… I’m bullish on the stock and think the market will forget about those earnings and potentially buy the stock because it’s cheap.


If traders do start buying NFLX… then the demand would increase and cause it to rebound.


With that being said… I knew I needed to get in…


… but the stock is over $300 a share… and buying shares could be expensive. So I went to the options.


However, I didn’t want to box myself in and put myself at a disadvantage by just buying calls (most options expire worthless)… so I decided to use the bull put spread, which places the odds in my favor.


Here’s the trade I placed in NFLX:



Basically, I was betting that NFLX would stay above $305… and if it did by the expiration date… then I would collect $2,400.


With this trade… my max loss was $7,600…


You might be thinking, Wow, Jason… your risk outweighs your reward… how are you okay with placing that trade?


It’s simple.


Even though the risk outweighs the reward… the win rate using my strategy – what I call Weekly Windfalls – is really high.


Think about it like this… if someone asked you to place a bet on a pickup game of basketball between LeBron James and someone’s grandmother.


Well, if you bet $100 on LeBron… you would make $50. However, if you bet on your friend… you would make $1,000 on a $100 bet.


Who would you take?


I know I’d take LeBron if that was me. Chances are he’s going to win… and even though the risk outweighs the reward… the odds of you winning the bet is high.


That’s the same way you can think of this trade in NFLX and my Weekly Windfalls strategy.


Well, NFLX actually did exactly what I expected; it caught a bounce and closed around $318 yesterday.


That said, the position was up $2,000… so I decided to take a small amount off the table.


I actually alerted this trade to my clients… and some of them were able to lock in some profits.


A.F. : @Jason, I saw NFLX losing steam and I had a good win on it so I sold and took my profits. A little over $450 on my first trade on WW. I am loving it. Thank you Jason….


So far, I’m 10 for 10 on my Weekly Windfalls strategy (using vertical spreads like this one in NFLX)… and up over $13K.



Now, if you want to learn how you can stack the odds in your favor and start winning in the market… then you’ll want to check out Weekly Windfalls here. It’s shaping up to be my most profitable strategy yet, and best of all, it’s easy to learn.


Disclaimer: I have a short put spread position in NFLX.


  1. Theresa Elder

    Yes been following your emails this week and playing with paper money getting used to the mechanics of making a trade and learning the jargon. I am now ready to fund my account and looking forward to this weeks picks! Thank you, Jason!
    theresa elder (also a poor teacher)


    Thank You, for continuing to give explanations, and examples of your WEEKLY WINDFALLS….. It helps to understand the strategy.


Submit a Comment

Your email address will not be published. Required fields are marked *

Choose From The Topics Below To Receive Jason Bond’s Market Insights & Alerts:

[adzerk adTypes=”162″ utm_source=”wrbrbwad” utm_medium=”w” utm_campaign=”wadproductweb” utm_term=”JRDE” utm_content=”wwjbpnormsbar_jbp_sidebar” keywords=”jason-bond”]

[adzerk adTypes=”3834″ popup=”true” delay=”3″ cookie=”1″ keywords=”jason-bond”]