Tutorials with InFabric

TUTORIAL: Find Your Best Stock Option

By March 9, 2021April 7th, 2021No Comments

There’s a common phrase that as much as 90% of people lose money trading stock options.

Between the overwhelming amount of stock options to choose from, both puts and calls, and the danger of choosing the wrong one, it’s very easy to see the truth in that statement. 

Then why are options such a movement?!  The answer: Options have the highest potential for earnings!

Sure losing money with options can mean losing 100% of your investment, but you could also gain 100% in the short term. Waiting two years for an investment to grow is a less risky route to take, but we all know, greater risk greater reward. 

Now here lies the issue for these roughly 90% of investors losing money in options. Choosing the option that will make them money. It’s as simple as that, yet the process can be unbelievably complicated. InFabric takes all the guessing work out of this step.

STEP 1

You have an underlying stock in mind – let’s say Apple Inc.

Ignore the fact that there are thousands of stock options associated with AAPL. That doesn’t matter when you have access to InFabric Flow. 

Let’s log in. 

STEP 2

We want to have the best strategy for AAPL options trading, so let’s add a Strategy. You’ll see pre-configured strategies created by our InFabric AI Assistant, but let’s create our own for this one.  

Go to Your Own at the furthest right and enter your underlying stock ticker AAPL. You can choose whether you believe AAPL to be bearish, will drop in price, or bullish, will grow in price. Go ahead and keep it on AI, which is InFabric Eve’s prediction of AAPL stock based on a tremendous amount of data points. 

STEP 3

A little more detailed here, you either have a date in mind of when you’d like to get out of this position with some cash in hand, or you’re unsure. 

You’ll notice a date is already in the Expiration Date section. If you don’t have a date you’re committed to, you won’t change anything in this step. The date that’s chosen was chosen by AI Assistant as having enough profitable options worth your while. 

If you know the date you want to exit the option, you’ll update the Expiration Date field to have this date. So say I’d like to get out by April of this year and I see AAPL has options expiring 3/26/2021. I’ll change the date here, and delete the prior AI chosen date. 

Note

If you change the date, be sure to update the graph’s range by clicking Projections, then changing the date in Projection End-Date. If not, your chart may show many options in the red since those options expire within the range of the chart.  

PAUSE

Click View Results to see which options you’re working with. You’ll see Flow lines which represent stock options and their projected value. At the top-most point all lines meet since that is Day 0 – Today. That’s your starting point. From there an option will either gain money or lose money. 

STEP 4

At this point you may consider that you expect AAPL will grow more than AI is predicting. Maybe you expect AAPL to drop more than AI is predicting. A quick view of this data is at the top of the chart in the area highlighted. The way to edit this is to go back into Analysis Properties by clicking on the lower right-hand circle. 

You’ll see under Projections there is a toggle for AI and a number in Target %. Since I’m not sure how AAPL will perform, I want to leave this data untouched. I’m letting InFabric’s millions of data points provide the projection percentage AAPL is most likely to perform. 

But, say you have been doing your due diligence and have a very good idea of how AAPL will perform. You’ll click Projections, un-toggle AI, and enter a new number for Target %. AI is predicting AAPL will grow 8.04% but if I wanted to see which options are best if it only grows 5%, I would enter 5 here.

Note

When AI Toggle is on, the Target % is projected based on the Projection End-Date.

Just as the market changes continuously, the Target % is updated continuously when the AI Toggle is on. This will be key for keeping track of any adjustments you’ll want to make to your strategy as the days progress.

STEP 5

View Results!

At this point you will see exactly which options to buy. You’ll know the option that will bring you the most money, the options that are projecting to perform better than the stock itself, and the options that will lose you money. 

By clicking on the line itself, highlight the Flow line furthest to the left if you want the highest reward stock option.

Right now I want to go for medium risk high reward, so let’s choose an option higher than the underlying stock but not the highest here.

Note

If you’re having trouble seeing the stock Flow line, go back to Analysis Properties by clicking the bottom-right circle. Then click Highlight, and start typing Stock. Click AAPL Stock. View Results, and you’ll clearly see any option Flow line to the left of the line labeled AAPL Stock is performing better. 

STEP 6

Go back into Analysis Properties through the bottom-right circle, and enter in the amount of options you’re looking to purchase. Let’s enter 2 here.

Now I can check what my AI Assistant Eve has analyzed about what I chose. Profit projected is $1,506 and Success Rank is High! I see my risk level with $2,746 Max Loss Potential, but I know to keep track of the progress to make sure I exit at the point of maximum profit and minimal loss. 

Don’t forget to Save! Click the bottom-right circle to view Analysis Properties, and click Save at the top right. Name your Strategy here. 

Note

If you ever make changes, follow this save process again and keep the name the same. It will update for you. If you wanted to save a new version, go through the same steps but enter a new name. 

Now you have it. You’ve chosen a Strategy and you’re on your way to making money!

Start with one option, or choose multiple to build a plan for wealth. You can build a strategy of multiple different underlying stocks, so feel free to get creative! InFabric Eve will help guide you along the way.  

Join the 10% of investors earning money in stock options. There will always be an overwhelming amount of options to choose from, but choosing the right one is achievable with InFabric’s help. 

Have your money work for you now, not later. Find your next profitable option with InFabric.  

Create Your Best Strategy