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Josip Causic

 

Before starting his professional trading career as an LLC, Josip was an educator. He taught English at the University of Toronto, and, since his relocation to the United States has also taught science and math at various private and public institutions. During this period Josip also completed an additional degree at Cal State Fullerton.

Later, after being accepted to UC Riverside, he interviewed several of his future professors and role models. In his own words: "I was completely disillusioned, as most were financially insecure despite their extensive education. Obtaining a doctorate certainly does not equal financial stability."

It was this revelation that caused Josip to change couse, investing time, energy, and resources into becoming financially literate. Early on he realized that market psychology is a major part of trading so he invested heavily in workshops. At first Josip's trading style revolved around the CANSLIM method, a combination of fundamental and technical analysis. Yet it was only after his encounter with former market makers that he merged his retail trading experience with the methods used by floor traders. This gave him an immediate edge. At this juncture he came to Online Trading Academy for fine-tuning because Online Trading Academy instructors are all market professionals. He bought all the programs Online Trading Academy offered with the intention of becoming a member of the instructor pool.

Josip is very excited to collaborate with Online Trading Academy, for he strongly believes in the mission of transforming lives. He has stated his firm belief that any student-trader who is both willing and open-minded to embark on a journey of personal growth through trading will mature beyond his wildest expectations. He goes on to conclude that those traders who are persistent enough to adapt to the constantly changing economic landscape will become examples for future young traders the world over. In class, Josip uses his hands-on experience of options trading, both directional and volatility plays, to teach students to be successful traders. He particularly loves to focus on teaching the risk adverse options strategies such as time spreads and iron condors.

 

Going Delta Neutral with DX and SPY by Josip Causic

This week's article takes note of the inverse relationship of the U.S. Dollar, and the equity market and how you could use both to make a delta neutral trade... READ MORE

 

Some Thoughts About Trading and Other Answers by Josip Causic

In this article, I will comment on several emails that I have received from students on various topics relating to option trading. This is not really just a question and answer newsletter, but rather a clarification of the correct ways to think when looking at trading, and a clarifying look at weekly options... READ MORE

 

Overly Aggressive Trades on the Weeklies

Recently, I received an email asking me to comment about the selection of weekly credit spreads. One glance at it made me realize that there was so much more to this than meets the eye. Here is the actual email that was sent to me on Friday, November 12, 2010... READ MORE

 

Being in a Wrong Trade by Josip Causic

The name of this newsletter comes from an email that I received just the other day. The subject line of the email read: Please help. I gave my attention to it right away for I knew that it was an Online Trading Academy student that I had given my email to recently. She basically asked me to analyze her trade. She knew that something went wrong but could not figure why and how... READ MORE

 

Iron Condor trade Analysis by Josip Causic

The last week's article, Getting a Better Fill, addressed the topic of complex spread order execution. Yet, according to the emails that I have received, not everyone understood the actual trade. The point of the previous newsletter was not necessarily to teach the strategy, but to explain how sometimes splitting the execution of an iron condor into two short verticals can produce a more desirable fill... READ MORE

 

Getting a Better Fill by Josip Causic

Ever since the inception of weekly options on the major ETFs, I have been trading them consistently, though I have only written about them sporadically. In this article, I will go over a lesson about complex spread execution on the weeklies. I love to enter my short verticals, or Iron Condors, just before the bell on Friday afternoon. The logic behind it is very simple: Sell the theta over the weekend, and suffer limited market exposure due to the fact that over the weekend, the markets are closed. Certainly, there is always a possibility of a gap up or down, which I am willing to take. Rewards are always tightly connected with the risk... READ MORE

 

Pitching a Covered Call with TradeStation by Josip Causic

Back in March and April of this year, I wrote a couple of articles on the topic of Covered Calls, Which Covered Call to Sell and When? and Covered Call: Part II, and was under the impression that I had done justice to explaining this simple option strategy. The other day I received an email from a reader who had taken time to read both of the above mentioned articles. The email stated a great disappointment for not providing an example of how to execute a Buy-Write Covered Call strategy on TradeStation; hence, this article... READ MORE

 

What Just Hit Me? VZ! by Josip Causic

The name for this article is due to a losing trade which a student emailed me to analyze. She knew that she was losing money on it yet when she was assigned almost two full weeks before expiry, she needed some explanation. After emailing me back and forth several times, I asked her for permission to share her painful lesson with our readers. Permission was granted under the condition of anonymity... READ MORE

 

A Repair Strategy (Debits) by Josip Causic

In one of my most recent option classes in Overland Park, Kansas, we were working on a vertical debit spread. I have covered in these newsletters the topic of debit, as well as credit spreads in great detail. However, I have not dabbled into the repair aspect of a trade and that is exactly what Curtis, a Kansas option student, asked me to do. In order to lay out a clear and concise case, I will first start by explaining the trade and then in part two, I will proceed to an adjustment... READ MORE

 

50 Cent Strikes Spreads?!? by Josip Causic

Recently, I was teaching an option class in Overland Park, Kansas, and we were looking at placing a short vertical (Bear Call) on JPM. We noticed that the underlying did not trade over 42 for awhile, hence, we selected the 42 zone as the correct place to sell the short call... READ MORE

 

Derivatives of the Derivatives by Josip Causic

In this article, I will look at the E-minis, which are a derivative of the S&P Cash Index, and at the options on the E-minis, which would in turn be a derivative of the derivative. I will explain how they each work in isolation, which will help demystify how the other one functions as well... READ MORE

 

Importance of the Financials by Josip Causic

This article will elaborate once again on the crucial importance of the Financials. In order to lay down my case, I will break the article into three segments and each will build on the previous one. Every one of these segments is going to address something that may not be transparent to the eye of the beholder. A clear pattern will emerge at the end... READ MORE

 

Huge Swings in Volatility by Josip Causic

In this newsletter, I will address one of the questions that I have gotten in my email box. It is on the topic of huge swings in the implied volatility on an individual stock. In order to get to the bottom of the issue under discussion, I have utilized the CBOE's Option Calculator. Here is the question that I was asked... READ MORE

 

Delta Part 2: Delta as an Approximate Measure of Probability by Josip Causic

In this article, I will continue discussing the Delta, one of the Greek option components. I also will provide an example of using Delta as an Approximate Measure of Probability. Online Trading Academy offers a two day Option course in which the five Greek options components are discussed in depth. One of the slides in the Introduction Option Curriculum is called Three Views of Delta. Each of the three points is defined in the following way... READ MORE

 

Delta as a Hedge by Jospi Causic

In this article, I will discuss a concept that is somewhat vague to many novice traders. First, I will define Delta in the most traditional way, and then I will provide an example of using Delta as a hedge... READ MORE

 

Stop Losses by Josip Causic

Recently, I was invited to be on Power Trading Radio for a brief discussion on the topic of options, Focus on Options, July 7, 2010. During the show, I was asked a question about option trading and the placing of stops. Although I answered that question right there and then, I felt that the topic of stop losses and options needed to be explained in more detail. In this article, I will share one of my anonymous current long trades... READ MORE

 

Weeklies on the GLD by Josip Caausic

In this article, I will share with the readers some great news: The weeklies have finally arrived on the GLD (SPDR Gold Trust Shares). By the time this article gets published, the trade that I have placed will be completed. I am going to walk the readers through my thinking process for placing a Bull Put (short vertical) spread on the GLD using the newly listed weekly options... READ MORE

 

Why am I Losing Money on this Trade? by Josip Causic

I have received many different emails from students with their trades, yet seldom do I share their painful lessons with the general reading audience. In the last three years, I have done that only twice... READ MORE

 

Newly Listed Weekly Options: Part II by Josip Causic

It has been a while since I have shared some of my trades with the general reading audience, so this time, due to the fact that the new weeklies on SPY, DIA, QQQQ, and IWM are in the game, I will oblige that request. Here we go... READ MORE

 

Systematic Steps for Option Trading: Part II

I often get emails from our students asking me to comment on their trades. In this newsletter, I will comment on one of the most recent emails and give my take on it... READ MORE

 

Newly Listed Weekly Options on the SPA, DIA, IWM & QQQQ by Josip Causic

Back in 2008, I wrote an article on the weeklies, Weak Weekly Options, in which I pointed out what little interest the weekly options had generated in the USA since their inception. I had also expressed the hope that "someday," things might change. The day of that change came on Friday, June 4, 2010, the same day the Dow tanked 323.33 or 3.15%... READ MORE

 

Importance of Open Interest and a Tight Bit and Ask Spread by Josip Causic

Often students share with me their open option positions, asking me for my opinion of their selections. I have noticed that there is a pattern in the type of mistakes that the novice option traders frequently make. They can be grouped into three areas. They are: (1) low open interest, (2) unwinnable bid and ask spreads, and (3) wide spread between the offered strike prices... READ MORE

 

Systematic Steps for Option trading by Josip Causic

Every successful trader must be very methodical and systematic in his or her trading approach. Josip has taught in past articles precisely how he walks through the system he uses before placing an option trade. In this article, he uses the steps in that system on a recent, specific trade that he made... READ MORE

 

Always Buy Back Your Obligation by Josip Causip

I n this article, Josip explains the reasons why you should buy back your options obligations on a credit spread during the expiry week for a nickel or less, ALWAYS... READ MORE

 

Comparing the Verticals by Josip Causic

In this article, Josip explains how to use either a short vertical or long vertical depending on our market forecast. For simplicity's sake, he will stick to the same option class; in this case to the call side. The verticals that will be addressed are also known as a Bear Call and Bull Call... READ MORE

 

Why was I Assigned?!? by Josip Causic

In this article, Josip explains how, even after the market close, an option could go against you and lead to an unwanted event - an assignment... READ MORE

 

Want Free Stock Insurance? by Josip Causic

In this article, Josip explains the low-risk option strategy that virtually provides free insurance on long stock... READ MORE

 

Covered Call: Part II by Josip Causic

With regards to one of the most popular option's strategies, Josip addresses the definitions of two terms (Buy-Write and Legging In) and a timing tool (MACD) that he uses... READ MORE

 

Get a Trading Buddy: Part III by Josip Causic

Although the plan initially was not to write three articles on this topic, Josip's email box told him that there were several issues that still needed to be addressed on this essential topic of trading buddies as well as other lessons that need to be learned on the road to becoming a Pro Trader... READ MORE

 

Which Covered Call to Sell and When? by Josip Causic

In this article on the topic of Covered Calls, the first question Josip will answer is Which Covered Call to Sell? The second one will deal with the timing issue (When to Sell a Covered Call?)… READ MORE

 

Butterfly: Part VI by Josip Causic

Josip discusses Butterflies and Greeks, specifically how price affects Theta in a butterfly trade. This is the final article in the series on the topic of Butterflies... READ MORE

 

Get a Trading Buddy: Part II by Josip Causic

In a continuation to Josip's article from two weeks ago, he discusses some of the ins and outs of finding and keeping Trading Buddies as an answer to a student email... READ MORE

 

Butterfly: Part V by Josip Causic

Butterflies are a great option strategy for when you don't anticipate huge movement in a stock. In Part Five of his continuing series on Butterflies, Josip presents the steps involved in placing a Put Butterfly on TradeStation. This is the second to last article in this series… READ MORE

 

Spell Out Your Trading Plan and Get a Trading Buddy: Part I by Josip Causic

In this article, Josip shares a story of an options student who was able to take Online Trading Academy teachings about options, apply them, get cash flow going, and supplement her regular annual income at first and then eventually embark on the full-time journey of just trading for a living. He will focus on two points of this example: Having a trading buddy and also a trading plan…

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Butterfly: Part IV by Josip Causic

At expiry, the price of an underlying on a Butterfly trade can end up anywhere. Josip presents just 5 of the possible outcomes on the call Butterfly trade he has been covering for this series on Butterflies… READ MORE

 

Creative Financing by Josip Causic

Josip demonstrates an example of creative financing. Namely how to use the credit received from selling a vertical spread to finance long directional premium… READ MORE

 

Butterfly: Part III by Josip Causic

To follow-up his previous two articles about the option strategy known as the Butterfly, Josip looks in greater detail at the intricacies of a specific Call Butterfly that was previously placed… READ MORE

 

Butterfly: Part II by Josip Causic

In his second installation to his series on Butterfly Spreads, Josip walks us through placing a Call Butterfly spread step by step using the TradeStation platform… READ MORE

 

Butterfly: Part I by Josip Causic

The first in a series of several articles that will address in greater detail the option strategies known as Butterflies. In this one, I am trying to introduce the basic concept of a Butterfly without providing any specific examples… READ MORE