Approach

Trading ideas discussed in The Money Tree result from the editor’s application of a methodology and software developed by Ron Groenke.   Ron is the author of 4 books on the subject of trading covered calls and naked puts.  His most recent book is Show Me the Money: Covered Calls and Naked Puts for a Monthly Cash Income.

More information about Ron, his software, VISIONS Stock Market Explorer Scout, and his books is available at his web-site, www.rongroenke.com

Covered call (CC) trades will primarily be entered using selections derived from running the VISIONS V Technical Analysis Model (VTAM) and the Show The Trade functionality.  Show The Trade is a breakthrough in the attempt to determine when to buy and sell any stock or ETF. It is based on years of technical analysis development, investing experience, and application of the VISIONS concepts and techniques.  Show The Trade is based on the realization that stocks have their own unique trading pattern.  A one size strategy of when to buy/sell does not fit all stocks. 

Naked Put (NP) trades will primarily be entered using selections derived from the editor’s own proprietary Deep OTM NP Strategy.  A key component of this strategy is use of the VISIONS Put Factor (PF) calculation.

The editor of The Money Tree may, on occasion, choose to enter CC or NP trades which do not conform to the approaches outlined above.  These trades will be clearly marked as not following either the Show The Trade or Deep OTM NP Strategy approach.  In addition, the editor will clearly outline the approach used and his rationale for deviating from the standard.

CC trading ideas presented in The Money Tree are selected using the criteria outlined above with the objective of achieving an annual return of 25% (2.083% / month).   NP trading ideas using the DEEP OTM NP Strategy will be selected with the objective of achieving an annual return of 15% (1.25% / month).