How To Grow Your Portfolio Through Options Investing | Cashflow Hacking Ep #15 Kirk Du Plessis
How To Grow Your Portfolio Through Options Investing | Cashflow Hacking Ep #15 Kirk Du Plessis
Kirk Du Plessis, founder and CEO of Option Alpha, joins us on the podcast to discuss how trading options can better define risk in your portfolio, and increase your returns well above the market average. As an experienced options trader, Kirk has not only taught thousands of investors how to better control risk in their portfolio through buying and holding options, but how to more efficiently use the limited equity that they have within their portfolios to maximize their returns. Now, he shares his strategies with Casey, in hopes of informing more investors worldwide to the possibilities that lie before them using options wthin their portfolio.
Video Version Of The Podcast
People & Resources Mentioned
Podcast Transcript
Intro: 00:07
This is the Cashflow Hacking Podcast with Casey Stubbs where you will learn the tips, tricks, and strategies to increase your cash flow. And now to your host, Casey Stubbs.
Casey Stubbs: 00:21
Hello, this is Casey Stubbs from Finance and Markets and we’re here today with Kirk Du Plessis, the founder of Option Alpha. Hey Kirk, how are you doing today?
Kirk Du Plessis: 00:29
Good man. How are you doing?
Casey Stubbs: 00:31
Great thanks for being with us on the show.
Kirk Du Plessis: 00:31
No problem.
Casey Stubbs: 00:37
All right, so we’re gonna be talking today about options because you’re an options trader and this show is all about adding additional cashflow into your pockets. Doesn’t necessarily have to be trading, but since you’re an expert, we want to get all the information we can today about trading.
Kirk Du Plessis: 00:51
Cool. Let’s do it.
Casey Stubbs: 00:53
So how did you get started, involved with options?
Kirk Du Plessis: 00:58
It was not a traditional path. So, , so I got started in finance I guess just like right out of school finance, always loved finance. Went to University of Virginia. Graduated with a finance degree. I thought I wanted to be an investment banker because everybody was an investment banker that graduated with me. So it’s like the natural progression. So I went to New York, worked for Deutsche Bank for a little bit and mergers and acquisitions. Realized I absolutely hated that business and it was terrible. Not like the people who were terrible, but like the hours were terrible. You just never saw sunlight and you’re stuck in an office forever. But during that time I got a rotation on that driven derivatives trading desk and that’s where I got like, I guess my official introduction to the option side of the business. So I spent some time after that I moved to DC and spend some time working in reef as read analyst. I would do research and publish reports on real estate investment trust since all the other side of the Chinese wall. So I was on the private side, it was on the trading side and then I’m just going to research and kind of like the public side.
Kirk Du Plessis: 01:57
And ultimately I just hated that business to. I don’t hate the business. But it’s just so subjective. You can make a company look, you know, as good or as bad as you want based on growth numbers. And you know, how fast the revenue, how, you know, fast expenses are going to grow or not. And it’s just, it’s kind of a, I don’t know, it’s a really subjective business. There’s good guys out there. She said it wasn’t a good fit for me. But during that whole process I started trading and then after that I just started trading at home by myself and my wife was fortunate enough she’s a teacher that we were able to, you know, live well within our means and be able to make a go with this. And so it’s been over 10 years now. I’ve been trading so.
Casey Stubbs: 02:36
And so you’ve been doing this for 10 years and you’ve just fully so focused on trading options.
Kirk Du Plessis: 02:42
Yeah I mean like we do other stuff. Like just for full disclosure, I mean like we have real estate that we invest in so it’s not that like every single dime to like 90% of what we have is invested in options. Right? So every time that we take something from real estate or like options will take maybe just a little bit and like put it into another real estate deal. But I mean like 90% of stuff we have is an options.
Casey Stubbs: 03:02
That’s actually a really smart financial strategy, which is when I really recommend is you take your earnings from one area, you save it, and then you invest it in another area to make additional cash flow.
Kirk Du Plessis: 03:14
Yeah. Well, you got to level out your income, right? Like it’s gotta be a diversified portfolio of income anyway. Right? so..
Casey Stubbs: 03:19
Yeah. I actually learned that when I read a book called the Richest Man in Babylon, they teach you about taking 10%. Live below your means, take 10% of what you..save 10% and then reinvest it in something and use that to make extra money. And I’ve been doing that and also. It works really well. So I wanted to ask you a little bit more about the actual options trading itself. So you’ve been doing it for 10 years, how long did it take you before you really figured it out? And were you able to be successful on a continuous basis.
Kirk Du Plessis: 03:52
So I think the first week was like my literally my worst week and that was okay. And I think I lost like five grand the first week and my wife was like, hey, if this is what’s like, your life is gonna be. She’s like, you need to rethink this. Right? But like, so when I was in New York and I saw that side of the business, which is, you know, extremely hyper frequency playing an edge like working in this space and like not like deviating out of like the space that you’re in, you know, I, it seems like I just like totally threw everything out the window. And I was like okay, I wanna I, I, you know, I’m super smart so I can day trade and I can do this and I can pattern read and I can chart read and I know where the markets are going.
Kirk Du Plessis: 04:30
And ultimately none of that ended up being true. Like I’m terrible at day trading. Like everyone else is. I can’t read charts. I have no idea where the market’s going and I don’t have like a definitive edge trying to be an individual investor in the market. I have to work some sort of mathematical expectancy model or probability model that has an edge, right? So the first week was just me just trying to figure out all this stuff in and ultimately falling flat on my face and I couldn’t do any of that. And so I went back to the kind of the drawing board per se, and I started to, you know, figuring out like, okay, what did I learn, what did I, what do I know, what am I don’t know, like what are things I can control? And that’s what eventually like really, I mean at that point it was already like options focused, but I was trying to really dig down deep into the numbers and it’s been like a mission of mine just to like data mine what options trading is, how it works and you know what doesn’t work.
Kirk Du Plessis: 05:20
I mean like, so the last 10 years as we’ve kind of built our platform and program anyway. I mean, like to me it’s just all repetitive in buying more data, figuring out, reading more analyses, back testing, optimizing strategies to figure out like there’s a mathematical model that works in this business and what is that model, right? Like there’s an expectancy model that works just like in a casino or like an insurance business and if you can figure out like the general gist of that, you should be okay long-term. And , so it takes time, you know, to kind of get into that business and understand the patience that’s required and the mechanics that are, that are required each day. But ultimately you have to work a system that has some sort of mathematical expectancy and output performance in the market. , and from there it’s just about risk management I guess. So that’s how I kinda got started.
Casey Stubbs: 06:06
Now if somebody who’s listening or watching this video is really wanting to find some extra cash flow, you know, they just, they’re working or they don’t like their job or it’s just not enough. , what do you think you would recommend to them if they were starting out? Didn’t know anything about options? And wanting to get started.
Kirk Du Plessis: 06:25
Yeah, I think so this question has been brought up a lot, right? With people always ask like what’s the one thing I can do right now? Right. So one thing you have to understand about all investing is that most people’s returns are derived from cost basis of when they get into an investment rights. So it’s a pretty simple model and like philosophy, but people actually don’t think about a lot and that’s just purely that. Like where you buy in derives a lot of like what your expected returns are. Right? So if you buy in at the bottom of the market, you can be totally stupid in what you’re doing, but you’re buying in at the low valuation of everything. So everything goes up and you look like a genius. Right? So a lot of your returns are based off of, you know, where you bought in and kind of that cost basis.
Kirk Du Plessis: 07:06
So with options, if you think about cost spaces, like how do I reduce the cost of ownership of, say stock, because most people transition from stock options, right? They don’t ever, in my opinion, they don’t ever go directly from, you know, nothing to options trading, right? There’s always some bridge. So I think the easiest way to do it is just to do a simple cover call. Right? Now I’m a 100% of proponent of never using stock, right? Like I think equity and stock is insanely inefficient. It takes up too much capital. You can replicate the same position with options. You don’t need to use stock at all as part of your portfolio. But let’s say you do have stock, well you can sell a simple covered call strategy and what that does is takes in some premium and you basically people call it renting out chairs or whatever you want to call it, but you take in some premium.
Kirk Du Plessis: 07:49
That premium then reduces the cost basis of the ownership and the shares. So if you have stock and say $100 a share, and you own 100 shares? You sell a covered call for say a dollar. Now your cost basis is reduced on a $99. So if the stock stays right where it is on hundred dollars, you actually made a little bit of money, so it’s just like slowly chipping away at that cost basis that helps. The interesting study around this and you don’t even have to look at like our stuff. You can go every place and look at the CBO, he’s done it and has text on it. , oh I see. He’s done studies on this. A very simple like one hour a month strategy where you’re simp simply selling a covered call actually outperforms the market, right? So you, all you have to do is just, if you want to buy an index and be an index investor, fine, but then layer on top of that options and you outperform the market with less volatility, like one trade per month.
Kirk Du Plessis: 08:37
Right? That’s insane to actually think that that happens. But people are always trying to beat the market. If you just layer in like literally one option strategy on top of an index fund, which everyone’s raving about right now is all these index funds. You outperform the market with less volatility. So like, I don’t understand why more people aren’t doing it. That’s my mission is to get more people doing it.
Casey Stubbs: 08:57
Right, I think that sounded really exciting to me. Just listening to it. There’s a couple things I need to clarify. First of all, it’s not an incredibly complicated. And I was like, I had no idea of half the time what you’re saying, but, but the thing that I did catch was only an hour a month, right? So you’re saying an hour of my time a month..
Kirk Du Plessis: 08:57
Minimum
Casey Stubbs: 08:57
Minimum
Kirk Du Plessis: 09:24
No, no let’s say it maximum. I’m saying slow dial up. You don’t know how to type on a keyboard and it takes 10 minutes to log into your broker account, you know. But look, the idea is literally like as long as it takes you to go in every month, so one covered call per hundred shares of index, you know, whatever you have, that’s it. That’s all you need to do literally and you outperform the market.
Casey Stubbs: 09:45
Okay, so you say outperform the market. You’re talking like what, 12% a yearly return.
Kirk Du Plessis: 09:49
So like let’s say the market does say 7%, which is like maybe like an inflation adjusted average of where things are good, so like seven percent you might do like seven and a half percent, right? So it’s not a huge out-performance but you have dramatically less volatility. So I still think it’s an inefficient strategy, right? Like so on our spectrum of performance to risk. A covered call is like the lower end, right? Like it just starts the ball rolling into how you should use options and leverage option strategies, but at least you start inching your way up towards higher performance, lower I’m acceptable variance in your portfolio and risk.
Casey Stubbs: 10:25
And that’s a great entry point to learn, especially if you don’t have a lot of times. So you’re saying that would, that would probably be one trade a month.
Kirk Du Plessis: 10:35
One trade a month. I mean you could literally like no joke if you call your phone like you could do it on your phone every single month. Like as you’re just waking up and having coffee. Like I don’t understand why more people don’t do it. It’s insanely simple. It’s the easiest thing you can do, it’s, you know, and again like check all the resources, like don’t just trust what I’m saying. I’d say like check CBO. Like everyone’s done studies on it and I don’t know why, like why people don’t do it, but I’ll tell you why. Here’s why people don’t do it. It’s the same reason why people don’t go to the gym and don’t eat healthy. Right? Like you know, that that’s what you should be doing to be healthy and physically fit, but yet you just like, you actually have to go to the gym.
Casey Stubbs: 10:35
Well, right.
Kirk Du Plessis: 11:11
Right. Yeah. And it’s the same..
Casey Stubbs: 11:12
Yeah. And it’s also the same reason why people don’t control their spinning and they don’t get out of debt.
Kirk Du Plessis: 11:12
Totally.
Casey Stubbs: 11:18
You know, I mean anybody can do it. You just gotta want it.
Kirk Du Plessis: 11:21
Yeah exactly. It’s not like rocket science, like I’m not saying something that people can’t do. It’s insanely simple and easy to do and you just actually have to do that.
Casey Stubbs: 11:29
Okay. So you teach these kinds of things at Option Alpha. If I today wanted to go ahead and learn this one hour a month strategy, which I’m, you know, I’m always trying to add a new revenue source. So I might, I might actually do that. I can learn that on your website?
Kirk Du Plessis: 11:47
I mean look, so Option Alpha started as a blog and I was basically blogging about all the things I was doing right on things I was doing wrong and people just start asking questions. They said, well, what, you know, what is an option contract and how does it work and what happens at expiration and what if I don’t have the money to cover the stock and you know, a million other different questions. And so we basically just, you know, over time just built out a huge library and bank and resource of you know, training and content and education and , and honestly like it’s, it’s made a lot of people mad and I’m okay with that because we’ve been giving it away for free for 10 years. And so people are take that we give away so much free training and content that, you know, other companies, I’m not gonna name names, but other companies charged like $20,000 to, you know, to go through a course on options trading and have no justification for it. They don’t have the data to back it up. It’s just theory. They’re just like regurgitating what they can find on investipedia. , so yeah, it’s all free and available. There’s no catch. No, I mean like it’s just literally free time. I doesn’t take away my time so I give it away for free.
Casey Stubbs: 12:46
Well that, that’s a great resource and I, I think I’ll probably take you up on that. And so again, to kind of hit the beginner side of things, that sounded a little bit complicated. So, so I think it’s an hour. I get it an hour a month and that’s for somebody that maybe knows what they’re doing, but there’s probably a pretty steep learning curve if I’m like a total beginner, right?
Kirk Du Plessis: 13:07
I don’t think so. I mean like look, everything in life has its own like terminology and like a innuendos that you have to crossover, right? Like I couldn’t start talking about, you know, rebuilding a car unless you knew like what a motor was and what spark plugs were. So I think 90% of it is, just understanding the terminology. I’m mean, like the concept of options trading is actually very simple and it’s not a hard concept to understand. And we try to kind of break it, you know, break it down into bite size chunks that people can learn. , but I don’t think it takes, I mean, it’s not any more complicated than Algebra. I mean, it’s really simple stuff.
Casey Stubbs: 13:41
Okay and that particular strategy is a covered call. And if there was somebody that wanted to do a little bit more than that, what, what would an another step be after that?
Kirk Du Plessis: 13:51
So here’s my biggest. So here’s my biggest like robing this entire industry. So everyone’s looking for the magical unicorn, right? And when I have a hundred percent learned is that there’s no one strategy that fits every scenario, right? Like you can’t use a fork in every single environment to cook, right? Like you need sometimes a ladle and a spoon and a knife, right? And so when people are trying to do is they’re trying to use one single strategy, like say advanced option strategy in every environment. So there are strategies that work in different environments and that’s, that’s what I like about options trading more than anything else. So if you think about stock. Stock, you have two choices. Most people think they have one, right? So most people think okay, I’ll buy a stock or not. But you can sell short stock and then buy back in. That’s another choice, right?
Kirk Du Plessis: 14:36
But in Options you have like another dimension of trading so you can wait if you think a stock is gonna go higher, like immediately, like right now. Okay, well that’s maybe one strategy. What do you think if you think a stock is going to go higher, but it might take two years for that to happen. Okay that might be another strategy. What if you don’t even care where the stock goes? You just want to, you know, play a stock and arrange. Like, I don’t know if it’s gonna go higher or lower, but I don’t know what’s gonna go, you know, I know it’s not gonna go more than $10 higher or more than $10 lower. Okay. There’s another strategy for that. So I think when it comes down to options trading in general, it’s trying to piece together like market expectations and the strategy that works best in that environment.
Kirk Du Plessis: 15:13
So that’s where you have more complex strategies. I mean there’s so many that people use, but the basis of what we do, is just a lot of options selling. So we’ll just be very similar, like an insurance company. We just sell insurance contracts, options contracts all over the place. We’re not trying to pick and choose, you know like directional risk and winners for trying to stay balanced and neutral and just play the edge that we have.
Casey Stubbs: 15:37
Okay now I’m gonna keep this conversation on the beginner side of things and I’ve met a couple options traders and maybe they weren’t technically options traders because they lost a lot of money. And so if I’m a beginner, I’m, I’ve heard about these stories and I’m really afraid that I know this guy who just lost $30,000. So if I’m gonna do this one hour a month and I’m gonna get beat the market, how do I know I’m not gonna lose everything?
Kirk Du Plessis: 16:05
So in the case of like a covered call, right? You’re covered by your own stock. So the worst case scenario that happens, I don’t even say like the worst thing that happens is the stock goes down, right? And that’s gonna happen anyway, whether you do the cover color now, right? So if the stock goes down, at least you reduced the cost of ownership. So you’re better off doing a covered call. And to use our example of the stocks trading at $100, you sell a covered call for, let’s say a dollar. Now you own the stock theoretically at $99. If the stock goes down at least own a 99, right? So like there’s not too much downside risk in that, right? And you have everything covered, doesn’t require any additional capital, doesn’t require an inch margin and you’re not risking any more money than you would have initially.
Kirk Du Plessis: 16:47
So, so it’s a good strategy to use, right? I think the bad rub that options trading gets all the time is people who go like crazy and buy a bunch of lottery tickets and then they blow up and my response to that is always like they, they are like, you should have blown up. You know what I mean? Like I’ll get people who email me and they’re like, Kirk, I lost $30,000 on a trade and I know that’s half of my account. I’m like good. Like you shouldn’t have been doing that trade at anyway. You know what I mean? Like don’t ever risk that much money in a single position that you don’t know if it’s going to win or not. Like you wouldn’t buy half of your net worth and lottery tickets tonight, right? Like it’s just a bad mentality, but people do it. And those are the stories we hear.
Kirk Du Plessis: 17:24
Options trading however, is super, super risk control. I mean like more so than stock. You can exactly define how much money you want to win, how much money you’re willing to lose, and what the probability of success is. It’s all known information. It’s not unknown information that you can’t find in the market. Right. So, , I think that’s the key for beginners is like don’t look at it as, you know, all I could lose all this much money. It’s like you only lose as much as you’re willing to put up and risk. Right? So if you’re willing to put up 50 percent of your account for one trade, good luck. Right? Like I hope it works out. I mean like he gets that done in a very simple money management principles. Like nobody should be investing more than five percent in one single ticker symbol. Like under any circumstances. Like I don’t care how good the trade looks like, you just don’t know if this is the one time where it’s going to turn around and be bad. So I don’t know, I think it gets back down to like very simple money management.
Casey Stubbs: 18:20
So basically you’re saying that when I hear those stories, when I’m talking to people, I should probably just say good. You deserved it.
Kirk Du Plessis: 18:29
Totally. I do. I mean like, look, It’s buyer beware in every investing, right? Market people play dumb, like they’re ignorant to their financial situation and they’re hoping for a big win and so they invest all of their money into one single trade and then when they win they have a false sense of positive reinforcement, right? Because they won, they think, okay, this is the right way to do it. And so they do it again and again and again, and then they end up blowing up themselves.
Kirk Du Plessis: 18:53
Look, I have no literally no remorse for people who willingly know that they’re investing half their money or 25 percent of their money into one like crazy, like long shot. I have no remorse for people for that. I don’t know if that’s called selfish on my end, like people are adults. Like we’re all adults here. Like, you know, we’re not children. We work for our money, we earn money, we know what the heck we’re doing, so.
Casey Stubbs: 19:16
Well that’s a great illustration for beginners because I think beginners might not be aware that it’s totally controlled. They just hear the story. So when. So basically the people that are losing are high risk and they’re going for home runs…
Kirk Du Plessis: 19:32
Yeah, most of the time I wouldn’t say that’s everybody. Right? Like so you take like an option buyer. So like say you bought an option contract and I sold you that contract. That doesn’t always mean I don’t want to like categorize everybody say like everybody’s done that buyers options. Like you could be doing that for a hedging purpose. Like you buy insurance on your house and your car and like everyone does, like we buy insurance on our homes in case they burn to the ground. That’s like buying an option contract and the insurance company is selling us an option contract back. Now when we lose on that insurance contract in our house doesn’t burn to the ground. We’re not mad about that, right? but we lost money on that bet and so it’s the same methodology and options trading, is I’m just ensuring a lot of other people’s, like potentially dumb mistakes or you know, big hedge positions that they don’t wanna take. I’m willing to take that risk for a premium and a payment and over time I know I’m gonna get more than I’m going to pay out.
Kirk Du Plessis: 20:24
so it doesn’t mean that people are necessarily bad, but that’s like the stories that you hear, right? Like you hear people who try and I like see, I literally see it all the time in my phone right now. Like I’m on part of all these groups for like Robin Hood because it’s all free commission trading right now and people are literally blowing up their accounts left and right. And I’m like, you shouldn’t do that. Like, I’m like, that’s 50% of your account. I don’t know why you’re doing this. And then the next day they post a picture. They’re like, up blew up my account. I’m like, I told you, like it serves you right. Like, you know.
Casey Stubbs: 20:53
Well that’s good information and it’s good to know that we can get some really good free education on your website Option Alpha. And you do have a service as well, correct? Like if, if I wanted to get some more advanced training from you.
Kirk Du Plessis: 21:10
So there’s no advance training. Right? So that’s a misconception, I think people have naturally when they see like membership sites and stuff. But here’s the thing, right? So like after 10 years, like I naturally get 200 emails a day and people are like, look at my portfolio, check this trade, blah blah blah. I can’t do that for free, right? Like I value my time. So I give away stuff that I don’t need to be a part of. Meaning like training and videos and podcasts that we do. I like talking about all this stuff as you can tell. Like hopefully I’m energetic. You can see I like this stuff and so we gave it away for free. But then when it requires more of my time and I value my time so I charge for my time.
Kirk Du Plessis: 21:46
But most of the stuff that we have is just software and research. So like we spend an enormous amount of money on buying raw options data and then figuring out what strategies work. Like we’ve spent multiple six figures just straight up buying data from exchanges and then running software and say hey, what if we did this type of trade, you know, for 10 years, what if we did this type of trade for 10 years, but if we did that type of trade for 10 years and I’m like what does that end up doing, do a portfolio. So I would dare to say that we’ve got more options data than probably anybody on in this entire industry because we get hired by hedge funds who don’t want to buy the data and go through this to be consultants for them and say hey, we want to know what happens in this scenario and this scenario and our team can run that. So like we have more data than I think anybody would even like fathom as far as like options trading.
Casey Stubbs: 22:38
Okay so then you’re service gives the individual retail trader access to this data.
Kirk Du Plessis: 22:43
Yeah, I mean so like one of our tools is like a backtesting tool. And you use like you access our data, right? And you come back to us with strategies like. What I tell people is like, I’m not gonna give that away for free, right? Because because I, I paid money for it and like we charge basically like what the cost is for us to have somebody onboarded for lifetime. But if you can go in with our tools that we’ve compiled over 10 years and back to us the strategy and see, you know, okay, if I do this, does it actually work and outperform the market, why wouldn’t you do that for 45 seconds? right? And so like that’s really what we’ve tried to do is give people the tools to then say, OK, I know enough to be kind of dangerous in the industry, right. But now I want to try and strategy, how can I make sure that you know, I’m on the right path. Because like simple tweaks can be, I mean like wildly different, you know, and how you do it. And I would hate to see people. Like I built this for myself to be totally honest. And then we just started giving, you know, like selling it to other people. I wanted to know, okay, if I did this exact strategy will it win in 10 years that like my time for strategies and if I made this week, would that you know be better or worse than 10 years? And I don’t wanna wait 10 years to find out. So I’d rather know now than to wait. That makes sense?
Casey Stubbs: 23:54
Yeah, yeah, yeah, it does. And you, how did you go about building these tools?
Kirk Du Plessis: 24:01
Lots of time. Yeah, I mean like we buy data in raw from exchanges. We have to scrub data, we have to clean it for like liquidity and pricing and bid-ask spreads. Then we put in into Amazon servers and our developers just go bananas like building algorithms to run strategies. I mean it’s, it’s like wicked expensive to do it, but , it’s like crowd-sourced intelligence for me now, right? So we can spend the money to do it and give it to people for like a couple of hundred bucks. It’s crowd-sourced intelligence. Everyone has better intelligence now and we can be the central hub of that intelligence.
Casey Stubbs: 24:34 That’s really cool. And so before the, before the show began, you were telling me that you’re actually launching something new. It sounded pretty exciting. Can you tell us a little bit about that?
Kirk Du Plessis: 24:44
So like the next logical progression in any industry and definitely in the options trading and investing industry is gonna be like robotic trading, right? And this is something that’s interesting because you hear a lot of these robo advisors like Betterman and Wealthfront, right? All are like glorified like money managers and it’s really terrible how they do it, but you don’t hear anything about options trading. Because options trading is a different beast. It’s not just buy or sell stock, right? It’s which contracts in Detroit prices and how do you manage the position and how big and , so we actually built out entire like proprietary technology that does like start to finish options trading automation. So you can go in and say like the covered call strategy that we were talking about, that can be 100% automated.
Kirk Du Plessis: 25:29
Like you never have to do it ever, ever again in your life. Right now you have to go in and you have to manually click and choose the strike prices and sell the covered call every month. Now with our software that’s gonna be rolling out, you just say, hey, I want to do a covered call and this is the stock I want and here’s the, you know, basic setup that I wanna do every month. And you click start and it manages the whole thing for you and enters the trades. It closes amount and rolls the contracts, buys or sells stock, and does the whole thing start to finish. So I think it’s revolutionary software in the industry for sure.
Casey Stubbs: 25:29
Okay now, so after hearing that, I just got to ask you the question. So does that mean that you’ve stopped trading? You don’t trade anymore because the robo does it for you.
Kirk Du Plessis: 26:09
So once it rolls out, I’ll start doing more of the, , more of the trades, like start publishing videos on all of the trades that the robot basically does. And so my goal is to stop trading, right, is to not have me be the sole component of what I do because I make errors as every human does, right? And I’m not fast enough, I can’t be in front of the screen all day as you can see in the background, like I’ve got kids and toys and crap going on so I can’t be in front of the screen all day. But that doesn’t mean that there’s not opportunities there. So when the robots, like when my bots start trading, then I’ll just publicly show like everyone what they’re doing and when there’s drop, we’ll see what happens.
Casey Stubbs: 26:47
So you’re currently in the development process. You actually have not, I mean the robot..
Kirk Du Plessis: 26:53
It’s done. It’s rolled out to our, , our, like small community of like elite members as like a Beta group. , so yeah, there’s a lot of guys in their trading. There’s one guy who’s got like a hundred and 50 bots going and like every ticker symbol imaginable. , so yeah, it’s totally done. We’ve partnered up with Thinkorswim to do it. , they gave us pretty much like unparalleled access, , compared to anybody else that’s done it before in the past and , so yeah, it will be rolling out in the next like 30 days publicly.
Casey Stubbs: 27:20
So they, you said that he has a hundred and 50 bucks, so is it you give people a list of strategies to choose from and you just click and say, turn this one on and you have how many to choose from?
Kirk Du Plessis: 27:33
It’s correct. Okay so here’s the thing, right? So it’s a fully codeable technology, which means that if you wanted to, you could go in and you could code your own strategy, which means you could build out your own bob that says in this market environment, I want to make this type of trade. Right? And it’s, it’s, it’s literally like unlimited potential. It’s whatever you can imagine. Right? And then from there we take our research and we’ve built out kind of templated strategies that we know work well from our testing research. And so when you get in there, you’ll be able just to say, okay, this is list of strategies. Here’s generally what it does. If you want to clone this strategy one click clone and confirm and you’ve got to go into your account. , so we give you both, right? So that guy has, I mean he’s quoted his own strategies for like every little scenario that could possibly happen, like I don’t know if Apple runs up 5% and then comes down 2% execute a tray, right? that’s insanely specific, but he’s got them for like every possible scenario that can happen and that’s where this industry is going. I mean like you can’t, there’s no, like I said in the beginning, there is no unicorn strategy, right? So my goal is to build out like a list of bots that do what I needed to do in very specific market environments, right? If we have a 20% sell off, then all of these bots will turn off and my, you know, protect the portfolio, bot will turn on and do what it needs to do. So, , yeah, that’s the synopsis. I guess.
Casey Stubbs: 28:56
It’s kind of a mind blowing when you think about it because I don’t really want to go into it because I, it’s just crazy. But like if the entire world is running robot software, then no one has done it, then no one would have. Everyone would be rich because everyone would just run a robot trading strategy.
Kirk Du Plessis: 29:14
You know, but it’s still, like different. But so like I get that a lot but it’s still like different mechanics, right? Like, so you could have like an automated bot that like buys insurance for your house every year. Right? And that’s selling insurance. So it’s still the mechanics of like, what’s the goal of the actual investor? You know, the crazy thing is like 95% of all investment takes is done already by automated box. Like we are the 5% as humans that think we can still trade manually and that’s always going to be like people are always going to want to manually do it. 95% of the market’s already trading on algorithms anyway. Like you know, most of the float that happens in the market is algorithm trading. So we’re just trying to bring that to more of like a main street, you know, investor.
Casey Stubbs: 29:55
And I think that’s a great opportunity for the mainstream investors. If I was gonna get started and I think I wanted to start pretty, pretty conservative, you know, just the one hour a month or maybe even one robot or whatever. How much of an investment does it take to actually start something like that?
Kirk Du Plessis: 30:15
I mean, if you do like a covered call, you have to have enough to buy 100 shares of the stock, right? So that’s why stock is inefficient to me. If you do a simple credit spread, like one credit spread strategy, which is a risk defined profit define, you can set them up as high probability. The maximum risk in that trade could be as little as $70. I mean like, it’s not, we’re not talking about a huge amount of money to get started. Now, don’t like misunderstand me, you’re not gonna quit your job, you know, like people that are gonna quit their job on $70 of risk and $30 of potential reward. But you could start that small. So for me that’s saying, okay, if you got an account with like 3 to $5,000, you could do this and still stay in like a small position type size where you can slowly start to kind of learn the basics. I mean like unfortunately you can’t start this with no money, right? Like you have to do it. So three to $5,000 will start it.
Casey Stubbs: 31:08
All right, well that’s really cool. Now can you just tell us again where they can find out the free training is where they get information about your data and your robots just so people can get in contact with you.
Kirk Du Plessis: 31:24
Yeah, it’s all at optionalpha.com. Everything’s free and available once you go there. Like I said, I mean like there’s no catch for any of our free membership. People have stayed for 10 years and just watched all the training and never done anything and I’m cool with that. So it’s all at optionalpha.com.
Casey Stubbs: 31:36
All right, well thanks for being on the show. Thanks for providing all of that research for, for people that want to learn to trade options.
Kirk Du Plessis: 31:43
Yeah, no worries. I appreciate it. Thanks for having me.
Casey Stubbs: 31:48
Thank you for listening to the Cashflow Hacking Podcast. If you want to get the show notes, just visit our podcast page at financeandmarkets.com.
