Nirvana’s

OptionTrader
Amazingly Accurate New Mechanical
Options Strategies!
Plus: The NEW Visual Volatility Tool

NEW Harnessing the Power of Options Course pgs 8-10

Ed Downs Will Teach You How To:
Maximize Profits:
Directional Option Trading
Generate Income:
Income Producing Strategies
4 Weeks of Options Trading with Ed Himself!
Live in the Market Option Trading Starts May 12th.
Learn how to:
• Sell Covered Calls • The Option Ladder
• Buy-Writes • And More!
 Discover the Power of Options
- with OptionTrader
Since I founded Nirvana in 1987, my team and I
have primarily been focused on building systems and
tools for trading stocks and futures. But in seminars
and email correspondence over the years, users were
continually asking me, “When are you going to create
Ed Downs an options program?”
CEO and Founder,
Nirvana Systems, Inc. When I asked them, “How do you identify an option
trade now?” the vast majority said, “From a Trading
Signal on the underlying stock!” That’s when I
realized we already had the perfect options platforms
in OmniTrader and VisualTrader. We just needed an
easy way for people to trade options on their Signals.
OptionTrader is based on the novel concept of using
chart levels to determine the best options to trade.
Given a Profit and Loss Target, the software will
automatically evaluate every option trading method
using current option pricing to show you which
option trades will make the most money with the
least risk. Then, you simply place the trade right in
the chart. What could be easier?
As far as I know, OptionTrader is also the only
program that lets you automatically test any Trading
Strategy on popular options methods across a
portfolio of symbols. It’s how we developed the
mechanical Strategies that are in OptionTrader 3.
Introducing OptionTrader 3
Today we are releasing OptionTrader 3. This
new version has several important improvements,
including four new mechanical Strategies that show
much better performance than equivalent non-option
Strategies. Read about them on pages 6-7.
We also added the Visual Volatility Tool, a 3D image
of volatility across all option contracts on a symbol.
With it, you will see which contracts are expensive or
under-priced relative to the market. One glance
before placing a trade could keep you from paying too
much, or help you identify situations where selling
Premium has a high probability of generating income.
I have been doing extensive testing in the
VisualTrader Simulator on two different approaches
to trading options – Directional Strategies and
Income Producing Strategies. Harnessing the Power
of Options with OptionTrader 3 is a new course in
which I cover each of these topics in detail. It’s not
just about option trading. I cover the entire process –
from scanning for candidates and generating Signals
to using OptionTrader 3 to trade the opportunities.
LIVE in-the-Market Trading Webinars
In May 2015, for those who purchase our Ultimate
Options Trading Package, I am hosting live, in-the-
market options trading webinars twice each week
(also recorded) in which we will trade the live market
using the concepts taught in the course.
In the webinars, we will place trades and monitor our
trading progress week by week, discussing what went
well in addition to what we could have done better.
I’m looking forward to demonstrating the profit
power of options as we engage the market together!
From all my research and trading, it is clear to me
that trading options is the best way to engage the
market. If you want your option trading to be as easy
and profitable as possible, you need OptionTrader 3.
Sincerely,
Ed Downs
CEO and Founder,
Nirvana Systems, Inc.
The Power of Options!
Why trade Options? Bigger Profits. Same Risk.
An example of how trading options can be more profitable than trading
Options provide the best
equities—with similar risk exposure.
of all worlds. With options
you can:

• Increase Profits
• Generate Income
• Limit your Overall Risk

Options can dramatically increase

trading profits. In the example to the
right, we compare the same trades on the
stock versus selling options. Profits were
nearly three times higher trading options,
while losses were about the same.

We can also use options to generate

income in our accounts, by selling time
premium to the market using Covered
Calls, Butterflies and other methods.
All you have to do is decide which
approach to take for a given chart…

Harnessing the Power of

Options with OptionTrader 3 The Reversal Strategy generated Trade Stock Sell Puts & Calls
these Signals on Amazon. The table Date Signal Margin %PL Margin %PL
We designed OptionTrader to simplify compares trading the Stock vs. 5/12 Long 147.15 0.95% $72.33 5.34%
the option trading process. Given a selling Puts and Calls. Profits were 6/13 Short 163.53 1.14% $81.41 5.52%
goal, the software will tell you which nearly three times higher trading 9/25 Long 164.00 -2.33% $74.19 -3.69%
option method to apply. options, while losses were about 10/15 Long 152.18 2.93% $78.35 7.5%
the same. This is just one of the 10/29 Long 149.56 -0.81% $65.57 0.05%
“eye-opening” facts you’ll discover 12/2 Short 163.75 4.73% $77.52 11.22%
How do you know when to generate
in OptionTrader 3. 1/22 Long 150.00 15.44% $65.37 19.64%
income vs. placing a directional trade?
How do you establish your chart
levels? These questions and more are
answered in Ed’s Course.
The OptionTrader Advantage
OptionTrader 3 is the best options Option Trading Made Easy ................................................................ 4
trading platform in the world. Win in the Options Market with OptionTrader 3
Combined with the new Options
Course, you will be able to engage the New Options Strategies Maximize Returns......................................... 6
options market with confidence. We New Strategies and Tools to Supercharge Your Trading
guarantee it! Harnessing the Power of Options...................................................... 8
A New Course by Ed Downs
Ultimate Option Trading Package Bonus .......................................... 10
4 Weeks of Options Trading with Ed Downs!

3
 At last...

1 Establish a Target Point Range Dbl Range

Trading options is easy with OptionTrader 3.

Just place a Target where you think the chart Target
could go and set the Loss Level where you
would get out of the trade. In this case, we
feel Cisco Systems (CSCO) will likely rally
to its prior highs. So, we placed our Profit
Target near 30 and the Loss Level halfway
to recent support.

To get the best answer, we provide three

different types of targets – Point, Range and
Double Target. In our Harnessing the Power of
Options with OptionTrader 3 Course, we show
you how to establish a Profit Target and Loss Loss Level
level for a variety of different chart situations.

2 Select the Best Option

OptionFinder analyzes all the popular Option
Methods using the Target and Loss levels
established in Step 1.

The upper grid sorts the Option Methods based

on profitability. The lower grid shows potential
trades within a selected Method, also sorted
Diagonal Spread has the
on profitability. highest Percentage Gain

In this example for CSCO, OptionFinder

is telling us that Diagonal Spreads have the
highest Percentage Gain values over all other
Option Methods we might use, based on the
given Target and Loss levels we established in
the chart. Top Diagonal Spread trades

Now, we can click specific Diagonal Spreads in

the lower grid to see the Expiration Graphs and
predicted Profit or Loss curves for any point in
the future.

4
Option Trading Made Easy!
3 Manage the Trade
Once you place the trade, you can use the Chart
to establish Stop Loss, Profit Target, or Trailing
Stop levels for the option position.
Stops can be based on Position Value or the
value of the Underlying Symbol. And, if you use
our integrated brokerage connections, execution
of all orders is totally automatic.
P&L Curves Expiration Graphs
Short Aug 32 Call, Long Oct 30 Call
Short Aug 32 Call, Long Oct 29 Call
continued from previous page...
We note from the % Gain column
that the top two trades have nearly
the same Profit Potential of about
30%. However, by viewing the
Expiration Curves we quickly see that
the first trade’s profit levels decline
significantly at higher prices, while the
second trade maintains its profit. This
makes the Short Aug 32 Call, Long
Oct 29 Call a better candidate.
In our Harnessing the Power of Options
Course, we go over many examples of
using OptionFinder to select the best
trades in the live market.
With OptionFinder it takes just
seconds to find the best trade, within
the best Option Method for any chart,
while it educates you on the merits
of each Method. No other option
software makes it this easy to select
the best Option Method to trade.
Profit holds up at
higher prices
5
 New Options Strategies Maximize Ret

New Options Strategies are the

perfect starting point for Directional
Options Trading.
Extended Moves (Debit
In OptionTrader 3, we are now including FOUR Spread) Trade on AIG
mechanical options trading strategies. The strategies
identify points where directional options trading
yields a significant advantage.

Swing Trade with Options

The first two Strategies incorporate options writing
approaches to capitalize on the quick moves
associated with Swing Trading. UP 146% in Three Weeks!
• Swing Trading (Credit Spread)
• Swing Trading (Naked Puts)
The Extended Moves (Debit Spread) Strategy captures a big
The two Swing Strategies are designed to have a gain on AIG. The stock itself moved up 6.6%, but the debit
two-fold path to profitability: spread picked up 146% in just three weeks.

1.) They sell options when options prices are high.

Trade the Extended Move
2.) They trade to capture the expected swing move
in the chart. The second two options strategies find slightly longer
term trading opportunities, and buy options to increase
When you put these two advantages together, you leverage while limiting risk.
end up with an extremely powerful directional
options writing strategy that produces major results • Extended Moves (Long Option)
• Extended Moves (Debit Spread)

The Long Option Strategy chooses the optimal strike for

the extended move expected in the chart. The trade is then
managed with a trailing stop to capture the whole move.
51% Return over This combination allows the strategy to maximize gains
the past Two Years and control risk.

The Debit Spread Strategy employs a similar approach,

but sells an additional call option to lower the overall cost
of entry, and increase the probability of success.

The Strategies purchase options when they are relatively

cheap, and the stock is likely to make an extended move.
This allows these strategies to produce huge percentage
gains, like you see in the chart of AIG (above).

Equity Curve showing the performance of the Swing Trading

(Naked Puts) Strategy trading options on the symbols in the
S&P100 over the past two years. The Strategy returns 51%
over this time period with a maximum drawdown of only 7.3%.

6
turns for Swing and Extended Trades!

Four NEW Option TradePlans

The new Strategies in OptionTrader 3 use specific
directional Trade Plans that are optimized for
Directional Trading with Options. But they aren’t The Swing Credit Spread Trade
just for these strategies. The Trade Plans can also be Plan boosts the profitablity
used to help manage any Directional Options Trade. of RTM7 Signals.
This helps you realize the maximum profit potential
on all your directional options positions:
+11%
• Swing Naked Write +12%
• Swing Credit Spread
• Extended Moves Debit Spread
• Extended Moves Long Option

The Trade Plans use OptionFinder’s search

algorithm to determine the best options for a given
setup, then manage that trade with exits that are
designed to capture gains for the given setup. +7%

When used with your favorite signals, our new

Options TradePlans take the guesswork out of
Directional Trading with Options.
In this example, the Swing Credit Spread Trade Plan nets just over 30% on
Signals from RTM7.

The NEW Visual Volatility Tool

Designed to Keep You on the Right Side of the Trade!
Our new Visual Volatility Tool lets you see which options
These Options are too
expensive. Look to sell them. in the chain are relatively cheap and which ones are too
expensive. You can use this information to ensure you
are always buying the ones that are cheap and selling
options that are overpriced.
The Visualizer also has an animated playback feature
that allows you to see how the volatility surface changes
These Options are relatively cheap.
from day to day, and helps you avoid the costly surprises
Look to purchase them.
that can come from an abrupt change in volatility.
Ti
m
e

This feature brings the rocket science of options analysis

to
Ex

into a simple, easy to understand plot, and takes the

pi
ra

ce
Strike Pri
tio

guesswork out of monitoring options volatility.

n

7
 Harnessing the Power of
– A NEW Trading Course by Ed Downs

Maximize Your Profits with

Directional Options Trading
Most people are familiar with buying a Call Option on a stock when they think it is going
up. But there are other option strategies that can be less risky and generate higher, more
consistent returns over the course of many trades.

In Part One, we thoroughly cover Directional Option Trading. I’ll show you which Setups
lend themselves to the most profitable trades. Then, I’ll show you how to set Profit and
Loss targets so OptionTrader can find the best Strategies.

Options are the least understood Some of the topics we cover:

financial vehicles available to
traders and investors. “Expiration • How to set optimal targets from a few simple chart measurements.
Curves” and “the Greeks” are • When Buying Calls is the best strategy – and when it’s not.
not intuitive to most people.
OptionTrader changes • How Credit Spreads can provide a unique advantage.
all that. • A simple bullish strategy that can provide more overnight leverage
- with the same risk - as buying the underlying stock.
I am now convinced, more than • In the money vs. out of the money.
ever before – if you want to make
• And much more…
consistent profits, options
are the way to go.

Once you SEE the Power of

Options first-hand, and truly
UNDERSTAND how to apply
them using this incredible tool, your
trading will be forever transformed.

Reducing Risk is
Important. But so is
Making Money!
We know that trading options can
be less risky than trading stocks or
futures, because with most Option
Strategies, your risk is known going 60% Gain if the
into a trade. But we also want to stock doesn’t
know HOW TO MAKE THE move up at all.
MOST MONEY.

Here is a Credit Spread on XOM. This could be a great trade. But even if the stock goes nowhere for
6 weeks – I will make 60% on the margin that is required to place it. And my downside risk is limited.
This is just one of the many money-making approaches we will cover.

8
Options with OptionTrader
“Making Options Trading SIMPLE AND PROFITABLE.”

Generate Consistent
Depending on the situation,
Income Using Options you can often generate higher
returns with little or no increase
in overall risk by using an Option
Perhaps the most popular use of options is to produce income. I have been to financial
seminars that ONLY teach “Selling Covered Calls”. It’s a great way to generate income when Strategy. In this course I will
you own optionable equities. show you a variety of ways to
accomplish this with simple, easy
But Selling Covered Calls is just the tip of the Income-Producing iceberg! Once you start to understand methods.
applying OptionTrader, more Strategies will emerge as optimal, including Condors, Buy-
Writes, and Strangles. We devote Part One to covering
“speculative” approaches to
The beautiful thing about OptionTrader is it can show you which Income Producing Strategy directional options trading. Then, in
makes sense for a given chart. All you have to do is provide a few simple levels on the chart, the second part, we help you round
which is what we cover in this course. out your repertoire with powerful
“income-producing” strategies.
In Part two we will cover these important income-producing approaches:

• Selling Covered Calls: What is the Optimal Time to Sell? With these two approaches, this
course will form a solid foundation
• The Option Ladder: Trade these stocks and pocket gains week after week after week. that lets you immediately begin
• Buy-Writes: How to reduce your risk on every investment. trading the options market with
OptionTrader.

My Number One Goal is to make

options trading simple AND
profitable for everyone who owns
OptionTrader 3. This course
will get you excited about trading
options. I guarantee it!

Then, you and I are going to

engage the market together, in
my first LIVE Options Coaching
Sessions, as described on the
next page.

Solid income
with low risk

In this chart for CNP, we identified a Strangle that will generate solid profits if the stock ends up in a
wide trading range, but very small losses if it moves outside this range.

9
 4 Weeks of Options Trading with Ed Himself!

It’s Just You, Me, and the Market.

My objective in Harnessing the Power of Options will be to show you
how to quickly and easily spot the best option trading opportunities.
It’s actually very easy to do that with OptionTrader 3!
But we all know that Powerpoint Slides and even historical
simulations are not the same as “the Hard Right Edge.” So, I’ve
decided to host a solid month of actual options trading.
Twice a week, for four
weeks beginning May 12…
I will hold live sessions in which I discuss the
actual candidates I am trading and walk through
each trading decision using the software.
After the first session, we will begin each time with a
review of our trading progress and talk about what went
right as well as what we could have done better. These
will be LIVE trades in my actual trading account.
This is the first time since our Omni Trader University
courses that I have ever held a continuous trading venue
with users. I’m limiting attendance because I want to be
able to interact with each student personally.
Let’s make hay in the month of May! I look forward to
seeing you in my sessions, starting May 12.
Sincerely,

Getting Started
with Options Seminar Agenda
I. An Options Primer
· Options as an Investment
Using OptionTrader 3 · Why Some Traders Lose Money
Trading Options, and How to Avoid it!
This CD seminar, included FREE with the · Options Method Overview
software, covers the entire spectrum of product usage
and option trading for those who are new to the art. II. Using OptionTrader
· Setting Up the Software
Part I provides a quick overview of options. Because we use the options simulator, the
· Activating in a Chart
concepts are quick and easy to grasp.
· Setting Targets
· Trading Option Positions
Part II goes over every aspect of using the software, from setting up your data account to
trading with the Visual Brokerage feature of OmniTrader and VisualTrader. We also cover
III. Options Trade Plans
OptionFinder and other advanced features.
· How Options Plans Work
In Part III we go under the hood to discover how to add Option Trade Plans to our · Adding Options Plans to a Strategy
Strategies and how the Option Engine works. This feature allows OptionTrader to find · Testing the Strategy
the best Options Strategy. We also cover option strategy testing in the Portfolio Simulator. · Portfolio Simulations

10
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