Teaching the Art of Trading since 1996!
I don’t believe in wasting your time, so I’ll get straight to the point…
With any trade service, what you really need to know is whether the service fits into your busy schedule and whether it will help you make money.
Unfortunately, it’s virtually unheard of in this industry for trade services to explain exactly how they are trading and exactly how they are calculating the results they claim.
I for one, believe in complete transparency, so the goal of this web page is to inform you on the following:
- How we calculate risk per trade
- How we calculate return per trade
- How we calculate returns for the year
- What we consider conservative and aggressive methods to grow capital
- How the T-SPY Pro and TBUZ trade services can help you make money
Let’s dig in!
How we calculate risk per trade
First determine the type of trade you are making. Are you trading stock or stock options. If you’re trading options, are you buying an option or selling an option? Are you trading an option spread? If so, what is the risk on the trade? Determining the type of trade you are making is fairly straight forward. If you don’t know what type of trade you’re making, please educate yourself before placing any trade. The easiest way for me to show you how to calculate risk per trade is to just go through the different trade types we use, one by one.
Buying shares of stock:
This one is straight forward. If you buy shares of stock, your risk is equal to the amount you pay for them. So if you buy 100 shares of ABC stock at $50 per share, your total risk is (100 x $50) $5,000 before commission and fees.
Buying call and put options:
When you buy options, you are buying the right and not the obligation to purchase shares at a specified price. Because you are buying the right, but not an obligation, your risk for the trade is simply the price you pay for the option. So if you buy a call options priced at $1.20 per contract of ABC stock at a strike price of $50, the risk for the total trade position is ($1.20 x 100) $120.
Selling naked options:
When you sell a naked option, you have an obligation to either buy shares or sell shares to someone else at a specified price. This opens up the possibility of more capital at risk than you are either comfortable with, or can afford. And if you sell naked calls, your risk is unlimited. In my opinion, only the most experienced of traders should sell naked options.
Buying debit option spreads with the same expiration date:
Calculating risk when buying option spreads is just like buying calls or puts in that risk is limited to the amount you pay for the option position. This is all assuming you are buying and selling options on the same stock, and with the same expiration date. For example, if you buy an option for $2.50 on ABC stock with a strike price of $50 and expiration on December 31st. Then you sell an option for $1.00 on ABC stock with a strike price of $55 and expiration also on December 31st. Your risk per contract is ($2.50 – $1.00) $1.50, and your total amount of capital at risk per contract is ($1.50 x 100) $150.
Selling credit option spreads with the same expiration date:
Credit spreads are a bit trickier, but once you understand how to calculate risk, they are quite simple. Once again we will assume you’re selling and buying options on the same stock with the same expiration date. If you sell a $157.50 strike put on XYZ stock expiring December 31st for $5.10. Then you buy a $152.50 strike put on XYZ stock also expiring December 31st for $3.70, what is you risk per contract?
First find the net difference between the premium you collected from selling the higher strike option ($5.10). Then subtract the premium you paid for buying the lower strike option ($3.70). That difference is ($5.10 – $3.70) $1.40, or $140 per contract. We’re selling an option spread, so that $140 per contract is the total amount of money we can make on this trade.
But that still doesn’t tell us the amount of risk. To calculate risk, find the difference between the two strike prices ($157.5 – $152.5 = $5.00) and subtract the amount of premium you collected from selling the credit option spread ($1.40). What you get is ($5.00 – $1.40) $3.60, or $360 of risk per contract.
How we calculate return per trade
Once you’ve determined the amount of risk that’s involved in each trade, it is very simple to determine the percentage return on the trade when closed. To keep things simple, I will again show you an example per trade type. But first, here’s the formula we will use to calculate percentage return on investment (ROI):
ROI = (Current Value of Investment – Cost of Investment) / Cost of Investment
Calculating return on shares of stock:
In the above example, we bought 100 shares of ABC stock for $50 a share (cost of investment). If we were to sell ABC stock at $62 a share (current value of investment) sometime in the future, our total percentage return be: ($62 – $50) / $50 = 0.24 or 24% ROI.
Buying call and put options:
This works the same as buying shares. If we bought a call option for $1.20 and sold for it later on for $1.90, our percentage return would be: ($1.90 – $1.20) / $1.20 = 0.58 or 58% ROI.
Selling naked options:
We very rarely, if ever, recommend selling naked options in our trade services.
Buying debit option spreads with the same expiration date:
When buying debit options spreads, it is important to note that your total dollar return is limited to the difference between strike prices minus the premium you paid for the position. So in the previous example in the section on risk, if you bought a $50/$55 debit call spread for $1.50, the most you could make per contract is ($55 – $50 – $1.50) $3.50 or $350. Calculating return is the same as buying options. If you eventually sold this debit call spread for $2.75, your total percentage return would be: ($2.75 – $1.50) / $1.50 = 0.83 or 83% ROI.
Selling credit option spreads with the same expiration date:
When calculating return on credit option spread, we will use a different formula. Here it is:
ROI = Pofit per contract / Risk per contract
We determined in the above example from the section on risk that selling a $157.50/$152.50 strike credit spread for $1.40 would mean our total risk per contract (cost of investment) on the trade is ($157.5 – $152.50 – $1.40) $3.60 or $360. To give you an example of return on this trade, let’s consider two different examples.
Example #1: The price of the shares finishes on expiration date well above our $157.50 strike put we sold. This means we get to keep all of the premium we collected ($1.40 per contract) from selling the credit option spread. Our profit per contract is $1.40. That means our total return in this example would then be: $1.40 / $3.60 = 0.39 or 39% ROI.
Example #2: If we decided to buy back the credit option spread before expiration, we have an extra step in calculating return. Let’s assume we buy back the position for $0.50. To calculate return we need to account for the $0.50 of profit we do not collect. So calculating return would be: ($1.40 – $0.50) / $3.60 = 0.25 or 25% ROI.
How we calculate returns for the year
I’m not a fan of displaying returns on the year because it takes the focus away from what really matters in my mind: the ability of the trade service to teach you how to trade in any market condition. Often times it seems to me that showing yearly results does not hit home for most traders, because simply showing yearly results does not tell you exactly how the service will benefit your bottom line.
So listen up, because this is the most important section on this page. I’m about to show how you can replicate my success in the markets by joining one of our premiere trade services and simply taking the trades.
To display yearly results in a format that makes the most sense for the majority of you, I like to track returns based on an even dollar amount invested in each trade. I do not consider using leverage as profits build, as nearly all other companies in the industry do to amplify the returns they claim you will have. I believe it is unrealistic to think every trader out there will be comfortable risking higher and higher dollar amounts as the years go on. Taking into account leverage also will eventually bring in a big problem: eventually there wouldn’t be a market big enough to accommodate your trading!
Deciding on an even dollar amount to risk per trade is really a two-fold process: you need a total capital allotment dedicated to trade the service, and you need to decide what percentage of that capital you’re willing to risk per trade. If you have $5,000 of capital you are dedicating to trade a service, and you are willing to risk 5% of that capital per trade, then the total dollar amount invested per trade would be ($5,000 x 0.05) $250.
Whatever the percentage of your capital allotment you are comfortable with, it is important to risk as close to that amount as you possibly can. How can you do this? Well, it will never be exact. If I recommend an option position that has $120 risk per contract, you could place a 2-lot for a total of ($120 x 2) $240 of risk. Then if I recommended an option position that has $90 of risk per contract, you could place a 3-lot for a total of ($90 x 3) $270 risk. As you can see, sometimes you will risk more than your ideal risk per trade and sometimes you will risk less. But the important part is that on average your risk per trade will average out to around the same number.
What this means for the yearly returns we display is they are somewhat normalized. This is because we assume an even dollar amount invested in each trade. The only reason we present returns this way is because it allows you to get an idea for the potential returns from a percentage basis, regardless of how much capital you have to start with.
As you can imagine, a 25% return on a $2,000,000 account looks drastically different from a 25% return on a $5,000 account when you look at the actual dollars!
What we consider Conservative and Aggressive methods to grow capital
Every trader is different, and your level of risk tolerance is no different. Some traders may be willing to only risk 2% per trade while others with a more gunslinger mentality are comfortable risking 20%.
We believe in two methods to grow capital: Conservative and Aggressive.
Our Conservative Growth Strategy recommends you to risk 5% of your initial total capital allotment dedicated for the service per trade. That means if you have a $5,000 initial capital allotment, you would ideally risk $250 per trade.
Our Aggressive Growth Strategy recommends you to risk 10% of your initial total capital allotment dedicated for the service per trade. That means if you have a $5,000 initial capital allotment, you would ideally risk $500 per trade.
IMPORTANT: Notice how we do not recommend leveraging up during a 12-month period. This means that if have $5,000 of initial total capital and you decide the conservative strategy is the right approach for you, your ideal risk per trade will stay at $250 for the entire year. Then at the start of the next year, you can either choose to continue risking $250 or bump up your ideal risk per trade to 5% of whatever the total capital allotment dedicated to the service is at that time.
Why That’s Important: Remember when I said our returns are somewhat normalized because we assume an even dollar amount invested per trade? Well, now you know why! If we chose to analyze returns based on risking a constant percentage of total capital per trade (but on a rolling dollar amount), your returns would likely fluctuate a lot more than your comfortable seeing!
Now that you know how to calculate risk and return, and how to get the most out of a trade service, let’s look at how DTI’s premiere trade services T-SPY Pro and TBUZ Text and Trade can help you take any amount of capital and grow cash!
What is T-SPY Pro?
T-SPY Pro is a trade service dedicated to making your trading simpler. We only trade one asset, the S&P 500 SPY ETF, and we utilize options to minimize risk and maximize returns. The beautiful thing about trading the SPY and SPY options is you can make money trading the same vehicle whether the market is going up, going down or stays relatively unchanged.
I’ve been trading the markets for a long time, over 40 years, and I’ve made it my sole focus to learn the ins and out of the S&P 500. In fact, I was one of the original S&P futures traders back when it was first created. I simply love trading the S&P 500, whether it be futures, shares or options!
With the T-SPY Pro service you get:
T-SPY Pro Results are Phenomenal
Highly Efficient Accuracy Rate
We’ve issued 75 total trades this year in the T-SPY program, banking 58 winners and only 17 losers. That means we are trading at over 77% accuracy so far. And the best part is, our average win has a net increase on our money by 16% while our average loss only hurts us by 7%. That’s a winning combination!
Market Crushing Returns
Whether you take our conservative approach, or you go with our more aggressive approach to trading your capital, the results are absolutely cursing the S&P. The average return per month is 9.1% using an aggressive approach, meaning your initial capital allotment dedicated to T-SPY Pro would be up a whopping 68% so far in 2019 from actual live trading results.
Are you willing to risk $250 per trade? If so, a small $5,000 account would be up 34% using a conservative approach and 68% using our aggressive approach to grow your account in 2019!
A typical week in T-SPY Pro
Monday – Thursday
- Weekly Pivot is sent pre-market via text/email so you can manage your entire portfolio
- Daily Pivot sent via text/email before the cash open
- Trade session inside the T-SPY Pro traderoom, where you can communicate with other traders and receive market relevant news and insights from Tom Busby via a chat window
- Trading insights such as the Issues, Put/Call ratio, the DAX, and everything else important to finding the expected market direction for the day’s trading
Friday
- Bonus trade session will be held during peak market volatility
Live Educational Sessions
- Tom Busby will occasionally hold live educational sessions when important market opportunities arise
You’ll receive all the pertinent trade information you need to replicate my success, and it all goes straight to your text or email inbox!
What People Are Saying About T-SPY Pro
“My account is up 28% in seven weeks…”
“Tom,
The TSPY-Pro program is phenomenal. The entire process is so easy to follow. You have definitely put me on the “flip-side” in trading – from losing money to making money. I have been in the program for about seven weeks and my account is up 28%.
Thanks”
Jerry K
– T-SPY Pro member
“Value and exceeding expectations is standard operating procedure at DTI…“
“T-SPY Pro has extra value!
Though T-SPY Pro is primarily a morning text and trade program, how great it was to get an extra trade late in the day! In at 3.24, out at 3.44 — netted me a 6+% gain in less than a half hour!
Value and exceeding expectations is standard operating procedure at DTI.
Thank you Tom and DTI staff! I am a very happy trader :)”
Kate L
– T-SPY Pro member
“Due to Tom’s success with the SPY, I paid for the service after 3 days…”
Ron M
– T-SPY Pro member
What is TBUZ Text and Trade?
TBUZ Text and Trade is a complete trade service designed for those who love this great game of trading! This dynamic service all starts on Sunday night, when I host a weekly planning session. Members also enjoy a trade session every Tuesday, periodic Flash Meetings throughout the week when important market news hits, and of course also trade alerts sent via text and email!
During the Sunday Night Planning Session, we go over a comprehensive outlook for the week ahead. Included are historical seasonality numbers for the week, a look at market sentiment indicators like the put/call ratio, breaking economic news events scheduled for the week, plus important earnings announcements on tap from the top companies on the street!
When I say TBUZ is comprehensive, I really mean it. There isn’t another trade service on the planet that gives you the “hands-on” access to everything I do on a daily basis. You get my weekly and daily pivots, the same trades I’m making in my own personal trading accounts, a live trade room dedicated for members only access where we can hold educational sessions, plus Flash Meetings held numerous times throughout the week. I even give you my cell phone number so you can call me and discuss your progress.
What it looks like!
The best part about these services is you don’t need to sit in front of your computer screen all day.
If you have access to email and/or text alerts on your phone…
Plus you have access to mobile trading from your favorite trade platform…
You can trade with TBUZ from anywhere in the world!
Taking calculated risk that pays you is the essence of TBUZ
So far in TBUZ Text and Trade during 2019 we’ve made a total of 170 trades, with 122 of those winners. That’s a 72% accuracy rate. In terms of profit on the year, using a conservative approach would have your capital up 29%, or around 57% using our aggressive approach.
What People Are Saying About TBUZ Text and Trade
“TBUZ just keeps getting better all the time…”
“Tom:
It has been a great week already and it is only Wednesday! You predicted a big week on Sunday and you have come through in spades. Been a TBUZ member since it’s inception and it just keeps getting better all the time.
Thanks for sharing your experience and knowledge with us.”
Steve P
– TBUZ member
“The strategies you use are all appropriate for the market we are looking at…”
“Thanks, Tom… just listened to recording … what I appreciate is that the strategies you use are all appropriate for the markets we are looking at … I learn to see the market differently each time you point something out!
THANKS!”
Elaine F
– TBUZ member
Introducing…The Yogi Plus
With the Yogi Plus, you get 7 months of T-SPY Pro and 1 month of TBUZ Text and Trade!
- 1T-SPY Pro Trade Service: all the pertinent trade information sent directly to your text or email inbox, allowing you to replicate the success of a 40+ year veteran trader taking the exact same trades in his personal account.
- 2T-SPY Pro Trade Room: a room dedicated for members only, so you can communicate with like minded traders all with the same goal: maximizing returns.
- 3Market direction insights: you’ll know exactly where veteran trader, Tom Busby expects the market to trend, allowing you to better manage your entire portfolio of his insights.
- 1TBUZ Text and Trade Service: the same trades that have produced 72% winners, while conservatively growing accounts anywhere from 29% to as much as 57% in 2019
- 2TBUZ Trade Room: a room dedicated for members only, where Tom Busby will hold Trade Sessions and Flash Meetings periodically throughout each week of trading.
- 3Options Trading for Income: most of the trades will be based on collecting premium from selling option spreads on leading companies like AAPL, AMZN and index ETF’s like DIA, QQQ and IWM.
T-SPY Pro: The Yogi Plus
Once you click the button below, you’ll receive a number of emails detailing all the information you need to get started Sunday night with the TBUZ weekly planning session, plus you’ll receive an email to help setup your cell phone and email to receive trade alerts starting Monday morning!
100% Satisfaction Guaranteed
Secure Payment
It’s Time to Start Winning with Proven Results
I’ve showed you how to calculate risk and return and why you don’t need leverage to experience great results.
I’ve also showed you how the premiere trade services at DTI can help you replicate my results, and even do better than I am trading my own accounts.
Now it’s time for you to join the program and start learning and earning like the rest of DTI’s market students.
Is this for you?
Let me ask you one question…Are you comfortable risking $250 per trade?
If the answer is yes, you could turn every $5,000 into over $8,200 by the time your Yogi membership is up.
Here’s “What You Get” with The Yogi Plus
- angle-right7 months of the T-SPY Pro Service
- angle-rightTrade Sessions inside the T-SPY Pro trade room every Monday-Thursday with weekly and daily pivots to manage your cash
- angle-rightTrade alerts sent to your text/email inbox
- angle-right1 month of TBUZ Text and Trade
- angle-right4 Sunday Night Planning Sessions, 4 Connect the Dots Trade Sessions and at least 8 Flash Meetings inside the TBUZ trade room
- angle-rightTrade alerts sent to your text/email inbox
100% Satisfaction Guaranteed
Secure Payment
100% Satisfaction Guarantee
You are fully protected by our 100% Satisfaction-Guarantee. If you don’t make money during any month of your 7 months of time inside the T-SPY service, we’ll add an extra month to the end of your subscription.
Frequently Asked Questions
What can I expect when I first sign up?
You’ll receive a number of emails detailing how you can get setup for trade alerts to your cell phone and email.
What do I need to have when I sign up?
You’ll need a trading account with the ability to trade options and option spreads. You’ll also need a valid email address and/or a cell phone that receives text messages.
How will I access the live session?
You’ll receive login credentials to the DTI Members area of our website where you will find your trade rooms that you can access at any time during your membership.
Do I need extensive trading experience?
No, you don’t need extensive trading experience. All of our programs are designed so any level of trading experience can replicate the trades and results. We help you understand every trade we place.
P.S. I only offer the Yogi during the month of August… and baseball enthusiasts will know why! I love baseball, and one of my favorite players growing up was Yogi Berra, who happened to where to number 8. So it only makes sense to offer The Yogi Plus during August, the eighth month of the year. It’s our most popular deal we offer year round, and after August I’ll take it down. So don’t procrastinate and start earning today!
Yes, I want to get start with The Yogi Plus now!
RISK DISCLAIMER There is a very high degree of risk involved in trading. Past performance is not necessarily indicative of future results. DTI Trader and all individuals affiliated with this site assume no responsibility for your trading and investment results. All the material contained herein is believed to be correct, however, DTI will not be held responsible for accidental oversights, typos, or incorrect information from sources that generate fundamental and technical information. Stock, options, futures and futures options trading carries significant risk. Trading securities, security options, futures and/or futures options is not for every investor, and only risk capital should be used. Any reference to futures originated from the days prior to DTI starting in 1996 and is for educational purposes only. You are responsible for understanding the risk involved with trading options. Prior to trading any securities products, please read the Characteristics and Risks of Standardized Options and the Risk Disclosure for Futures and Options.
The indicators, strategies, columns, and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information.
You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of DTI Trader may have a position or affect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. All of our partners or affiliated companies are in no way associated with the proprietary information provided by the DTI Trading Method or software.
Returns are based off our opinion of how they should be calculated. We recognize there are other ways to calculate returns. All returns are based off buy side analysis and do not include commission costs. All projections are based on current returns. The projections do not account for any possible draw down effects on performance and performance projections. Actual returns and projected returns may fluctuate over the course of the service.
“VIP” or “Lifetime” designation refers to the lifetime of the product only and not to be assumed to be the lifetime of any individual.
Any person who chooses to use this information as a basis for their trading assumes all the liability and risk for themselves and hereby and absolutely agrees to indemnify and hold harmless DTI, its principals, agents and employees. As a Student and Chat Subscriber, we ask that you please cross check the information posted here. We ask that you challenge any information you feel is incorrect. We do not guarantee any of the information that is posted in the chat.
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