You can't be that naive. Doubling your money every month is phenomenol. The minute you find someone who claims they can do that, run the other way.
Advisory Services?
- Thread starter tj1320
- Start date
You can't be that naive. Doubling your money every month is phenomenol. The minute you find someone who claims they can do that, run the other way.
Sorry, its just that I don't know what to believe. I know that alot of money can be made trading stock options, I'm just looking for a way to do it. Is there a way I can check up on what they claim their past performance is to see if they are legit? I'm not sure if they double their money every month or not because some trades during a one month period seem to take almost 3 months to close. But their pages about their past performance show that after all trades placed in a one month span have closed, they have about double what they started with. For example, one month they started with $11,000 and by the time all of the trades placed in that month had closed, they had about $28,000.
I'm pretty skeptical but I am just wondering if there is a way to check up on what they claim to see if it really happened.
EDIT: They claim that the reason their past performance is only through February of '05 is because some trades take 6 months or more to close. Once all trades for a given month have closed, they post the results I guess.
I'm pretty skeptical but I am just wondering if there is a way to check up on what they claim to see if it really happened.
EDIT: They claim that the reason their past performance is only through February of '05 is because some trades take 6 months or more to close. Once all trades for a given month have closed, they post the results I guess.
Here is a better explanation of what they do/advise, from my free trial of their service. I guess what I'm really wanting is advice from experienced options traders about the strategy this optioninvesting.com uses.
Stock Options
Stock Price Option Option Price Expiration/Strike Price Volatility Probability of Profit Trailing Stop
SCSS 39.06 QSLFH $270/contract June 40 Call 38 88% 40%
NEW 48.58 NEWHJ $270/contract August 50 Call 36 88% 40%
ZOLT 21.21 LVQFD $275/contract June 20 Call 48 87% 45%
--------------------------------------------------------------------------------
Don't pay more than the option entry price listed above.
Place a trailing stop based on our percentage above using trigger by points.
Buy at the ask, sell at the ask price.
Optionsxpress.com is the only broker who will allow this.
Below is a brief explanation showing you how to make the profits we make, while still limiting your loses.
We are including it with every newsletter from now on.
We don't send exit signals, i.e. specific prices, because they are useless. Everyone's risk tolerance is different. We would have to custom design a newsletter for every subscriber, all with different amounts of investing dollars and each with a high or low tolerance for risk. The sold prices on our website reflect our exit strategy in our newsletter. Here is an example:
IBM is $60 a share. A May $65 option contract may cost $2.20 bid and $2.40 ask. In our newsletter we say to buy at no more than $2.40. We also suggest a 40% trailing stop based on price. So, we buy IBM at $2.40. 40% would be $1.00. So the option would have to lose $1.00 before it is sold. Since it is a trailing stop, it follows the price as it moves up. Below is an example on a virtual scenario on how the trade would work, you will see why this is better than a suggested exit price.
We use trigger by points instead of bid or ask The profit margins are higher.
Example bid is 2.40 40% would be .95 cents. Enter the trade to trigger by .95 points. This way the most you lose is .95 of your original 2.40. If the option rises to 4.00 and backs off to 3.05, then it's sold for a 27% gain. It's sold by the trigger of losing .95 cents.
We use our percentage trailing stop as a guide to determine a trigger based on entry price. Example: IBM call ask price is 2.40. If we recommend a 40% trailing stop, your stop is .95. If IBM option goes to 4.00 then drops to 3.05 your option would be sold based on the .95 trigger. It's the same as a 40% trailing stop, but works better than bid/ask.
We buy at the ask or below. Figure our trailing stop based on percentage, then get our point value for the stop. We trigger sale by ask price. This way we buy at the ask and sort of sell at the ask. It makes up for the difference in the original spread between bid and ask.
The following was a queston sent in by a client. Our answer will help many of you.
I enjoyed my free subscription and I am planning on signing up before too long. However, I have a couple questions regarding how I am supposed to place trailing stop orders through optionsxpress.
I understand that after you have placed and executed the "Buy to Open" order, you place another order by choosing "Sell to Close", choose "Market", then choose "Trailing Stop" under "Advanced Orders". You then choose "down" under "Direction", enter the number of points, then click "Points" instead of "%". The "Trigger" option is where I'm confused because there are 4 different options to choose from; "default", "last", "bid", and "ask". Which one do you choose? Also, do you check the box next to "Set a Trigger on your Trailing Stop"?
One more thing: When you place an order, under "Routing" do you just leave it on "Best (NBBO)"? Thanks a lot and I'm sorry if these questions sound dumb. Its just that I want to make sure I'm crystal clear on this.
You want to trigger at the ask. This gives you the highest exit price. Do not put a check in the box. Leave the routing set to NBBO. This will allow any market that buys the option to buy it from you, i.e. cboe, amex, philadelphia or any number of exchanges.
The exit strategy that we have come up with is a little complex, but it allows you to "walk away" from the trade. You can know that you're out of the trade with whatever percentage loss we set as the limit. At the same time it makes the upside potential almost unlimited. It also frees you from having to watch the market. It takes all the emotion out of the trade, which is half the battle. We hope this helps.
Copyright © 2006 Stock Option Investing.com
Stock Options
Stock Price Option Option Price Expiration/Strike Price Volatility Probability of Profit Trailing Stop
SCSS 39.06 QSLFH $270/contract June 40 Call 38 88% 40%
NEW 48.58 NEWHJ $270/contract August 50 Call 36 88% 40%
ZOLT 21.21 LVQFD $275/contract June 20 Call 48 87% 45%
--------------------------------------------------------------------------------
Don't pay more than the option entry price listed above.
Place a trailing stop based on our percentage above using trigger by points.
Buy at the ask, sell at the ask price.
Optionsxpress.com is the only broker who will allow this.
Below is a brief explanation showing you how to make the profits we make, while still limiting your loses.
We are including it with every newsletter from now on.
We don't send exit signals, i.e. specific prices, because they are useless. Everyone's risk tolerance is different. We would have to custom design a newsletter for every subscriber, all with different amounts of investing dollars and each with a high or low tolerance for risk. The sold prices on our website reflect our exit strategy in our newsletter. Here is an example:
IBM is $60 a share. A May $65 option contract may cost $2.20 bid and $2.40 ask. In our newsletter we say to buy at no more than $2.40. We also suggest a 40% trailing stop based on price. So, we buy IBM at $2.40. 40% would be $1.00. So the option would have to lose $1.00 before it is sold. Since it is a trailing stop, it follows the price as it moves up. Below is an example on a virtual scenario on how the trade would work, you will see why this is better than a suggested exit price.
We use trigger by points instead of bid or ask The profit margins are higher.
Example bid is 2.40 40% would be .95 cents. Enter the trade to trigger by .95 points. This way the most you lose is .95 of your original 2.40. If the option rises to 4.00 and backs off to 3.05, then it's sold for a 27% gain. It's sold by the trigger of losing .95 cents.
We use our percentage trailing stop as a guide to determine a trigger based on entry price. Example: IBM call ask price is 2.40. If we recommend a 40% trailing stop, your stop is .95. If IBM option goes to 4.00 then drops to 3.05 your option would be sold based on the .95 trigger. It's the same as a 40% trailing stop, but works better than bid/ask.
We buy at the ask or below. Figure our trailing stop based on percentage, then get our point value for the stop. We trigger sale by ask price. This way we buy at the ask and sort of sell at the ask. It makes up for the difference in the original spread between bid and ask.
The following was a queston sent in by a client. Our answer will help many of you.
I enjoyed my free subscription and I am planning on signing up before too long. However, I have a couple questions regarding how I am supposed to place trailing stop orders through optionsxpress.
I understand that after you have placed and executed the "Buy to Open" order, you place another order by choosing "Sell to Close", choose "Market", then choose "Trailing Stop" under "Advanced Orders". You then choose "down" under "Direction", enter the number of points, then click "Points" instead of "%". The "Trigger" option is where I'm confused because there are 4 different options to choose from; "default", "last", "bid", and "ask". Which one do you choose? Also, do you check the box next to "Set a Trigger on your Trailing Stop"?
One more thing: When you place an order, under "Routing" do you just leave it on "Best (NBBO)"? Thanks a lot and I'm sorry if these questions sound dumb. Its just that I want to make sure I'm crystal clear on this.
You want to trigger at the ask. This gives you the highest exit price. Do not put a check in the box. Leave the routing set to NBBO. This will allow any market that buys the option to buy it from you, i.e. cboe, amex, philadelphia or any number of exchanges.
The exit strategy that we have come up with is a little complex, but it allows you to "walk away" from the trade. You can know that you're out of the trade with whatever percentage loss we set as the limit. At the same time it makes the upside potential almost unlimited. It also frees you from having to watch the market. It takes all the emotion out of the trade, which is half the battle. We hope this helps.
Copyright © 2006 Stock Option Investing.com
What a load of crap.
What a completely cheesy, crappy advisory.
What would they "advise" you to do if the day after you buy or sell (or intraday for that matter) an option, it "gaps" through your trigger? Say it gaps up or down on news 50-60% or more of the value of the option? On top of that you notice that the market is moving away from you, gaining momentum. What does your "advisory" tell you to do then?
Do you close out with a 50-60% loss? Do you hold hoping it will correct back? Do you roll up or down? Whatever you do, you have just blown your "budget" haven't you? Is this a trade you can "walk away" from? Sure it is. However you have just got your ass kicked, because you have trusted that these folks would take care of you, instead of learning the business on your own.
Typical of these crappy newsletter advisories, they restrict their scenarios to those that show a nice profit and "no or low risk" way to manage risk.
Let me know when you find one includes both a worst and best case scenario, and "advise" that makes sense.
And thanks for exposing these complete losers for us all to see.
Best Regards,
Steve
What a completely cheesy, crappy advisory.
What would they "advise" you to do if the day after you buy or sell (or intraday for that matter) an option, it "gaps" through your trigger? Say it gaps up or down on news 50-60% or more of the value of the option? On top of that you notice that the market is moving away from you, gaining momentum. What does your "advisory" tell you to do then?
Do you close out with a 50-60% loss? Do you hold hoping it will correct back? Do you roll up or down? Whatever you do, you have just blown your "budget" haven't you? Is this a trade you can "walk away" from? Sure it is. However you have just got your ass kicked, because you have trusted that these folks would take care of you, instead of learning the business on your own.
Typical of these crappy newsletter advisories, they restrict their scenarios to those that show a nice profit and "no or low risk" way to manage risk.
Let me know when you find one includes both a worst and best case scenario, and "advise" that makes sense.
And thanks for exposing these complete losers for us all to see.
Best Regards,
Steve
tj,
what is your goal when it comes to trading?? will you always relying on someone else telling you what to do? what happen if the site goes out of business or if your guru dies, will you just go find another signal vendor?
you need to stop and revisit your goals and see if you want to be in this business long term.. then start learning and improving your trading skills so you yourself 'know' how to trade. there are countless stocks and options strategies discussed here at ET and other free sites, and by some exceptional traders.. most of all they're free!
what is your goal when it comes to trading?? will you always relying on someone else telling you what to do? what happen if the site goes out of business or if your guru dies, will you just go find another signal vendor?
you need to stop and revisit your goals and see if you want to be in this business long term.. then start learning and improving your trading skills so you yourself 'know' how to trade. there are countless stocks and options strategies discussed here at ET and other free sites, and by some exceptional traders.. most of all they're free!
I guess I need to learn more about this stuff then because I thought that I'd pretty much have to use an advisory service to avoid losing myself in the options market. My father and I tried using Wade Cook's seminars before he tanked out of business and we failed miserably. I know that a ton of money can be made from options trading, I just don't know where to look to do it. If I really could learn this myself I'd love to but I don't even know where to start.
I think it would be easier if you just told us how many times you need one of us to tell you this is crap before you believe it so we can just get to that number quickly.
Advisory services make money selling a service, not managing your money or making you money. Lost it all last month, they still make $200. If they could double their money each month, it is beyond stupid to sell such a system for $200 a month instead of borrowing $10,000 and trading it for 3 years and retiring.
They make money from mass selling the SAME pick you are getting to as many people as possible. Does that sound special to you? You are paying $200 for the same thing 1,000 other people are being told to do?
Let's assume you start with $5,000 to invest, you are already in the hole for 50% loss due to the $2,400 in fees for the service. Now no one is 100% right so if you take some losses you are in a huge hole and need a string of winners to get out.
People who can make good trade picks and be right more than 50% of the time with good risk management, TRADE THOSE PICKS to make money, they do not sell them on E-bay for $200 a month (which is what an advisory service comes across as, a flea market sale).
Advisory services make money selling a service, not managing your money or making you money. Lost it all last month, they still make $200. If they could double their money each month, it is beyond stupid to sell such a system for $200 a month instead of borrowing $10,000 and trading it for 3 years and retiring.
They make money from mass selling the SAME pick you are getting to as many people as possible. Does that sound special to you? You are paying $200 for the same thing 1,000 other people are being told to do?
Let's assume you start with $5,000 to invest, you are already in the hole for 50% loss due to the $2,400 in fees for the service. Now no one is 100% right so if you take some losses you are in a huge hole and need a string of winners to get out.
People who can make good trade picks and be right more than 50% of the time with good risk management, TRADE THOSE PICKS to make money, they do not sell them on E-bay for $200 a month (which is what an advisory service comes across as, a flea market sale).
local library...
seriously I do agree with the other posters this advisory service is a pos...no spreads? no real option's strategies. My cousin lost abt 10 grand (that he could not afford) on following Wade Cook about the time I got interested in options. I don't know that you can make a "ton" of money in options, but they are certainly useful as portfolio hedges and kickers. Definitely worth studying. If you are serious about learning, put your money in a CD or broadbased mutual fund and start with books...options threads...free thinkorswim classes.
The other thing is that has been mentioned is before you study options you do need to have a solid foundation in the market and understanding of fundamental as well as technical studies, decide what kind of trader you are etc. If you do not have a foundation in the underlying (stock or index) you will not do well in options trading.
There is NO shortcut or easy answer....the fastest way to LOSE money is investing/trading what you do not know or understand.
Best wishes in your endeavor.
The interesting thing about these options advisory services, is that most of the time they aren't even registered investment advisors, dealer/brokers, or any other type of educated investment professional. They are skirting around the rules regarding mass recommendations by using small print disclaimers and technical loopholes.