Has anyone subscribed to MTOptions before?

I took their free trial in Sep. 2009. Their track record includes all trades since inception in Apr. 2006. They claim for an average return of 55% per trade. According to the track record, the total portfolio profit is $70,188, based on trade size of $1,000 and average of 7-8 trades open at the same time. This looks very impressive till you start doing the math.

The total number of trades is 933. Average profit per trade: $75 (7.5% based on $1,000 trade).

This number includes commissions of $20 only per trade. However, since they trade mostly cheap options (30-50 cents), the average number of contracts per $1,000 trade is about 20-25, so the real average commission is about $50 per trade. This gives an after commissions return of about $30-40 per trade (3-4%). Definitely not 55%.

Considering the fact that they trade mostly cheap OOM options on high momentum stocks, in most cases by the time you get the alert, the option price is higher by at least 5-10%. So in some cases I had few doubles, but overall, I lost money. Based on the above calculations, your chances of making money with them are not good.
 
My experience, from an earlier time was that they went with the momentum of the market but were slow to adjust to reversals in the prevailing trend. (although that may not have hurt so much in recent steady uptrend). Anyway that was my brief experience -I wouldn't have spent much time analyzing it as I generally avoid Advisories as a bad idea. I guess I made an exception in this case due to some promotion they had.
 
Thanks. Did anyone check if it matches their track record with yours? Do these advisory companies post truth in their past performance?
 
I looked at their past performance numbers and analyzed a back-tested portfolio with my my trading parameters of 10% per trade. The numbers were impressive. Very impressive. But a closer look revealed they are very inconsistent. The test porfolio, while producing gains and losses was flat from April 2006 Through August 2008. Not so good. Then from September 2008 through May 2009 the portfolio produced seriously huge gains. I'm talking turning a couple thousand into a couple million. After that it was back to wild inconsistency. From May 2009 to March 2010 the portfolio goes up and down but overall drops 40%. That is where the performance data stops.

Perhaps against my better judgment I decided to try them out;
I have been autotrading with MTOptions for 3 months through Thinkorswim.

When I try out an autotrade newsletter I set aside a separate account dedicated to that service to see how it performs. I set up a trade allocation of 10% per trade for my MTOptions account.

Perhaps you will say that three months is not enough time to adequately judge a service. In many cases you would be correct. However, in the three months I have traded with them my account is down 80%.

Yikes.

Can you stomach a draw down of 80%? Do you think that a trading service that suffers a draw down of 80% can ever get you back to even? Probably not.

Bottom line, if you try these guys you had better catch them in one of their upswings. If you catch them in a downswing you will be wiped out.


For me, this had been a big mistake.
 
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