Frequently Asked Questions

Frequently Asked Questions

Answers to some of our commonly asked questions.

  • What is it that you trade?

    We buy and sell index options that expire weekly.

  • How do you make money?

    The options that we sell are valued higher than those we buy so that we receive a credit as we open the trades. This type of trade is what's known as an option credit spread. As each day passes, the value of this spread decreases. Depending on the situation, we either buy these back at a lower price or allow them to expire worthless.

  • Why do you not ONLY sell these option contracts?

    While ONLY selling options garner larger credits, that strategy poses too high a risk to justify putting ourselves in a potentially catastrophic position, should that type of trade turn against us. In that instance, we'd have no protection and could, theoretically, lose an infinite amount of money. However, by buying AND selling specific options, in what are called vertical option spreads, we minimize our exposure and afford ourselves the ability to effectively manage our downside risk. Remember - we are striving for trades with at least an 80% probability of success with moderate returns as opposed to trades reaping higher returns but cause sleepless nights.

  • How will I be notified of a new trade?

    Our subscribers will receive timely e-mails with detailed instructions on how to open each trade. Subsequent e-mails would follow should adjustments be necessary. We also maintain a member's page wherein we post the latest messages, trades, and current positions.

  • How many trades are made each week?

    We open up to one credit spread position each week and may add more to keep up with demand.

  • Will I be receiving an e-mail from you everyday?

    We realize that many services employ spam e-mail-tactics in an effort to trick their subscribers into thinking that they are receiving a lot for their money. We, on the other hand, are confident in the fact that our subscribers will instantly recognize the valuable service we provide and, therefore, do not resort to these tactics. The most important of e-mails would be those containing instructions on the opening of trades or adjustments, thereto. We do provide periodic market updates, but even this will not be an everyday occurrence.

  • When are trades opened?

    We monitor the markets everyday but only open positions when we see a good opportunity. There is no set day or time for when we open positions.

  • How long is each position held?

    On average, we hold our positions for two to four trading days.

  • When do we exit the trades?

    The best case scenario is when our position expires worthless. This does not require a closing trade, saving on commissions. Why pay commission costs when you don't have to? Sometimes we may close out a position early to take profits and remove any risk from the table. Whatever the case, all of our subscribers will be notified immediately by e-mail if we close out or adjust our position(s). In turn, the same message will be displayed in the member area for all to see.

  • Would I be able to follow your trades with limited trading experience?

    Most of our subscribers started with little or no experience. Our trades are e-mailed to our subscribers with very detailed and precise instructions so that our members have no problem entering and exiting. We first recommend paper trading and educating yourself (www.888options.com) on our strategies until you feel comfortable enough to actually make a live trade. With our trading experience though, our members have gained a comfort level with placing these trades and a substantially larger trading account to go along with it.

  • What if I still don't understand how to place the trades?

    If you have any questions or need help with a trade, it would be best to speak with someone at your brokerage firm. Each broker's trading platform is different and they would be able to assist you best. As another option, one could sign up for Autotrade to have their broker execute the orders automatically in their account. (more information on Autotrade below)

  • What type of brokerage account do I need?

    It is very important that you open an account with an options friendly broker that will allow credit spread trades. They will understand our trading strategy and have better pricing. If you do not currently have a broker, visit our Autotrade page.

  • Do you provide an Autotrade service with any brokers?

    Please visit our Autotrade page for a list of brokers that provide this service. After defining your allocation settings with your broker, your account will automatically trade when they receive our trade alerts.

  • How much should I begin trading with?

    This is something that you need to figure out for yourself, depending on your situation. Most of our subscribers have started trading with $10,000 or $20,000, earning $500 to $1000 per week. Any amount less than $5000 may result in noticeably reduced returns since you will have to pay your broker their commission. Be sure that you DO NOT invest your entire portfolio. NEVER put everything in one basket.

  • What is the difference between index options and stock options?

    Stock options are option contracts for a particular company such as eBay or Google. Index options are contracts for a particular index such as the DJIA, Nasdaq, etc.

  • Do you trade index options or stock options?

    We trade index options and index based ETFs because they are less volatile than an individual stock options. Indices consist of a number of stocks weighted together in one basket. If one stock in that basket has some negative news come out, the odds of the entire index trading downward is not likely.

  • Can I lose money with your system?

    Of course. All investments do not come without risk. With a higher than 80% success rate, one could statistically expect to have 1 losing trade for every 5. Although losses will happen, we feel that the consistent success of our strategy will more than make up for any losses that we incur. Take a look at our track record!

  • How are trades calculated on your Performance Page?

    We calculate our trades using the following formula: credit or debit / margin requirement

    Lets use SPX 1380/1385 Call for $0.25 credit as an example.

    If the trade expires worthless, we have now gained $0.25 per share. Since we sold a $5.00 spread (1385-1380), our margin requirement is $4.75 ($5.00 - $0.25). To get the percentage gain, we plug the numbers in the formula above. In this case, it would $0.25 / $4.75 or 5.26%

    Lets say this trade gets in trouble and we have to buy back the spread for $1.00. Our net debit would be $0.75 ($1.00 - $0.25). The margin requirements is $4.75 (calculated above). Our loss would be $0.75 / $4.75 or 15.79%

  • How much is your service?

    Our service is only $239.00/mo! Sorry, we do not have quarterly or annual rates. We do not have long term contracts and you may cancel at anytime.

  • How do I cancel my subscription?

    If, for any reason, you do not wish to participate in our system any longer, simply log in to the member's area, go to the Profile page, and cancel the subscription.

  • Paypal inadvertently cancelled my subscription. How do I reactivate it?

    Please go through the signup process again.

  • How do I subscribe?

    Click the Subscribe button below.

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