FAQ

In  a nutshell, what is your investment strategy?

We sell credit spreads, some that expire weekly (The Weekly Plan) and we also sell PUT and CALL options that expire monthly (The Monthly Plan).  In both cases we earn premium that is ours to keep no matter what.  If the options expire worthless (out of the money), we realize the credit or premium for selling the spread or the PUT or CALL.  For credit spreads sometimes we sell a spread above price and a  spread below price thus creating what is called an Iron Condor.

Why Credit Spreads?

Most investment strategies are directional, for example, a stock purchase only gains if the stock price goes up (excluding dividends); you gain nothing or lose if the price moves sideways or down.  With a credit spread you can win even though the underlying security may move up, down or sideways.  Most people buy options or sell options (directional plays) that offer high potential returns but may be at high risk of loss.  We look to minimize risk and realize a consistent return when our option positions expire worthless.

What about Selling "naked" PUTs on a Stock, Isn't that Risky?

We do this in the Monthly Plan and actually this is our ultra safe trading strategy,  We start by selling a PUT on a stock we do not currently own.  However it is a good quality stock you wouldn't mind owning.  We expect the option to expire worthless thus you will not have to buy the stock.

However if you are "put" the stock it is like buying the stock at a discount due to the premium you earned when you sold the PUT.  We then advise you the next trading day of a CALL option to sell on the stock you purchased, thus earning more premium and lowering the cost of stock ownership.  This is called "writing a covered call".  If the stock gets "called" away you may likely earn more profit on the sale of your stock.  If the CALL expires then we will recommend selling another CALL for more premium.

I've never traded options before, what do I need to know to trade your system?

The free Videos provide a good introduction and overview of our system and demonstrate entering and exiting trades.  Also in the members area, we provide more in depth understanding of our trading methods.  However, you do need to have a broker account that is authorized to trade option spreads.  Most brokerage firms provide free and sufficient information about options and details for executing credit spreads.

What securities do you trade?

We trade stocks and any of the following index funds: DJX, NDX, RUT, SPX and XEO.  Respectively these funds track the Dow 30 stocks, the top 100 non-financial stocks in the Nasdaq, the Russell2000, S&P500, and S&P100 grouping of stocks.  The advantages of using these with our trading plans include:  liquidity, broad market diversity, cash settled, European style options (i.e., not subject to early assignment). 

Can I trade your system in an IRA account?

Yes. You just have to have your broker approve the account for credit spread trade orders.

How many trade alerts do you issue each week?

Every Monday Morning, if warranted, we issue new trade alerts (affectionately called Condor Flight Plans). You will get suggested credit spreads for the Weekly Plan and selected PUTs for the Monthly Plan.  All trades are entered as limit orders so not every trade alert may get filled.

Do I need to monitor my trades durning the week?

No.  You just wait for the next week to receive new trade alerts.  With the Monthly Plan we provide rules and instructions for adjusting prior month option positions, if necessary.  We also provide instructions for placing protective contingency orders to automatically close a position before expiration should price move too far against us.  These contingency orders can be entered in the evening after the market is closed for the trades that filled during the day.

How much money will I need in my account to trade?

Sorry but the short answer is, it depends.  You can trade all five of the index funds we track every week or pick just one index fund to trade.  We trade $10 spreads (strike prices are $10 apart) for RUT, SPX and XEO  so trading one contract will require $1,000 plus commissions and minus the premium or credit you receive.  We trade $2 spreads for DJX and recommend a minimum of 5 contracts (thus $1,000) per trade and for NDX we trade $25 spreads so the minimum of 1 contract will require approximately $2,500.

Good money management rules would suggest that no single trade represent more than 5% of your at risk trade account.  We also recommend that you never have more than 50% of your account invested at any one time.

What is the cost of your service?

Our service is offered for $99 per month for the Weekly Plan and $99 per month for the Monthly Plan. There are no refunds, however to become familiar with either Plan we offer the first two months for just $39.  You can subscribe to both plans at a discount for $149 per month and begin this plan on a two month trial basis for just $59.

Although there are no refunds, the first two months provide a trial period at minimum cost to you and sufficient experience to decide if our service is right for you.   We also recommend you paper trade our plans during the trial period to become confident and before you trade your investment funds.

What kind of returns can I expect with your service?

Take a look at the performance data  for the Weekly Plan and Monthly Plan.  We can't promise you will do that well, but if you try our service we expect your returns will consistently exceed that of any other strategy or system you have used.  Of course past performance is no guarantee of future performance but our experience and extensive back testing point to consistent and solid weekly returns that translate to annual returns not possible with traditional buy and hold strategies.