Although it's tempting to list specific option subscription services that I believe are trading scams, I've chosen instead to provide a checklist of what to avoid when considering subscribing to a service. That keeps me out of legal hot water and enables you to apply the criteria listed below to any trading service you're considering using.
Trading Scams is a subjective term anyway. Option trading options don't have to engage in actual fraud for me classify them expert scams. They just have to have the capacity or likelihood? Remember the 3 crucial questions I ask of a valid options trading service? Well, consider the checklist below to be the inverse equivalent.
It's an old adage, but a reliable one--if it sounds too good to be true, it probably is. There are no "secret strategies" or option trading secrets although there may be strategies you're not familiar with.
And those big bad professionals? They really couldn't care less what strategies you employ. As I've said elsewhere on this site, trading options is essentially the trading of risk. But trading do you think the odds will be that you'll have anything left to trade with in years?
Beware any option trading service that provides onsite or via email a list of calls or puts for you to simply buy and then just wait for them to double or triple in value. These may be easy trades to place, and you may occasionally hit one out of the park for a major triple-digit profit, but you're going to strike out a lot more.
And striking out in the options market means more than just walking back to the dugout and waiting for your next at bat--it means losing a substantial amount of money. Let me put it more plainly: In general, simply buying long calls or puts as part of a routine trading strategy is a pretty lousy approach.
There expert be a place for the strategy in special situations where you have a high degree of certainty that a stock will make a big move in the very near term and as long as that view isn't already priced into the optionsalthough there are arguably better strategies there as well, such as the straddle or the strangle. But the premise of this approach - that you can tightly limit your losses while letting your big winners run up huge profits which will more than offset your losses - is extremely difficult to pull off.
It's not that I'm questioning the validity of a service's winning trades. After all, trading options can result in options gains on a percentage basis. But my "trading scams" radar really lights up when I get an email listing five or more "recent trades" where I could have earned tremendous double trade triple digit returns in a matter of just days or weeks. What I would find immensely more valuable is what that email always fails to include - a list of the service's "recent losers.
Any option trading service that isn't a trading scam will provide some sort of trading of results or access into the service's workings. Transparency doesn't always have to mean verifiable performance and track records. Expert all, some option services don't provide actualy picks or trading recommendations.
Some services simply provide tools that are designed and marketed to make you a better trader. So transparency may involve other criteria such as how much additional educational content, resources, newsletters, blog posts, etc. Trading can learn options lot about online services or sites or organizations and how serious and legitimate they are by evaluating the quantity and quality of the complimentary materials they provide.
Trading scams are notorious for offering out of this world returns for pretty much no effort on your part. Now, I've never been a fan of Puritans, or their work ethic. I believe in working smarter, not harder. But trade, I believe in working. What I don't believe in is "get rich quick" marketing hype.
You don't need a day-trading mentality or devotion to every real-time squiggle on a stock chart in order to make good money with options. But the realistic option trader is willing to put in the necessary time and effort to actually learn how to trade profitably. And, sorry to have to be the bearer of bad news, but it's probably going to take more than "twenty minutes a month.
Option trading services are like any other kind of service. Some provide value and some don't. The ones that do provide real value stick around and gain a credible reputation and loyal following. And the ones that don't eventually go away. Unfortunately, they keep coming back under different guises.
The trick is figuring out which is which beforehand. The above is my attempt to assist you as you go about making your own trade and comparisons. Home Join Education Covered Calls Selling Puts Dividends Value Investing with Options! Option Trading Scams Option Subscription Services to Avoid.