Monthly Option Spread Requires Large Capital Reserves
The traders are very good at choosing one spread that is likely to be very safe all month returning about 16% per month. Their ability to pick is amazing when the stock they choose usually rapidly moves in price away from the spread they recommended for the month. When that happens making 16% a month seems so easy. But every year there are exceptions when the trade gets overrun, and the service must make adjustment trades to keep the losses from being huge. If no secondary trade is made you will lose all of your investment except the 16% premium you got when you sold the spread. Typically, you are about to lose 84% of all the money you invested. To ameliorate this huge loss the traders have multiple techniques to decrease the loss. Maybe, they buy back the spread and sell a new one. But at this point you have very little money, say the 16% premium plus about 20% from buying the bad spread back. Now when they recommend you buy a new spread you must replace all of your losses with reserve capital. If they are run over again which has happened a year ago and again this month they recommend extending the trade out another month which again requires you to infuse huge reserve capital. Then a new month recommendation comes out and you need full capital for that trade. If you have all of this capital, then you will be able to do the adjustment trades they recommend. The upshot is that the amount of capital you must have dedicated to this system is not clear to me but about 4 times the amount that you are actually investing each month. And therefore the wonderful returns they publish and publicize are accurate compared to the investment amount you start with at the beginning of the month. But your account must have higher capital committed to it to support this system. With 4 times the capital committed to the account, your real return is 1/4 of what is published. A 16% return for the month really is a 4 % return on your total trading account capital. You have to have the extra capital immediately available to support the very bad months that occur. Since they don't tell you this, you must subscribe as i have for a year or two to figure it out yourself, and unfortunately i was wiped out once a year ago and this month I quit before i risked getting wiped out again. An explanation of the money management needed for this system to work correcly should be provided to any new subscriber. Don't get me wrong, these guys pick direction and sell a highly priced spread just before it collapses really well. It is pure joy to watch these picks every month. But, the money management necessary to support this system is not explained anywhere that i was able to find. I have subscribed for a year and a half, so i can't say my experience represents anytime period before I subscribed, or any time in the future. If you want to use this system for income, as they intend it to be used. Then I suggest you invest only 20-25% of the capital you have dedicated to this income account, and you will see a 16%*25% = 4% return on your total account in the good months, and a 40%*25% = 10% loss on your entire account in the bad months. Their stated goal is 50% per year gain (based on the amount invested at the initial trade for the month), which they often exceed. But that might really translate to 12.5%+ of the entire account. And that is very nice, safe income in today's market. I suggest for every $40000 capital you dedicate to this trading account you invest $10,000 maximum each month with a nice $1600 return many months and a $4,000 loss once or twice a year.
Good luck and remember, the whole reason I write this opinion is to help you not invest 50% of your trading capital as i did on my first attempt, or your losses will be much higher because you can't participate in the adjustment trades properly.
This review is the subjective opinion of an Investimonials member and not of Investimonials LLC
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