What To Look Out For
Be careful of other option trading sites that attempt to trick you into thinking they are giving you amazing returns! Only use sites that provide you BOTH buy and sell notices & provide research regarding the proposed trade!
Sites That Only Provide Half The Service!
Don’t be fooled by other option investing sites that post huge return numbers. What these sites all do is tell you when to buy the option and then totally leave it up to you to pick when to sell. What kind of service is that?
In most cases a position will increase in value at some point, but knowing when to get out of the position is key, especially when you are dealing with buy side single leg positions.
It’s really a scam and misleading statistics, it works like this. The site will tell you to buy the XYZ Jan 100 call for $1.00. If the position increases to a value of $1.50 over the next 30 minutes, but then starts to fall rapidly and by the end of the day is worth only $.50 the site will show that it had a 50% return on investment for a big win, even though no one sold it there, not even the analyst who recommended the trade. The fact is the majority of the people on this trade likely lost.
These types of sites do this over and over again showing best case scenario trades that no one actually ever gets. The only way they show a loss is if the recommended trade goes straight down after the being posted. If at any point the trade goes positive, even if it is just for a second, the site will show it as a win.
Watch out for such misleading statistics, if the returns look too good to be true, the investment site is probably doing some kind of tricky reporting system like described above.
Why Is The Site Entering This Trade?
It’s crazy to think that many sites that recommend options trades post no logic at all on why they are doing the trade they are doing. Where is the research? What is the logic? Why are they executing that trade?
Trading blind is not an investment strategy and no one should ever enter a trade without understanding why they are doing what they are doing.
If there is no reasoning behind the trade, how would you know the analyst is not just selecting random positions and hoping for the best? Or maybe there is some logic, but it’s weak and you would not have agreed with it had you known why they executed the trade.
How are you going to learn what to look for on your own if there is no logic? Unfortunately, there are many people who pretend they know what they are doing in the options world, but actually, have little to no idea. We call them pretenders!
Pretenders cannot write detailed research reports to defend their actions, so they don’t write anything at all. Don’t get fooled into signing up for one of these services, which are often accompanied by a nice shinny website filled with a lot of fluff features that have little to no value.