After all, trading options can result in monstrous gains on a percentage basis.īut 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 and triple digit returns in a matter of just days or weeks. It's not that I'm questioning the validity of a service's winning trades. #4 - Sites or promotional emails that only list a subscription service's recent winners There may 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 options), although there are arguably better strategies there as well, such as the straddle or the strangle.īut 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.Īny service that promotes this idea, in my opinion, is just looking to grab you for a month or two until you wise up (a shrinking brokerage account usually has that effect on people). In general, simply buying long calls or puts as part of a routine trading strategy is a pretty lousy approach. Let me put it more plainly: paying someone to give you a list of calls or puts to buy is, to me, the same as paying someone to give you a list of lottery numbers to play. 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. 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.
But what do you think the odds will be that you'll have anything left to trade with in 5-10 years?īeware 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. If you're willing to risk your entire portfolio, theoretically you can make a whole lot more than 100% a year. I do believe that making 100% a year is possible (full disclosure: in my best year, my returns were 61.92%). Some strategies are more complicated than others and some may have a more appealing risk-reward profile based on your own trading/investing personality, but understand this common denominator: the higher the return you seek, the more risk you're going to have to assume to achieve it. And those big bad professionals? They really couldn't care less what strategies you employ.Īs I've said elsewhere on this site, trading options is essentially the trading of risk.
There are no "secret strategies" or option trading secrets although there may be strategies you're not familiar with.
#In personal finance does jim fink give you the trades professional#
#2 - Any mention of "secret strategies" or references to strategies that professional traders or brokers "don't want you to know about" If a service claims (they usually merely suggest or imply to avoid their own legal hot water) that you can take a small sum like $1000 and turn it into $100,000 or better yet, an automated stream of monthly income enabling you to quit your job and live near a warm body of water, chances are it's a trading scam.
It's an old adage, but a reliable one-if it sounds too good to be true, it probably is. Here are 6 warning signs that a trading service is most likely a trading scam: Remember the 3 crucial questions I ask of a valid options trading service? Well, consider the checklist below to be the inverse equivalent. They just have to have the capacity (or likelihood?) to lose their subscribers a lot of money. Option trading services don't have to engage in actual fraud for me classify them as scams. Trading Scams is a subjective term anyway. 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. 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.
0 kommentar(er)
