We trade weekly stock options spreads that will have a very high chance of expiring worthless. To find out more request for a free personal phone call from John.
How Does John’s Service Works?
As a paid member, you will get
i) John’s Trade alerts into your email whenever he makes a trade, can also view the recorded archive of trades on the website on your member’s welcome page when you login. (example of it)
ii) John’s Series of Options Strategies articles which you can view the recorded archive on the website on your member’s welcome page when you login. (example of it)
iii) John’s Weekly Newsletter into your email whenever he makes a case study on previous week, can also view the recorded archive on the website on your member’s welcome page when you login. (example of it)
iv) John’s Twice Daily, Intraday News that will talk about the sentiments of the market and what is going on around. And his trading instinct of what possible trades are going to be done.
Is It Really 2-3% ROI Weekly?
We said it is 2-3% ROI per trade, but saying that it is gross (excluding commissions from brokerage firms). This question does create some people questioning if it’s worth following this trade alerts.
Certain brokerage firms charges between $1.50++ to about $2.50 per spread contract. So if we trade the SPY, which is $1 spread, getting 1 contract of a spread at $0.03 (3% gross) will get us $3 (gross) profit, less the contract commission, its actually a $1.50-$0.50 (net) profit. So the real ROI is actually 0.5-1.5%… You might say “Hey John, thats not 3%!” I shall explain on 3 things.
i) Now let me tell you something, there are brokerage firms out there charging far lesser commissions and sometimes as much as 10 times (or more) lesser. No doubt we cannot demand that you change your brokerage firm to suit our trade alerts and strategies, but think about it – For every penny that you pay lesser for the commission, it adds up to your ROI and every penny saved goes to your net profit. At least we know that Optionshouse.com (US citizens and US Alien Residents only) is cheaper by a lot!! So is our newest find, Eoption.com (see see Options House rates and Eoption Rates). Eoption is the next good alternative for Non US residents, if you are doing good amount of contracts, especially in our case.
ii) The major issue is, trading with $1 spread. The issue is greatly reduced if we were to trade with over $5 spread stock options. And we are looking into that, but these setups does not surface on a daily basis. SPY trades are more common using our strategies.
iii) Lastly sometimes we do get more than 3% gross (5-10% possible ). No promises, we take what the market gives us.)
How Do I Trade With These Alerts?
Ok, first you need to understand what type of strategies play we use. We only use the Bull Puts Spreads and the Bear Call Spreads for our trade alerts trades. Click on the links to read and understand these 2 strategies.
Depending on the trade alerts, you will have to go for a Puts Spread or a Call Spread.
Executing The Trade
The best way to learn how to execute a Credit Spread Trade with the trading platform you are using is to call them and ask. They are going to make money everytime you make a trade whether you do or not. For this reason call them, tell them what type of trade you are interested in making and ask them to show you how to set it up. Then all you have to do is prepare for your trade and wait until you find one to execute.
When you do execute it, according to the trade alerts, open spreads position, and that’s it. Let it expire worthless and you get to keep the credit you get from the selling of the credit spread. You should still watch it at least, at the open every day and 30 mins to 1 hour before the close (especially on the expiration friday), just to be sure no major changes against your position.
What If The Trade Goes Opposite Directions?
If we trade with a dollar spread, you will take 25% of the dollar spread (0.25) to add the sold leg strike price, and if the price of the underlying stock hits that derived price, it would be time to cut losses. But it has not happened before since the day I traded with this strategy. But for illustration purposes, see the examples below.
i.e – If we opened a Credit Bull Puts Spread for SPY at 130-129. It means we sold at 130 and bought 129. So since its a dollar spread (130-129), we will add 25% (0.25) to the sold leg strike price (130) which we will get a derived price of $130.25. So if SPY started to slide downwards heavily and reaches $130.25, then it would be safer to cut your losses and close the position at the market price. The losses can be anything from 30-50% worst case scenario, but like I said before it has never happen for me since day 1.
Same goes for Credit Bear Call Spreads say we opened for SPY at 135-136, it would means we sold 135 and bought 136, same thing a dollar spread, we will add 25% (0.25) to the sold leg strike price (135) which we will get a derived price of $135.25. So if SPY started to soar upwards heavily and reaches $135.25, then it would be safer to cut your losses and close the position at the market price. The losses can be anything from 30-50% worst case scenario. Again never happened before.
In case we really really need it, we will inform you of a closing position trade via a trade alert too. If not its always open and let it expire worthless.
What Can We Do To Prepare For Possible Trades?
If you work during the day but have access to your computer and you would like to execute trades with us, there are three things you will need to have open to make a trade with us real time:
i) Your email needs to be on so that when a trade alert is sent, it can be seen quickly. Some times trades need to be executed right away or they can change quickly depending upon the volatility of the day.
ii) Your Trading Platform needs to be set up and ready to trade. (contact your platform management company/broker to find out how to set this trade up)
iii) You need to have your live options screen going so you can verify the trade in case it changes on us. Your trading platform usually provides this also.
iv) we are starting to do Autotrading with our broker provider, Eoption.com, where members who cannot trade during trading hours can benefit from John’s trade alerts, simply by tagging along with John’s trades executed in his Eoption account. For more information on how you can benefit from Autotrading please contact John here.
Money And Risk Management – How Do I Allocate My Cash For The Trades?
There is no real right or wrong way to allocate your cash per trade. If you are trading a small amont, like $5000 you may want to allocate all the money for the trade. But, if you are trading $50,000, you may want to make trades based upon $25,000 increments and split your money up per trade. Sometimes a trade may be far enough out of the money where it will be very safe to put all into that transaction, but then again, no right or wrong answers, purely your personal preference.
John, Can You Make The Subscription Cheaper???
Now, this is really annoying to see people asking for discount on discounted prices. The answer is “No”. Reason being:
i) at $149.95 per month, its a rip-off already!! Imagine your lowest acct balance could be $10,000, and based on a 3% trade you will make anywhere between $100-250 (depending on your brokerage commission fees). You can break even in one trade or in short just a week! Just do a Google search and you will find other websites charging $100s of dollars for something that has got a low or lower success rate percentage (which means you can still lose money on your trades, compared to our so far 98% success rate for more than 19 months).
ii) Put it this way, you pay a premium for what is considered to be of premium quality. We see ourselves as a premium service provider. We Will increase the price once we start to have customers telling us that our alerts has helped them make good returns in the market.
$29.95 is just the minimum we measured good enough for everyone to start and see how good this is. $29.95 is only sufficient to cover our hosting, coffee for the late night troublshooting, web programming and platform etc, we have not even include the time we spent on asking questions for dozens of potential members…$29.95 was the beta launch price, sorry folks, too late (updated July 2011)..
iii) At $149.95, you are totally getting a bargain, because you are techinically borrowing John’s decades of experience, his analytical skills, his time to read on current affairs, and best of all, he decides for you when to enter a trade and how much you should make…. Not many people out there can do that for you, and at this price…. NEVER!!
iv) Imagine, we are like the gurus, who are claiming our success rate, and instead of charging you upfront thousands of dollars, we offer to you at a lower price, to immediately get access to profits, best part, you don’t even need to sweat it on the research and stock pick. I cannot think of anyone else willing to do that!! “Use first pay later“, kind of theory.!!!
v) With everyone having different fear, greed and analytical skills, you do not always get the same trade ideas, even if 2 people goes to the same thousand dollars trading course. With us, you get the exact trade idea (that we-put-our-money-where-OUR-mouth-is trade), we sweat it out, you just need to execute. But please due to SEC regulations, we have to remind you to read the disclaimer properly, you are still responsible for your own actions.
Why Do We Need To Stay Premium?
The good thing about paying a premium price, is, when it is more expensive, we will have the more commited people who cares about their trading career staying with us, and the numbers will become smaller, which means we can give more personal touch to our members, members will have more attention and time from John and the team of coaches (future).
Not only that, we have plans to upgrade our services, to provide more detailed and structured learning platforms, better way of alerting members of a trade. You know what, MOST of the money we get from members goes back into upgrading and giving our members more quality and premium stuff.
We Have Increased Our Prices!! And May Increase Again In 2012
We will only increase it based on customer’s successes (which we did from our beta price of $29.95 to $149.95 in July 2011, and it was due to the succcess of our members, some of them even said its too cheap, we totally agreed). However, WE maintain that (especially John) that the fees must not exceed the profits that our members can make from their trades, that is our priority.