Frequently Asked Questions
First of all what makes this options trading secret 'winning'? And why do you call it a secret anyway?
The reason we call it 'winning' is because if you sell short term--eight weeks or less--out-of-the-money options with the right risk profile, statistically you will win 80 to 90% of the time. Virtually no other options strategy in the world of trading can make that claim.
The reason we call it a secret is because out of all the people that invest and trade only a fraction of them trade options--and out of that fraction only a tiny number trade credit spreads and iron condors. And out of the ones that actually do trade spreads or condors only a very small number trade them correctly so they consistently win.
So you can see that only a tiny number of people practice profitable credit spread trading which qualifies this knowledge as a 'secret' in the sense that very few folks know about it, and even fewer actually trade these options strategies correctly.
If it's so good why doesn't everyone do it?
As you already know most people simply don't realize these types of options strategies exist. But for those who do and choose not to trade options this way there are some simple explanations.
For one thing selling an option to open a position (Sell to Open) is not as 'exciting' as buying puts or calls and then crossing your fingers hoping to win the lottery. Buying straight puts and calls can certainly be an exciting way to trade options--if your definition of 'exciting' is gnawing on your fist while your entire option position drains away to nothing.
'Selling time' is a more passive options strategy because you are betting on time decay--but it is also more profitable--and that is really the kind of excitement most of us need.
Yeah--but you can still lose money trading credit spreads. Right?
Yes. You can lose money trading credit spreads. One of the ways to look at trading is you get paid to take risk. The markets wouldn't really be markets if there was no risk. If one side of a trade won all the time the other side would pack up and go home--and you wouldn't have a market.
But here's the trick--maximizing your potential for profit, while minimizing your risk. If you try to make that your goal--and that really is the smartest goal of any options trader--you will quickly realize that there is no better way to trade options than selling short term out-of-the-money credit spreads because the deck is so stacked in your favor.
Okay, you may have a point--but what the heck is a credit spread anyway?
A credit spread is selling one option, and then buying another option to limit your risk--the difference in price creates a credit in your account.
Essentially when you sell an option you sell someone the right to buy the stock from you at a certain price (selling a call) or sell the stock to you at a certain price (selling a put).
The truth is we never want to have to buy or sell the stock--we just want to the money for taking on that possibility. If you work it right you'll get paid the money for selling your option but never have to either buy or sell the underlying stock.
But if the underlying stock does overrun your sold option you want some insurance in place to protect you. The insurance we use is buying an option to hedge against your sold option. The difference in strike prices between the option you sold and the option you bought is called the 'spread'. And because you sold something that has more value than what you bought you immediately receive a credit into your account. So that is why this strategy is called a 'credit spread'.
What do you mean--'If you work it right' you'll get paid the money but never have to either buy or sell the stock?
One of the biggest winning secrets we use is to sell options that that have a very small chance of ever becoming 'in-the-money'--and if the options we sell make it to the third Friday of the month--expiration Friday--without being 'in-the-money' then we get to keep all the premium we took in for selling those options.
Sounds great, but what happens if the option you sold does become in-the-money?
We'll teach you several options strategies to avoid the possibility of your sold strike becoming "in-the-money". You can buy back the option you sold if the underlying stock gets close. You can adjust out to a further strike price, you can sell a further out expiration month--you can do a lot of things to help your options position--one of them however is not just letting your position go. You'll learn some simple adjustments and money management strategies to keep you in the profit column no matter what the stock is doing.
Okay, so maybe this is something I should look into--how much money can I make?
Even with the occasional loss, we're booking between 8 and 15% option profits per month. Those are the kind of returns most investors would be delighted to get in a year. In one very real sense that means you can compress 12 years of successful investing into just one year by trading spreads and condors--a pretty inspiring thought for anyone approaching retirement age.
That sounds almost too good to be true--do you have any proof that your options trades are successful?
We offer a free options trading newsletter service you can get on that states our trades and success rate. You can get on the list by clicking here.
Sounds good but before I would even consider trading options I'm going to need some very specific details on what to do--and what not to do. How can I get the kind of information that will give me the confidence to actually trade this strategy?
We have a super complete course that covers every detail of how to trade this strategy successfully. When to place a trade, how to know what strikes to sell and buy and how to adjust your positions if you need to--in short everything you need to generate consistent monthly profits using credit spreads and iron condors. For complete details on the course click here.
