Index Credit Spread Options Trading Advisory Service

Frequently Asked Questions

I am completely new to Options Trading. How do I learn about them?
I provide easy-to-follow directions for each trade. With little or no experience trading options you can process these trades with any options brokerage service. During the 60 free trial you can practice paper trading all my trades using CBOE's Virtual Trading System. To learn more about options you can start with the free courses at the Chicago Board of Option Exchange (CBOE). You can start at the Learning Center taking the online tutorials.

What kind of brokerage account do I need?
You need to have a brokerage account that allows you to trade options, credit spreads and iron condors. You will want to use a broker that can provide quick and accurate trade executions. Within the Getting Started section you will find a listing of the most popular brokers for options trading, including CBOE 's free Virtual Trading system. You can use this virtual system to paper trade all my trade alerts during the 60 trial period. You will be able to practice executing, adjusting and exiting trades without risking your money

What exactly is a Credit Spread Option Trade?
It is an option trade in which you buy an out of the money option at a certain strike price and then you sell an out of the money option at a different strike price of the same month. As time goes on the options will decay in value and as long as the price of the index does not go past the sold strike price at the end of expiration you will receive a full credit winning trade.

What's the advantage of a Credit Spread Option Trade?
If you like the idea of knowing exactly what your profit will be, exactly when the trade is closed, and exactly how much money you will risk then credit spread trading is for you. Your profit margins will be between 2% and 5% on each trade and there are techniques for changing your trade if it becomes a losing trade to help you recover some of the loss. Also a credit option trade is less volatile than individual stock options. A stock can move up or down 10% or more in a given day, whereas with an index the probability of doing so is very rare and only happens in an instance of a market crash. Top of Page

Can I reinvest my profits each month?
The money is yours. This will be entirely your decision. Top of Page

How much is your service?
The subscription fee is $59.95 per month **. Online payments are processed through PayPal. This service is very safe and secure. I only receive your email address. You do not need to share you banking information or credit card number with me because PayPal takes care of securing your financial information. PayPal is a widely recognized and respected independent their party company based in the United States, which specializes in processing online credit card transactions for over 7 million users. You will automatically receive a 2 month free trial. You may cancel your trial or subscription at any time by simply sending me an email. Once I receive your email your account is immediately cancelled and you will not incur any further charges.

** Our subscriber base is limited and this limit will be reached later this month. The subscription fee is being increased later this month to $95 to limit this growth. Existing subscribers and new subscribers starting their 60 trial this month will always pay the lower fee they subscribed to. We limit the number of members due to the fact that too many subscribers trying to execute the same trade at the same time creates heavy volatility in the option price. I also want to keep the subscriber base at this level to insure I achieve these important goals:

Providing the best customer service possible.
Making each subscriber feel like the only subscriber.
Helping subscribers attain the goal of financial freedom.

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No one offers a guarantee so why do I do this? I am very successful and do not feel it's right to collect a fee when the net of all my trades is a net loss. There will be instances when one trade's loss is more than offset by another's profit. My goal is to earn a net profit for the month. I will occasionally adjust a trade to breakeven and prevent a loss. All trades and adjustments are emailed to subscribers. Top of Page

How much money do I need?
I cannot advise subscribers on how much money to invest. Many subscribers start with $10,000 to $20,000, making $500 to $1,000 per month. Anything less than $5,000 may result in reduced returns since you have to pay your broker their commission. Be sure you do not invest your entire portfolio. You must also keep some cash aside just in case we need to adjust any trades. Never put everything in one basket. Only 10% or less of a trading account should be tied up in any one trade and you should always keep 20% or more in reserve for adjustments. Top of Page

How long is the average holding period?
Approximately 45-30 days.
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Do you leave all trades to expiration?
Yes 90% of my trades expire worthless. However, there are occasions when I adjust or close a trade prior to expiration. Top of Page

How many trade alerts are provided each month?
I will email and post 1 to 2 Iron Condor trades per month. Each Iron Condor trade consists of 2 Credit Spread Trades on the same index, a Bull Put Credit Spread and a Bear Call Credit Spread. Sometimes I will execute both spread orders at the same time for an Index. This immediately completes an Iron Condor trade. Other times I will execute either the Bull Put or Bear Call Credit Spread trade first and then follow a few days or week later with the other trade to complete an Iron Condor. With my system, you need to open one position. This reduces the requirement for large startup capital as well as broker commissions. You are not required to follow all my trades. You may follow as many trades as you wish Top of Page

Click here to see what an actual trade alert and order ticket looks like.

Click here to see a recent Weekly Update that is emailed and posted to the Members Page each weekend.

What information is in the email and on the Members page for each new trades?
I indicate the exact options to sell and buy for each spread trade and a stop loss point. My system is very automatic and very risk adverse. Emotions play no role in my option trades and exits. These are recent new trades emailed and posted to the Members page. Top of Page

Do you offer auto-trading?
Currently we do not auto trade with any broker. Our service is focused on people who want to become good at trading non-directional, index credit spreads and iron condors. In addition to providing trade recommendations we also provide education allowing our subscribers to more quickly ramp-up on this strategy and to start generating a 3% to 5% monthly return, or a 50% or greater annual return. It's our belief that once someone puts in the effort to learn this strategy they will soon realize that they've discovered a new way to substantially increase monthly cash flow. I will help subscribers learn to trade credit option spreads with Flash movies that illustrate how to select, order , close and adjust these trades. Top of Page

I have never trades options before. Can you help me get started?
In 2007 I started creating Flash movie files, with audio, to illustrate how to select and order credit spread trades. I feel this is the best training tool for learning how to correctly process these trades. I am creating these movies using Adobe's Captivate 2 software and the virtual trading systems offered by OptionXpress, CBOE and OptionsHouse. I also make movies using TradeKing's trading system. I have a subscriber who also makes and contributes movies using the simulator systems at Interactive Brokers and Think of Swim. All movies can be run automatically form the Members area. Top of Page

When on expiration Friday are the Index (SPX, NDX , RUT) and ETFs (SPY, QQQQ, IWM) settlement prices finalized?
The settlement prices for the Index's are determined by CBOE once all stocks in the index are opened for trading. This is usually by 9:45 ET, but CBOE doesn't publish the prices until around noon. You can check settlement prices at the CBOE website. The ETFs final prices are set at the end of trading on expiration Friday. Top of Page

What is the CBOE?
The CBOE is the Chicago Board of Options Exchange - the largest options trading floor in the world. The CBOE has free, self-guided tutorials that teach you the basics of Calls and Puts, the intricacies of the marketplace, and the strategies used by options investors. Top of Page

What if another event like 9/11 hits the market?
Of course no one can predict the future. However it is a good idea to limit your risk and exposure in the market is case an event occurs that causes the market to decline dramatically. All Put Spread Trades should be protected with the Stop Loss orders I recommend. These orders are easy to put in place once your spread order is filled. If the market does drop dramatically your stop loss order will be executed automatically by computers and your Put Spread will be closed. Top of Page

Can I trade credit spreads in my IRA?
Yes. The options brokers I have traded with allow you to trade credit spreads in your IRA as long as your account is all cash. This is a federal requirement. Also, most brokers will let you use 50% of invested capital in non IRA accounts for margin. Top of Page

What is the downside to this trading strategy?
It is very boring. Trades are placed once a month and left to expire. Because my trades to very far out of the money (FOTM) they have a very high probability of expiring worthless. Top of Page

At what time do you send emails to subscribers?
I email and post in the member's area trade alerts, adjustments and updates in the evening. I also email and post weekly updates on all open trades each weekend. Top of Page

When do you exit a trade?
90% of my trade options have expired worthless on the 3rd Friday of each month. In the instance the index is very close to our sold option strike price an exit trade adjustment would be emailed. Top of Page

If I refer friends and business associates to your service what is my reward?
I understand that the best way to grow a business is to provide a great service and to have customers refer others to try my service. For every new subscriber you refer you will receive 2 free months. I will send you 2 PayPal rebates of your monthly subscriber fee. Top of Page

How long can I paper trade to learn how to select , order and adjust credit spread trades? Paper trading is the best way to learn. I encourage all new subscribers to paper trade for as long as they need to before trading with live funds. This is very easy if you do not have a brokerage account setup. CBOE has a free virtual trading system that you can use without having a brokerage account. This is the same system as OptionXpress's virtual system. All subscribers can practice using my trades for 60 days. If more than 60 days is needed I will extend the free trail period an additional 60 days, or as long as needed. While you are paper trading I will not charge you any subscription fee. Please request an extension at anytime by sending me an email. Top of Page