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Frequently Asked Questions
Are your stock option trading results real?
One of the first questions we are always asked is: Are the stock option trading results real? We want to be the first to say that there aren’t many stock option pick websites that will actually show their track record for their trades. Now, we won’t say we are the only one, because we are sure there are a few others. However, our belief is that you keep subscribers based on results and accountability. Yes, our stock option trading results are real.
Of course, not every trade will be a winner as you will see but we have a solid 5-year Track Record for all of our trades - a 73% success rate. You can locate each post by using the search box on our home page. These are good learning examples, and they are also time-stamped to show our integrity. We also have auto-trading partners who VERIFY our results.
There are many stock option picks sites that give you a “Closing Price” from the night before and say that is when you “could” have gotten in. Then the next day when you try to enter the trade, you find that the spread or entry price is totally different because of a large move. All the stocks and options we profile have the current market quote as we write the newsletter in real-time and do trade updates at least DAILY, for our members. We also send out new Trade Alerts or profit Alerts, if needed during market hours. There are no smoke and mirrors. If we are wrong on a trade, we will say we blew it. It’s that simple and the results are recorded.
When do you take profits?
We target profits at 100%, and raise our stops along the way. Occasionally, we have profiled stock option trades which have returned upwards of 2,500%. That is not a typo! However, for the most part our goal is to double our money on each trade. We usually take profits at 100%, and close at least half our position to protect our profits when we hit a triple-digit return.
What is your stop loss for each stock option trade?
We normally limit our losses to 50%. We use Stop Targets and Hard Stops depending on the specific trade. Once a trade hits our stop loss or is near our stop loss we usually move on. However, there are times where we may leave a trade open if we still believe it can turn around. We may occasionally adjust a stop 10 or 20 cents below 50%, but we’ll explain why on that particular trade. We have seen stock options lose 75% of their value only to soar by 500% the next day. It is also important to note we do not carry stops on options under $1.
Why do some option trades on your track record show losses greater than 50%?
We do not typically place hard stops on stock options whose premiums are less than one dollar ($1). The reason for this is due to volatility. If we did place a hard stop, we would routinely be stopped out and not give the trade enough room to work in our favor.
Do I have to watch the stock market all day?
No, absolutely not. All stock option recommendations come with clear stop targets and profit taking targets. You simply read the Trade Updates at 9 am each morning and in the afternoon. If there is action to take outside of our regularly scheduled updates, we will send out a Trade Alert or Profit Alert.
How often do you post to your newsletter and updates?
We do daily market updates at 9 am and 1 pm EST. Occasionally, we’ll do a mid-morning or late night post if there is news or if we have any option trades that need to be updated. Ongoing stock option trades are discussed in the Members area.
Do you offer e-mail for your stock options alerts?
Yes, all Daily posts and New Trades/ Profit Alerts are also sent to you via e-mail in real time – typically between 9am and 1pm EST.
Do you offer cell phone alerts?
Yes, when a new post or member update is made, you have the option to be notified via cell phone at no extra charge.
Do you offer auto-trading?
Yes, we do. Click here for more details.
How many stock option trades do you make on average each month?
We average anywhere from 1-3 option trades per week – sometimes more or less depending on market conditions. What we won’t do is make a trade simply for the sake of trading. We look for the BEST trades and the BEST conditions to make you money.
What do your stock option trade updates look like inside the Members Area?
Akamai Technologies (AKAM, $32.60, up $0.16)
February 36 calls (AKAM120218C00036000, $1.10, up $0.05)
Entry Price: $0.95 (1/6/12)
Exit Target: $1.90
Return: 16%
Stop Target: None
Action: We are looking for a run past $35.
MGM Resorts (MGM, $11.12, down $0.01)
February 11 calls (MGM120218C00011000, $0.83, down $0.02)
Entry Price: $0.78 (1/6/12)
Exit Target: $1.60
Return: 0%
Stop Target: None
June 14 calls (MGM120616C00014000, $0.52, flat)
Entry Price: $0.48 (1/6/12)
Exit Target: $1.00
Return: 8%
Stop Target: None
Action: We have a $17 price target for MGM in 2012. We think shares can reach $13 by February.
What type of option trades or strategies do you make?
We primarily buy call and put options, but occasionally we will do straddles and strangles option trades. If you are new to the world of stock options, they can be very complex. Once you learn how basic call and put options work, you can use them for more advanced trades like credit spreads, iron condors, and calendar spreads. All of these “advanced trading strategies” can be used with both call and put options, but they do not provide the same returns as directional, momentum stock trading does. It’s possible for a call or put option to gain 200%, 500% and even 3,000%, but advanced stock option strategies limit your income potential.
How do you decide which stock options to trade?
There are many variables that go into selecting a stock option trade. We discuss this in more detail in our stock options trading course. We can’t give away all of our secrets, but the bottom line is that you have to be able to identify which stocks are moving or which ones are ABOUT to move. Then we do our homework to define our profit (and loss) zones and decide if the trade is worth taking. For each option trade we recommend, we offer a detailed explanation as to why we feel a stock is ready to “pop” or “drop.”
Do you buy out-of-the-money stock options?
Yes. Most of our options trades are at-the-money or slightly out-of-the-money with an average price of $1.00 -$2.00 ($100 to $200 per option contract). There are times where we find cheaper stock options that only cost 50 cents ($50) for one contract. Occasionally, we may profile an option trade with a price tag of $3 or more. These trades are rare, and most of the time they involve stocks which are trading over $100 – $200 or more per share.
How much on average does each stock option cost?
Most of our individual stock option trades have an average price of average price of $1.00 -$2.00 ($100 to $200 per option contract) with an occasional option trade with costs $3 or more. A 10 contract trade on an option priced at $1 would be $1,000.
How much does each stock option trade normally cost?
We like to purchase 10-20 contracts for each stock option we recommend for a total cost between $1,000 – $2,000. However, as with all trading, carefully evaluate your risk tolerance level and how much you are willing to lose. Never risk all of your capital on a single trade! Only risk a small percentage of your trading account on any one trade – perhaps in the 2 – 5% range. If you buy 5 contracts, then your average cost per trade is $300 – $500. If you are just starting out, consider buying just 1 or 2 option contracts or even paper trading until you get use to our style and how options work.
How much money do I need to get started trading stock options? What % of your trading account is exposed to risk at any given time?
Never trade with money you can’t afford to lose. This is the first ruke of option trading. We recommend every portfolio should have a portion specifically for trading stock options but how much depends on you and your risk tolerance level. For our specific momentum stock options trading style, the absolute minimum account size we suggest is at least $2,000. However, with an account this small, a single 5-contract trade with a $1 option would cost you $500. That’s 25% of your entire account. With an account this size, you might consider buying only 1 or 2 contracts per recommendation. Ideally, an account size of $5,000 – $10,000 will give you more flexibility as to how many option contracts you can trade. With a $10,000 account you would only be risking 5% of your entire account with a $500 option trade.
Do you provide ongoing support?
Yes, our staff normally responds to all emails within 24 hours or less. Our stock options trading course manual is an “easy read,” and is written in a way to help you easily understand how call and put options work. We teach you step-by-step everything you need to know about how to spot a high probability option trade and define your profit and loss targets. The course only includes monthly/ bi-monthly videos which are included.
What exactly will I find in your Members Area?
As a subscriber to our stock option pick service, you simply login and read the daily market updates at 9 am and 1 pm Eastern Standard Time (EST). We give clear entry and exit points on what to look for as far as the option trade goes. Sometimes we will say this is a quick or day trade only. Other times we will go further out on the option trade to let a trade take shape.
The members area also includes a 30-page Welcome Guide that explains our approach in more detail, all of our track records (2008-2012), and other juicy nuggets of information.
Do you offer a guarantee or refunds?
No, we do not offer a guarantee or refunds as there are too many market factors beyond our control.
Cancellation Policy
In regards to our cancellation policy, due to the nature and scope of our service, we do not give refunds for partially used subscriptions. Recurring subscriptions can be cancelled at any time during the subscription period although a subscription cancelled during the subscription period will not be reimbursed, it will simply expire at the end of the subscription period. We offer a variety of subscription options with different time commitments to accommodate traders.
I have more questions. What is the best way to reach you?
Don’t hesitate to send us an email at support@momentumoptionstrading.com, or call tech support at (888) 898-0837 .
To speak to a trading consultant please call toll free: 1-855-346-7163
