: Precision Profits

If you wish to maximize your gains so you can rake in a consistent series of triple-digit winners, then yes, you have to trade options. Options provide incredible leverage. For many of the trades in the Precision Profits service, we are looking for only a small move in the underlying stock — between 5% and […]

Yes, but it’s not difficult. If you already have a brokerage account, you might need to request authorization to trade options. However, the process is very simple and often takes less than five minutes to complete. Check with your brokerage firm to see if they will allow you to upgrade your account online. If you […]

You will typically need “Level 2” options trading approval (levels can vary depending on what brokerage you’re using), which allows you to purchase calls and puts. It’s one of the safest strategies because your risk is limited only to the money spent purchasing the option. You’ll never be required to add more money to the […]

We encourage you not to use a full-service brokerage firm because you’ll pay significantly higher fees to get in and out of trades. Overall, most brokers charge a set fee for each options trade (usually around $5 to $9) and then a variable fee per contract (about $0.50 to $2 per contract). Below, we have […]

Limit orders are a way of setting the maximum price you are willing to pay. If the option is infrequently traded, it will often have a “wide spread” (the distance in price between what someone will pay to purchase the option versus what someone is willing to sell the option for). As a result, you […]

The Precision Profits strategy is to buy “at the money” options. So if a stock is trading near, say, $105, Jeff buys the $105 options. If it is between strikes — trading at, say, $107 with strikes at $105 and $110 — Jeff looks at pricing for the two options, and expectations for the stock […]

During the first year we beta tested the Precision Profits system, it averaged one trade per month with a 100% gain. Now, you have to keep in mind that there were some months where we closed out several trades for triple-digit wins. And there were some months where Jeff traded less frequently because the conditions were […]

First, it’s critical that you do not have your entire trading portfolio dedicated to options. You must stay diversified so you are not only protected against unexpected market volatility, but also so you’re well-positioned to profit from any significant moves higher. You should still have your staple investments while dedicating a small portion of your […]

Stop-losses are a great way to limit losses with stocks, but options are a different matter. We don’t use stop-losses often for one reason: Options are incredibly volatile. They can make quick, violent swings based on temporary or even irrelevant news. So an option’s stop-loss can be triggered even if the underlying stock is performing the […]

Precision Profits is for risk-tolerant investors who are able to stomach losing 100% on some trades. We don’t frequently lose that. But more often than not, if a position is a loser, it’s a 100% loser — and that’s on purpose. We generally hold positions to the bitter end because on more than one occasion […]

In general, Chris and Jeff look out to the upcoming season, so these are relatively short-term positions with expiration dates three to six months later, on average. And so far our average trade has lasted about two months. That said, Jeff also expects some options he recommends to move quickly, maybe because of a certain […]

In general, we think it’s best if you do not reinvest your gains. With options, there is always the risk that the underlying stock moves sharply against you in a single day and your position suffers a 100% loss. However, as you develop confidence in the service and with trading options in general, you might […]

Not all brokers allow you to place a trailing stop. More importantly, a trailing stop is calculated using the highest price of your asset while you’re holding it — meaning the trailing stop follows the movement of the option. If the price rises, so does the trailing stop. Since options can swing widely day-to-day, we […]

We have often been the ones who effectively launch trading in certain options. This isn’t necessarily a rare occurrence or a bad thing. While many companies we track in Precision Profits have a fair amount of volume — and some have a ton of volume — numerous stocks have very little options volume before we […]

You can certainly do that. The way we manage each position, as pointed out, is to sell half the position at a 100% gain, and then allow the other half to ride. That way, we’re working on house money. In practical terms, it is exactly like the strategy of trading just one position and setting […]

Jeff doesn’t look at broad market trends. They aren’t generally relevant to the Precision Profits system because seasonal trends don’t really care about overbought or oversold conditions. That’s a psychological indicator, and seasonal patterns are about the weather issues and consumer issues that impact various companies for various reasons. The market can be overbought and, […]

That’s all part of the Precision Profits strategy. When we have a losing option, we typically ride it to the bitter end. We do so because we’ve learned that we can be down in a position sharply, only to see that position rebound significantly in the final days as our expected trend takes hold. One […]

We don’t publish the list because it is subject to change. For instance, we had Valspar on the list (see Jeff’s dispatch about this), and yet Valspar is going away, consumed by rival Sherwin-Williams. Moreover, we don’t want people front running. If they know, for instance, XYZ is the next stock Jeff is looking at, […]

We don’t put out recommendations before the market opens or after it closes. Options are way too volatile for that. And the overnight spreads — the difference between bid and ask price — can be enormously wide, giving us a horrible indication of the market. If we put out a recommendation overnight, news could occur […]

For our official position to get filled and placed into the portfolio, the option price has to be within our buy range from the time the email leaves our office until we decide to cancel our orders. If the price is in our buy range, even for a little while, then at least some of […]

There are two factors to consider in this question: How far away is the option price from the recommended buy price? If the option is in the red, meaning we have a paper loss, there could be an opportunity — but that opportunity would be at a lower strike-price, since that would give you a […]

What most people don’t realize is that hedge funds and sophisticated investors spend millions of dollars researching weather patterns to determine where and when to invest. That’s because seasonality can have a huge impact on the bottom line, as Jeff has seen time and time again when analyzing his list of stocks. But taking a […]

Assembling a seasonal forecast is like putting together a global puzzle. The pieces include ocean currents and the jet-stream pattern, among others. And there are ocean temperatures to watch, which, to our in-house meteorologist Chris Orr, are most important because they influence the jet stream. He finds the first piece of the puzzle by using […]

Jeff will make sure to reach out to you every week, either with an update on your portfolio, a trade alert or a weather nugget. Every season, Chris also releases his quarterly forecast, which he and Jeff use to dictate their stock picks. And occasionally, when something particularly unique is stirring up in the atmosphere, […]

This is an excellent question, because, yes, there will be some periods of quiet during the year when we won’t have as many new trade opportunities. On the other hand, there will be plenty of periods where we’ll be busy with new trades. As for when those quiet periods strike, there’s one in particular: late […]

If you have a question that wasn’t answered, be sure to check out Jeff’s Q&A webinar here. In it, he addresses questions including: Is there any possibility of getting text messages instead of emails? How much can I reasonably expect to make? What happens if I miss making a great trade? How do I recoup […]