Do I have to trade options?

Do I have to trade options?

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 […]

Do I have to open an options account?

Do I have to open an options account?

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 […]

What level of an account do I need?

What level of an account do I need?

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 […]

Which brokerage firm should I use to trade options?

Which brokerage firm should I use to trade options?

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 […]

Why do you have “limit” orders?

Why do you have “limit” orders?

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 […]

Will I really get to close out trades of 100% per month?

Will I really get to close out trades of 100% per month?

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 […]

How much should I put in each trade?

How much should I put in each trade?

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 […]

Do you use stop-loss orders?

Do you use stop-loss orders?

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 […]

What risk tolerance is needed for <em>Precision Profits</em>?

What risk tolerance is needed for Precision Profits?

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 […]

What is the average holding period?

What is the average holding period?

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 […]

Should I reinvest my gains?

Should I reinvest my gains?

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 […]

Why don’t you use trailing stop orders?

Why don’t you use trailing stop orders?

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 […]