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 […]

I understand your strategy of selling half of the investment once you hit 100%, and therefore you recommend buying contracts in intervals of two. If I can only afford one contract, can I place a trailing stop once we hit 100%?

I understand your strategy of selling half of the investment once you hit 100%, and therefore you recommend buying contracts in intervals of two. If I can only afford one contract, can I place a trailing stop once we hit 100%?

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 […]

You sometimes buy call options [a bet that a stock will rise], even though many indicators show the market is overbought. Do you ever consider market conditions when issuing a new long or short position?

You sometimes buy call options [a bet that a stock will rise], even though many indicators show the market is overbought. Do you ever consider market conditions when issuing a new long or short position?

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, […]

For a new member, do you still recommend entering recent open positions?

For a new member, do you still recommend entering recent open positions?

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 […]

How does seasonality affect businesses and the economy?

How does seasonality affect businesses and the economy?

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 […]

How do you forecast the events that will impact your list of stocks?

How do you forecast the events that will impact your list of stocks?

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 […]

How will you alert us about your forecasts and trades?

How will you alert us about your forecasts and trades?

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, […]

What if I have other questions?

What if I have other questions?

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 […]