There was no volume on one of your recommendations until after the alert went out. If all of that volume is from Precision Profits subscribers, isn’t that problematic?

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 recommend the positions. In some instances, there’s not a single open position before we get involved.

This is something we were cognizant of early on, and Jeff and his colleague, investment analyst Chad Shoop, pay great attention to the volume once a recommendation goes out. We’ve not seen a case yet where the options weren’t able to handle the volume — even in cases where there were no open contracts to begin with. We’re not really moving prices the way we would if we were buying, say, shares in a stock with very limited volume or shares outstanding. The reason is that options are derivative — they’re an instrument that underlies the physical shares. As such, their price is largely determined by the price movements of the physical shares, as well as the time value remaining in the contract and volatility in both the physical share price and the overall market.

We’re not doing much to alter any of those with our buying. So even if there’s very little volume — or even no volume — the contracts we’re recommending are capable of handling the trades.

The only issue we confront is the ability to get people in at the price we recommend. We don’t want to tell people to overpay for an option, so we’re cautious on pricing, and sometimes the underlying shares move in price (in the direction we’re expecting) even as we release our dispatch … and the options move past our buy range fairly quickly.

So it pays to move on our alerts swiftly.