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Have ”Instant Money Trader” strategy and advice borne out? It’s awfully promissory but has a credible underpinning i.e. selling ”options insurance”.
lee lowell’s instant money trader
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I had been a subscriber to Instant Money for 2 years. Loved the service and was doing quite well, until mid 2011. Two trades from his service , a Rimm naked put, and a Omx naked put were a disaster and took all my profits from the entire 2 years. Even though he rolled these trades down, the loss was impossible to contain. The ongoing education was great and he constantly keeps you informed. Unfortunately, I have to move on.
Lee Lowell recommends selling far out of the money, very cheap puts. The nature of such trades is that:
1. They usually make money, as the stock usually doesn’t get down to the strike price of the put.
2. When you lose, you lose hugely, all out of proportion to any possible gain.
One of the dangers of selling such cheap puts is that you might be tempted to sell a lot of them on margin. The problem is that if the stock goes down enough you will be required to buy the stock (100 shares per put) and if that means you have to sell your house, well, get used to renting. OTOH, if you are conservative and stick to cash secured puts you’ll probably be frustrated with the tiny amounts of money you’re making.