Q: Are you selling naked options? Isn't that risky?
A: For the most part, NO, we're not selling naked options. And, yes, selling naked options can theoretically subject you to unlimited risk. To limit risk, we're combining long and short calls and puts in vertical or diagonal spreads to make up our trades, such as iron condors or calendars. Once in a while, however, we will sell a naked put at a strike price that we think is a great place to own the stock.
Q: Why not just simply buy a call or a put?
A: On an at-the-money (ATM) or out-of-the-money (OTM) options trade, the option buyer has to not only be right about what direction the underlying will move, but right about how far it will move in a finite period of time. This is very difficult to do and is statistically a losing proposition over the long run. For example, at the time of this writing, if you were to buy just a 5% OTM call option on AAPL with 50 days to expiration, you'd need the stock to rise 7.5% by expiration just to break even on the trade. Statistically, for AAPL to rise 7.5% in 50 days, there's only a 25% probability that AAPL will be trading 7.5% higher than it is 50 days from now. So there you have it, the option buyer has a 25% chance of success (and that's just breaking even) and the seller has a 69% chance that AAPL won't be trading higher than the option strike by expiration. Which odds would you prefer... 25% or 69%?.
Q: I've never traded options, can I use your service?
A: It’s great if you already have experience trading options, but we do all of the work so you don’t have to think about the trades or even know anything about trading options. All you need to do is call your broker and read him our trade details and have him execute the trade.
Q: How can I learn about trading options?
A: There are some good options education programs out there. Some notables are Online Trading Academy and Compound Stock Earings. Only problem is... they'll each cost you hundreds, even thousands of dollars for a weekend course. Then, they'll try to up-sell you to their week long courses which are tens of thousands of dollars each. With Positive Theta, you’ll get specifically tailored trades, configured to reduce risk and greatly improve the probability of a profitable trade. It’s great if you already have experience trading options, but we do all of the work so you don’t have to think about the trades or even know anything about trading options. My over 15 years of options trading experience allow you to immediately benefit from my knowledge and understanding of options, which can and do cause tremendous losses to novice options traders. So, sign up for a membership and trade along with us. You’ll make money right away trading options and you’ll learn more and more with each trade you participate in.
Q: Do you provide stops for each position? Is there a general rule for a 10% trailing stop or do you not want to be stopped out and leave the stop decision to the subscriber?
A: Yes, we generally provide suggested stop levels for either closing out (or) adjusting the position. Additionally, prior to entering, adjusting, or closing any trade, we notify you first.
Q: Do you offer Auto Trading?
A: Not at the moment, but soon it will be available
Q: How much is a subscription to Positive Theta?
A: For $59 per month, you'll be trading along with a professional trader and registered Investment Advisor . With many competitors charging $200, $300, and even $400 per month, why charge so little??? I want to make the Positive Theta service affordable for all investors, not just high net worth individuals.
Q: Do you offer a free trial?
A: Sorry, no. But $59 is a pretty inexpensive way to try out a service that generates low risk, consistent monthly returns.