All In the Money - Options Trading
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Options Trading
Bearish Spreads
ED (Consolidated Edison Inc.)
Trade Date: September 22, 2008
A 97.5% Return
Covered Calls
CHK (Chesapeake Energy Corporation)
Trade Date: August 4, 2008
A 16.57% Return
Buy Straddles
BRO (Brown & Brown Inc.)
Trade Date: September 22, 2008
A 191.38% Return
Have a question? Ask the experts.
Showing General

Category: General
Question: I was wondering if you plan on offering an auto-trade feature where subscribers to your service could have your options recommendations automatically traded for them by their online brokerage?


Answer: We have spoken with an organization to consider an auto-trade feature. However, there is no timeframe for implementing such a service. Our members say executing the trades themselves really serves to quickly increase their level of comfort and experience with options - as well as to make sure each selection works for their investment objective.
Category: General
Question: I'm looking to get involved with option trading. I found your site informative but I have a question regarding your past performance data. You show the plays, but did your site actually recommend the particular plays? If not, how would someone very inexperienced benefit from joining?

Answer: Our analyst presents a running list of Covered Calls, Bearish Spread & Straddle selections for you to consider against your option investment goals. The list of analyst selections are available for viewing in the members area with pricing updated daily until expiration. You benefit by studying the potential of each selection toward what you'd like to achieve. You'll definitely learn along the way and be able to decide whether to make the play through your broker or trading service.
Category: General
Question: Do you send out e-mail alerts to members for new selections? When is the best time of the day to check your web site for new entries? Does the monthly fee include all three option selection categories?

Answer: Currently, we do not send out email alerts regarding any updates to the selections. Our analyst reviews the site, updates information on current selections and enters additional selections each trading day around 5PM PST. Your subscription fee covers all selection information as well as the other password protected areas.
Category: General
Question: Hi, I just subscribed to your newsletter today. There's an "Exercised" percentage number in the Covered Call Selection. Would this be as if the Exercise happened today or in the past? Thank you.

Answer: The percentage returns listed are calculated using the selection's current option premium and current stock price - updated daily after close of market. Reference the "as of" date under each selection to determine if current day's updates have been presented.
Category: General
Question: I'm a new subscriber and probably have lots of questions in the first week or two. Here's another one. Under the performance, does the statement "Although a loss, several opportunities before expiration to contain the loss between 5% - 10%." mean your analyst recommend to exit the trade at each of those several opportunities?

Answer: The selections presented by the analyst are for your review & action per your personal investment goals. We don't recommend entry or exits. Each member has a unique set of criteria they wish to achieve in the process of options trading. If a trade nears or becomes a loss, you should know your tolerance for loss and at which point to exit the trade or to remain with it. The same is true for gains. At which point does the investor take his/her profit? Regardless of gain or loss, the situation will be different for each investor. Thanks for your question.
Category: General
Question: I am paper trading options and have noticed that some options increase in value at a much greater rate than others. I pick stocks with similar price ( both with a market cap of $10 billion +)and options that are similar in cost. For example, the stocks are both $22 and the options are both around $1.00. I deliberatly pick the nearest strike price of $25 in the nearest month.
When the stocks increase in price a similar amount, say 5%, one of the options will sometimes double or triple in value over the other. Why?
Am I missing something?

Answer: Take your scenario (a backtest is best) and pay close attention to the volatility of each stock. You should begin to see how this is a key component in option pricing through expiration. Also, look at the option interest for your trades.
Category: General
Question: First of all, thanks for a very informative website. Now the question. I understand the logic about writing covered calls but what I am having trouble seeing is how to profit/loss from writing in the money (ITM) covered call. If a stock is trading at $25 a share and the 20 strike is selling at 5.5 ($550) and there is a 'recommendation' to sell the 20 call, can you give me the profit/loss scenario if the stock trades higher/at/below $25 a share at the time of expiration? I'm just having a little trouble with the ITM selling.

Answer: Try your scenario using the covered call calculator. You can input several scenarios to clarify possible outcomes re: ITM Calls. The calculator will also help you determine if any option selection presented in the Member's area will work for your individual investing goals. Using this and other tools & information on the site, you can then make your trading decisions.
Category: General
Question: It appears that your posted returns only include the executed positions and you do not (seem) to include the potential losses (current value) of equity positions? Is it your view that you will hold those positions until favorable, and therefore do not account for stock price declines?

Answer: With most selections, the information for the exercised option offers the variables to calculate and present the return. If an option is not exercised and the result at expiration would be a loss, it is assumed the premium will be applied to lower the cost basis of the underlying asset (stock) & the stock will be held until the price rebounds - or the investor decides to sell & realize the loss. Thanks for your question. Hope this offers clarification in how returns information is presented for review.
**All In The Money and H2O-iGroup is an Educational Information Network, which does not recommend nor offer to buy or sell securities. The publishers of All In The Money are not stock brokers. The information provided is obtained from sources deemed reliable, but without warranty as to its accuracy and should be used as a research tool. If you invest money in the stock market, you run a risk of losing your entire investment. Always consult your stock broker or appropriate professional.

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