I consider this board among the sharpest, if not THE sharpest, in the MF board universe. Do you guys recommend the MF Options service? I confess that I don’t yet grok the options game, but it looks "interesting’ (aka dangerous).
Thanks!
- Bob
Hi Bob,
Do you guys recommend the MF Options service? I confess that I don’t yet grok the options game, but it looks "interesting’ (aka dangerous).
Options are a very sharp tool. Like any other tool, they can be very useful when used properly and safely, or they can cause great personal harm. Options can destroy net worth faster than just about anything else when used improperly. But they can also give you a lot more flexibility in your ability to profit from – or hedge against - various market conditions.
If you do wish to learn options, I highly recommend MF Options. They will teach you properly, and have a very high accuracy rate with their official trades. Options are very simple in principle, but there are a lot of subtleties in reality, so – if you do decide to try MFO – I very much recommend sticking with official trades for at least a year or two so that you can gain experience. You should also spend some time going back through their losing trades, as it’s very very important to fully understand how badly things can go (and all the different ways they can go bad) to avoid getting yourself into trouble. There are, sadly, many horror stories around the TMF boards from people who destroyed themselves financially through imprudent use of options (often after a lot of success that clouded their view of the risks).
If you want to learn how options fit better into broader portfolio management, I highly recommend MF Pro (which includes MF Options for free). It’s the best of the TMF portfolio services by far IMHO, and I’ve tried them all.
Neil
16 Likes
Bob, while I understand that people can use options cautiously, to hedge for instance, you have to realize that they are fundamentally different from stocks. When a stock goes up everyone invested in the stock gains. Those not in it only suffer an opportunity loss. However options are a zero-sum game, like futures. When an option settles up at the expiration of the option, one person loses exactly as much as the other person gains. Always. And you are competing against professionals. So be careful, as Neil pointed out.
Saul
3 Likes
Bob,
Options are definitely more complex than buying stocks. As such, they really take you in the realm of trading. Most people loose money with options because they don’t apply valuation techniques and simply bet on stocks moving up & down. However, options can also be a very powerful tool. And IMO the TMF options service teaches you how you should use options and how options can complement your stock holdings. Jeff Fisher is also a brilliant analyst and a very good teacher. So is Jim Gilles. So you learn a lot at MFO. Here are some examples of things you can do with options:
- Potentially buy stocks at better value points via written puts
- Sell covered calls and puts for steady income
- Perform stock replacement that allows you to participate in potential upside while limiting your downside
- Make large percentage gains on modest stock movement upwards (e.g., we recently made 100% gain on a KO call while KO has moved about 20% up in the same 1-year period)
- Have full exposure to a stock’s upside and downside without buying stocks!!! That’s called synthetic long.
If you want to increase your investing toolset and invest like a Pro, I would highly recommend the service. It’s probably the best service TMF has got. Remember though that it’s best to initially follow the recommendations to the T. They have an extremely high success rate so I suggest learning and honing your optiins skills for a year or two by closely following the service before trying things on your own.
Anirban.
5 Likes
I too am considering MFO. I have spoken to a couple of current and former subscribers. Here’s one opinion that I received today:
"…I am no longer a subscriber, but I would encourage you to think of it as a college course. Options investing is very tricky to learn - there are concrete technical issues to understand and master - and I think a year long walk through is a great way to do so. I think it’s a very reasonable price if you are planning to go and invest $25-50k or more in options over the next year or two. If you would invest less than $25K on options trades, your might ask yourself if you would spend the price of the annual subscription on a college course that interested you. With regard to performance, they are pretty transparent with their ROI (though they don’t include trading costs)…”
I also asked why he was no longer a subscriber. He said, “…Largely because that one year served its purpose as a training course. I traded options heavily for about 18 months on my own thereafter - made a lot, lost much of the gains - learning the whole time; nothing like having your own money on the line. Options investing requires time & attention (due to the constant march of time decay) even when investing in LEAPs and longer-decay options, and my career was getting more demanding so I stopped spending attention there. I’ll likely get back to it, and would invest in the newsletter again when my annual options trading volume is high enough to keep the subscription fee underneath about 1% of my trading volume…"
The price of the subscription gave me pause. I don’t typically spend that kind of money on such services. I’m starting to get over the sticker shock a bit, and while I haven’t pulled the trigger yet, the comments on this thread and the commentary that I’ve attached here have me seriously considering this.
David
1 Like
Thanks for all the great feedback. I’m very comfortable with the RB and SA, but I’m not sure I’m ready (yet) for options. At least not at the level to make the subscription worth the cost (again- yet).
Bob:
I’ll second what Neil says about both MF Options and PRO. I have been using options successfully for about 10 years, first learned at the feet of Jeff Fischer who is currently the lead Analyst at both MFO and PRO. I can say une
Bob:
I’ll second what Neil says about both MF Options and PRO. I have been using options successfully for about 10 years, first learned at the feet of Jeff Fischer who is currently the lead Analyst at both MFO and PRO. I can say unequivocally that use of options has boosted my investment returns significantly over that time, and I can’t imagine investing now without the use of options as an adjunct.
I post about my performance over on the SA Options board:
http://discussion.fool.com/1081/i-just-discovered-last-night-whe…
http://discussion.fool.com/1081/my-ytd-performance-through-831-3…
John
3 Likes
rh:
If you are not ready to pay for MF Options, but want to follow along vicariously there are a number of us who post about our trades over on the SA Options board, mostly written puts. You won’t get any of the detailed valuation analysis that you get from MFO, but it will give you a sense of what works (and what doesn’t!).
I have two portfolios that I track here:
- my actual trades (no dollar amounts):
http://discussion.fool.com/1081/jsergeants-2014-option-trades-31…
- and a $1 million paper portfolio here:
http://discussion.fool.com/1081/official-launch-of-the-sa-put-an…
mday1 tracks his options trades here:
http://discussion.fool.com/1081/mdays-2014-options-transactions-…
gameguru tracks his options trades on his own board:
http://discussion.fool.com/august-2014-option-expirations-313731…
as well as posting them on the SA Options board.
The SA Options board may be the second best one after Saul’s!
John
7 Likes
mday1 tracks his options trades here:
http://discussion.fool.com/1081/mdays-2014-options-transactions-…
and here for Rule Breakers recommendations:
http://discussion.fool.com/1069/mdays-2014-options-transactions-…
Lately, most of my options trades have been Rule Breakers. (Though my put writing is much less now, as my portfolio has become more balanced, and I have far less AAPL to sell if assigned on written puts. I’m trying to let my leverage gradually bleed away as options expire.)
-Mark
The price of the subscription gave me pause. I don’t typically spend that kind of money on such services. I’m starting to get over the sticker shock a bit, and while I haven’t pulled the trigger yet, the comments on this thread and the commentary that I’ve attached here have me seriously considering this.
Hi David,
I echo what Anirban said and I’ll add my .01 cent worth:
I would not invest in the stock market without a knowledge and use of options (which I have gained from the best, MFO and MF Pro). The flexibility that it gives you in almost any market situation, (if used judiciously and intelligently as an investor, not a gambler) is not only fascinating, but so far (1 year+), very profitable.
Plus I am quite sure it is helping me stave off Alzheimer’s which is one of the reasons I forced myself to learn the mathematics of it (I have an inordinate dislike of mathematics).
I will also make a projection: more and more people will learn and use options and getting in now is the ground floor.
Options, m’boy, options.
Mykie
PS one of the reasons I didn’t mind paying the subscription fee
was because I wanted to use and profit from options while I learned. I tried to just study it with no money but NOTHING took. You’ll earn that fee back toute suite and without undue risk.
1 Like
Mykei;
Welcome back and thank you for the email. I used option many years ago for some simple calls. And have not touched it since. Now I’d like to get back to it. How do you suggest I start? Do you have a book to recommend?
Regards.
-M