CREE Option Trade
Option Trading: I got this email today asking for a trade:
“Allen,Would you consider offering me ONE BEST OPTION STRATEGY IDEA regarding CREE ? I suppose some form of spread is what I am thinking of.If you provide one ‘reasonably good results’ strategy , protecting principal, then I will sign up with you.Thanks for any consideration.”
“Thats not how we work.
but you want a trade, ok
sell the July 60/57.5 put spread
17 days to expiration cree looks strong so you should be safe. make about 7.7%.
but if this does not work, dont come to me saying i lost you money.
entering a trade is easy. managing trades is what separates the men from the boys.”
Option Trading Insights
Did I respond properly? Or did I do him a disservice? Please let me in the comments how I should respond to other requests like this in the future because I am truly at a loss.
DISCLAIMER: I am not giving you investment advice. Do NOT place the above trade unless you accept full responsibility for your actions. I will not be placing this trade myself, nor will I monitor it or post adjustments to the blog. I do not follow this stock and an not familiar with the way it moves. Proceed at your own risk.
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As to the ‘pick’….you gave him a gift. Great up trend and should be good for at least a weekly trade. If I’m not mistaken, you’re already giving free ‘non-auto trade’ picks, so he’s got some nerve for asking. Very generous for you to accommodate him. Looks like a good trade.
I don’t think his request is that unreasonable. Many sites will offer the 1st month free to lure in customers and to expose the customer to the rather intangible product. It is a product that has to be experienced to be appreciated.
However, your monthly fee is not excessive and a trader should be able to afford it. And you do offer a full refund within the first 30 day period. This is not well publicized and if it was better advertised, the request for a sample trade might not have been necessary.
Perhaps that is the problem, we need to place the guarantee in a more prominent place on the site. Thanks for the tip!
ON CREE I HAVE BEEN SELLING PUTS FOR OVER A YEAR IT WAS PUT TO ME @$30.AND SOLDC ALLS 49 AND WAS TAKEN AWAY WITH A NICE PROFIT
Alan I don’t know what you got upset about .this is a not like
going to the dentist. there’s umpteen million people out there trying to sell their wares on the Internet and a big percentage of them are scams. I don’t like to do anything that doesn’t have a guarantee behind it on the Internet either. I don’t think that he was out of line to ask you that.
Actually, that doesn’t seem very conservative to me. The way I read it, there’s about a 28% prob this will loose. That being the case, how you adjust is pretty important. From the rest of your comments I am assuming you focus quite a bit on adjustments?? Or do you generally make more conservative choices?
Never said it was conservative. Since I dont know this stock, the trade I gave him could be super duper risky. I have no idea. A smarter thing for him would be to ask someone who already trades CREE.
Your response was great. How come you did not direct him to your auto trade record. As I am extreemly pleased with
what you have done for me since I joined in April.
No, Allen, to respectfully answer your question, I don’t think you responded properly to this — your high dudgeon and great sense of offense at this reader’s request are misplaced. Dentists are licensed, whereas the world of stock advice abounds with con men, charlatans and people who simply can’t deliver on their claims; in fact these make up the vast majority of stock advisers. (Surely you already know this!) Not saying that you’re one of these, but how are we supposed to know? Your reader is saying, “Show me some evidence that you’re for real before I pony up my hard-earned money,” and he’s even promising outright to subscribe if you do that. You could have declined his proposal without getting (your term) “ticked off.”
He was asking for, in effect, a “free sample” of your advice to help him decide whether to pay for it, and while dentists may not give free samples, plenty of other types of businesses do. In fact, I’m writing this from a restaurant that just gave me a free sample of a drink they’re promoting!
I’m not saying that this person wasn’t being somewhat “forward” with his request, but it was less out of line than your indignant response. His request was politely worded, while your response was angry and brusque.
I am selling a service, not a product. My service requires my time which I have a limited amount of.
The business offering you a sample drink chose to give you a drink. You did not go to them and ask for a sample sandwich. If you did, they would say no.
I am also a business owner who sells products and have been so for many years. I see nothing wrong with a “try before you buy” request. We have always sold our products with a 30 day money back “no questions asked” return policy as well as a one year product warranty. I see it as no different than test driving a car before you buy it after the salesman has told you “it gets 30 MPG”, “rides like a dream”, “is as good as a Mercedes”, etc.
And in the case of a product such as yours ( option trading course – information only ), It should not cost you a penny to let potential customers try it out to verify that it can and will perform and make money as promised? — After all, they are only asking to verify that what they are buying actually works and will make them money – at least the subscription fees.
And it will not hurt any future trades you or any of your current customers / members might trade? – As you know, there are thousands of great trades that will always be available to those who know where to find them ( From YOU – The Option Genius — They’ll NEED to and probably WANT to keep coming back over and over if they’re making money from your suggested trades!! )
I would go as far as to suggest that IF you actually made this a part of your marketing plan , you MAY even get many more customers and greatly enhance your sales???!!! -After all, you are not “giving away the farm” and it is your brain, smarts , experience, knowledge and expertise that you are actually selling, not a particular, expendable item??!! — And you would still retain all of that after you “gave away” a trade or two??? — And only a FOOL customer would not come back for “more of the same” IF they seen that it actually made them money!!
Another marketing idea might be to send potential new customers a “gentleman’s agreement” ( maybe even non-binding?) that says something like this … ” You agree that if you make money on the trade that I send you for FREE, you will apply ( 50%, 60%, 70%, etc.?) of those earnings towards a one year subscription to the Option Genius subscription — This percent will continue until your one year subscription is paid in full -at which time you will owe no more fees to Option Genius, etc.” — Of course the percentages, etc. can be changed to fit your exact requirements? — And, of course this would be easily verifiable by you and the customer just by watching the trade results assuming they followed your exact entry and exit time and price per your instructions.
The worst that could happen is some dishonest person “stiffing you” by not sending in the amount agreed upon after they’ve made their profit — But of course you wouldn’t actually lose any money, just be upset? — I’ve personally found that MOST people are indeed honest, but there are always a few jerks out there too!
Just a thought to try ?………… And you could always go BACK to the method you are currently using without any major or permanent losses if you decide this wasn’t working out as planned??
We do have a 30 day money back guarantee.
I think 30 days is enough for someone to check out the site, see how we execute trades and alerts and see if this is something you want more of.
I also post free trades on the blog from time to time.
Where this gets tricky is if someone follows the trade, loses money and then complains to the SEC that I gave him bad advice.
When someone signs up on my site, they have to agree beforehand that they understand that any risk is theirs and I am not giving advice just showing what I am doing. They are free to follow along if they wish.
You probably should not have offered him anything. If he makes the trade he is either stupid or a smart options trader who was playing you.
Please clarify terminology. A July 60/57.5 put spread is to sell the July 60 Put and Buy the 57.5 Put to limit downside risk. Is that correct? Is this a bear Put spread?
Unnamed is like a whole bunch of liberals who want a lot something for nothing. He doesn’t want to accept responsibility to present some research with his question and ask for your opinion. He is, in a sense, threatening you to give him winning advice or he won’t sign up. He is a taker and I don’t think his request warrants an answer. Save your time and knowledge for the many deserving, struggling traders who really appreciate what you do for them.
Ah, yes — leave it to a right-winger to inject a political rant into this entirely nonpolitical discussion! Actually, you have no idea of this person’s politics. I’d say it’s a 50-50 chance as to whether he’s liberal or conservative. Or he could of course be “middle of the road.”
Trust you are well!
Since you ask, for your personal consideration – without offence, without prejudice:
Coincidentally, I made a similar request more than a yr back. I suggested a 30 day free subscription or similar proof of performance. If your service worked as you assure, I would subscribe. You did not respond at all. Seems you have now improved your PR!
Fact is there are many like you offering similar service with similar gains. The problem for potential subscribers is – whom to chose? Hit and trial costs us a lot – not only subscr but mainly actual losses in trades gone awry.
Using your dental analogy – tooth cleaning is too superficial, let’s take root canal instead. Many dentists offer root canal at similar price. But their results or allied services or post op support are not always similar.
So I go to a dentist and make him this offer:
Option 1 – Do the root canal. If completed successfully I pay you. If not, I will not pay and we are quits.
Option 2 – I agree to pay you in advance for the root canal. If completed successfully good; if not, I will sue you for all I can.
Which option would a dentist prefer? Which option has lower risk for both?
Now, Allen, your dentist analogy is not like-to-like because I do not have the option to sue any investment service provider such as you for loss in trades he recommends. If I had, then surely I would have no problem in paying upfront.
The bottom line is –
[a] Many potential subscribers are not confident or believe in your clan because of previous experiences in similar deals. It is for you to generate the confidence. You decide how best.
[b] More important, how confident are you in your work? If you are very confident, you should have no problem in offering a free trial or special deals, knowing the outcome will be postive and you will end up increasing your footprint.
Final input: Say you offer a freebie that nets the potential subsciber $500. Out of decency and gratitude he recycles it into a subscription with you. Who has won? Who is richer? (Always a possibility that a small percentage of them may take the profit and run but the majority will stay back, I think. You too may think about it objectively and let me know!
We used to offer a $1 trial subscription. What we found was that we attracted a lot of fools who only were interested in making 100% a year. If we had a losing month they would cancel in droves.
We also found that we attracted people with no money and who only wanted something for free. Most would cancel within the first month after asking us many, many questions (which takes up staff time), asking us to explain concepts that are already explained on the site (they would not bother looking), and more.
We also had a large amount of people who would not cancel in the first month and who were then billed for a second month. Some of these would email and complain that we charged them without their authorization (totally untrue). Some would not bother to contact us but would call their credit card company and say we were trying to defraud them. This would result in a chargeback against us. So not only does the charge get refunded, but we get charged extra money from our bank, our account with them looks bad, and they charge us higher fees to process credit cards because we become a “high risk” merchant because of the chargebacks.
We still do from time to time offer a $1 one month trial. And we have the same issues. Sure a lot of people sign up, but most are gone soon after.
Which is fine. If you don’t like the service, no big deal. But don’t screw me, call me a liar, and waste my time if you don’t intend to stick anyway.
When we changed from a $1 one month trial to a Money Back Guarantee, we had less people sign up, but we got a much higher class of member. People who actually understood what they were signing up for. They bothered to read the website (what a concept), they understood the risks, they are more respectful of my staff in the way they talk to us, and more.
So yes, if you want to sign up – do so. You have no risk. If you dont like it, tell us and we will refund your money. What we offer is not for everyone. Heck it is not for most people. But making people pay upfront makes sure that only people who are sincere sign up in the first place.
I am sorry to say that, Allen, but I do not consider yours a proper response. To explain why I think so, let me take your dentist analogy one step further. I go to a dentist and say “you do one filling and I see if I like it”. Even if the dentist wants my business badly he might examine my teeth and conclude that I do not need any fillings at this time. I think this is the case with CREE. Why would one want to establish a position today? If you suggest any trade it means you confirm that this stock meets one of your very specific setups. To me it looks like it is a forced trade. The guy did manage to tick you off.
Don’t yield to control freaks. He doesn’t want what you have, he wants you to justify what he has. Impression: it will all be uphill from now on and it invites same-ilk personalities. Do what YOU want to do, you cannot please all the NUTS out there. Spend your stomach acid trying to please the ones that join YOUR plan. ab
I think that you did the inquirer a disservice. You correct response was the first and last lines, with further explanation as to why you cannot just dump a trade out on demand.
The question that you were asked was asinine, and by actually giving him a trade on a stock that you do not monitor or study, he is going to get even worse ideas on how to trade. Trading is not about getting tips from experts: it is about knowing what to do, and when, especially how to protect capital.
Just my $0.02.
A silly request by him, but you should remember you are dealing with traders that are, for the most part, unsophisticated to some degree. What you are doing may be second nature to you but to the average trader it is rather difficult to understand. For example, I am getting a little uncomfortable with CMG. It’s trading around 380 as you know. I’m sure you would indicate doing something if you felt it was necessary but with 20 points to strike there is time for it to reach it the way it’s going. Looking forward to whatever the next trade will be.
I don’t blame you for being a “little ticked off” at this request. Actually, I would be a bit surprised if this did not happen more frequently.
Next request: how about a discount for a two week subscription?
I would not have replied.
Hi again Allen,
Do you have your Auto-Trade results posted anywhere on your website?
If not, can you send me a copy of the Auto-Trade results
for the past year or two?
I think that would be extremely helpful for those of us sitting on the sidelines wondering if your results are as good as advertised?
Everyone realizes that there will be losses along the way, but would like to be assured that the long term averages have been profitable.
Like I said in a previous post – ” If there is indeed profit to be made ( and your trading record shows that ),
I think a whole lot more people would be signing up?”.
After all, everyone wants to make money and will jump in IF there’s a reasonable chance of success!!
Not a guarantee — Just a reasonable chance as verified by a historical trading record.
The month to month results are posted in the members area.
We used to post this for anyone to see, but again we were attracting the wrong type of member so we moved it inside. This has resulted in fewer members, but they are of a higher quality – meaning they stay longer, want to learn, understand that losses are part of the game, and ask intelligent questions.
I learn a lot from members. Answering their questions keeps me on my toes and some are excellent traders themselves so they teach me as well. I then try to pass that along to others.
No, I don’t think that was an unreasonable request. Your reaction was!
The guy must be like me (and hundreds of me) bombarded with claims of amazing ‘track records’! Unlike him though, I did sign up for $79.The guy’s polite and smart but ‘woe’ is me.
Got convinced with all those materials I read and watched coming from you. Exactly the direction that I wanted to go plus somehow I sensed there was an element of honesty. But after almost a month of paper trading, I had to cancel the auto renewal as quickly as I could. Couldn’t help but that eerie, sickening feeling I experienced with other sites started to CREEp in.
I think the proper response would have been I don’t give advice on any particular stock or option. I teach people position and risk management strategies.
Perhaps CREE didn’t meet your personal trading criteria, perhaps you didn’t like the risk parameters. He’s in essence wanting a forced trade for free. I’ve used your service for along time now and what you do is provide excellent advice on trade management when something goes ary. Anyone can put on a trade, not everyone can manage a trade. What happens if CREE stays above 60? He made money on the most basic of spreads. Does he join? Now what happens if CREE drops below 60? Are you supposed to start giving me free adjustment advice? You wouldn’t have enough hrs in a day! I think the 30 day money back guarantee is plenty for anyone who is serious in trading. You have plenty of info in your pay section that they can disect for a full month. I trade full time as well and my time has a lot of value! I’m not giving it away, no matter how much that upsets someone. My opinion, he wouldn’t join anyway.
That’s my .02! Keep doing what you’re doing.