We asked CHOICE readers to tell us about their experiences with trading options or attending seminars. Here are some of your comments.
It takes more than 20 minutes per day
"I attended an options seminar in 2002 and, while I thoroughly enjoyed the program and felt I learnt a lot, I believe that the instructors give a false impression in relation to both the amount of time and effort required to trade properly. It was stated during the seminar that, provided we put alerts and stops on our buys, we would need to spend no more than 20 minutes per day to trade successfully. However, I do not believe this to be true and feel, particularly if you are working in a full time position, that it is simply not possible to monitor your trades effectively enough to be successful." Fran
Strategy failed when share markets crashed
"I have attended all of the courses that Optionetics offer and found them to be quite well structured and generally conducted by top quality instructors/traders. I also purchased several of their software offers, although I do not currently use them as I have found a Broker who offers more than I need for my trading.
"I do not subscribe to their low stress/high profit trades as I believe that their main failing is in not what they say but rather what they do not say. They tend to teach more about how to use the software rather than the nuances of trading.
"I was making money using the Optionetics strategies, but got caught out in the October crash last year. The strategy I was using at the time was one recommended by Optionetics and was bound to come unstuck in a major fall like was experienced with the collapse of the financial sector.
"I do not regret purchasing the software nor do I regret attending the courses, both in Australia and the US as I do not believe I would be where I am currently if I had not gone down that road. This is my story and may not be the case for another student. I have since found another trading educator who offers much better value for your money as their publications are much less expensive, better presented, lacks the American hype of Optionetics and deals with the nuances in detail, which I believe is needed if one is to make money in the trading game. I have been far more successful using the education from the new company. My main losses have been through my lack of discipline rather than their education.
"Would I advise a newcomer to attend their courses? Well that would depend on the person. If they wanted to be spoon fed then I might, if they are the type who are prepared to roll up their sleeves and be serious then I believe I would steer them in a different direction and save them multi thousands of dollars. This type of person would not need the software."- [Name withheld to protect identity]
High returns mean high risks
"I trade options and have attended a few of the free "teaser" seminars that aim to encourage people to pay for the full versions. I know people who have attended some of the paid courses, but do not consider they have really benefited. It is difficult to tell with some of these however. I have undertaken a course in futures trading offered by a different company, and was very disappointed. As part of this, I accessed the live "trading room" while trading S&P futures. This did not meet my expectations most of the time.
"I have traded options successfully, which means on average I make money. Not every trade is successful or optimal either. The approach I am currently using will deliver approx 25-30% per annum on funds employed. Making 1.5 to 3% per month does not grab the excitement headlines, or many people's attention. The advertising material I have seen indicates much higher returns than this are achievable in every trade. This does take a fair amount of work, and has a high level of risk.
"Liquidity is the main 'problem' in the Australian options market. This can therefore have significant effects on options trading. It is easy to get into a position and then not be able to get back out of it. The Market Makers are also able to "play" individual options traders/investors as they are easy to identify. This can make entry/exit more costly as they can increase the spread significantly, assuming they even want to get involved. Most trades are made with Market Makers rather than other traders.
"A good measure of how good the courses actually are, is how many people who attend actually make money. I imagine the course providers do not actually collect such information, even though success would be a very good marketing tool. From what I have seen, people blame themselves for not getting it right when they lose money. Consequently there is a big focus on psychology, which can help perpetuate the feeling that the people trading are to blame for losses. Psychology is very important, but good psychology won't help you if you don't have a good trading plan, system or methodology.
"There are many different aspects to trading options, and many different things that affect the outcomes." - Nicholas
Selling the dream - and expensive seminars
"I have always been on the lookout for ways to increase and diversify my income stream - and in doing so have become very cautious in who I deal with after being bitten a few times (as you could imagine). I have been to numerous 'free seminars' by various spruikers over the years. Most of them were the 'Property Investing' seminars, and also the Optionetics seminar. They all work on the same principle - Offer a 'FREE' seminar where they basically sell the dream (Look at me, you can be like me too, all you have to do is follow some simple rules and look at the results) followed by presentations of the results and some very minimal 'examples'. Essentially, the whole 'Free' seminar is one big advertisement to sell the Product - which is their Classes and Software.
"I went to a Free Optionetics trading seminar approximately 5 years ago. Whilst I found some of the information of use, most of the seminar is designed to hype the person into buying the training package. One of my friends who attended the seminar with me, registered for the whole package, but was disappointed to find out (much later on) that Optionetics didn’t include software packages or nearly enough support. Most of the support that was provided was from other students. It was covered by the typical 100% money back satisfaction guarantee that a lot of these spruikers offer.
"I have since joined another group who ONLY advertise through word of mouth. The course is FAR cheaper, and in my opinion FAR better. The teachers are ACTIVE Traders who derive their primary source of income from their Trading as opposed to selling courses/software packages and on payroll from another company.
"The biggest problem I've found with a lot of these training companies that offer 'free' seminars is that the courses they spruik are expensive (probably to cover the HUGE cost of marketing that they must incur) and the content of the free seminar is purely a marketing vehicle to build hype for the product." - Paul