I am leaving this service after three years of membership.
I am leaving this service. After exactly three years of membership I am calling it quits.
18th of March, 2017.
I am leaving this service because I hardly follow their trades anymore. When I started out with them I followed some 30% of the trades (read my earlier review) and gradually increased that to following about all of them. Just by sheer luck I managed to avoid the large losses this service has experienced in 2016 (see below). By the end of 2016 I noticed that I was able to outperform this services trades by creating my own entry and exit criteria. I guess you could say I learned from them (him?) and am now ready to move on. MWTT, thanks for that. The trading style and trade allocation parameters of MWTT have diverged too much from my own style and are a lot riskier indeed. They are a tad above my risk toleration and money management wishes.
I will try to be as objective as possible, although some personal opinions have slipped in between the lines. It is not my intention to insult anyone, but here is my new review of the service:
Option Scalper basically gives you the following:
1) every 2 weeks or so they send out a market analysis. It is ok, but does not really contain insights that are not available for free elsewhere on the net. But it is off course convenient to get them presented in you inbox without having to look for them yourself.
2) Almost every week you will get a trade alert. Sometimes 2 alerts in a single week. Option Scalper exclusively trades selling credit preads
on the SPY and they advise you to allocate half your portfolios capital to each trade. On Monday or Tuesday they will send out an alert to sell either a put or a call credit spread.
3) Good customer service: I contacted them a few times and got prompt and correct responses.
4) A few times a year you will receive an unsolicited insultive email. Apparently every once in a while some members start complaining after a trade went downhill. MWTT then will send out an email to all members (also the ones who did not complain) with
insultive language as to why the members should not complain. Basically in MWTT's opinion it is all sort of the members own fault and they (the members) should not follow the advice of the service so blindly. In said emails MWTT bluntly contradict some statements present on their website about allocation, losses and the not wiping out months of gains with a single trade. Never mind. If you are into a little humor this service might be for you.
The results you can expect to get:
2011 to 2015 have been very good, but... 2016 Has been a disaster zone for the service. There were some heavy losses at the start of the year and then another one near the end, leaving the service's portfolio down 40% for the year. The largest loser was a 150% loser because they failed to get out of the trade fast enough before SPY went ex-dividend. Some of the other trades wiped out around 50% of the capital. The website still claims they never had a losing year, do not wipe out months of gains with a single trade and never had a loss of more that 15% on any trade. Probably they were so flabbergasted (pun intended, Lucas ;-) ) by the losses that they forgot to remove the 15% claim from the site's FAQ (at the "How much can I lose?"-question).
Although the yearly result for 2016 for their other service (Time Bandit) is shown prominently in the sites banners (2.9%), they keep the overall results of Option Scalper for 2016 hidden from the landing pages graphs and only show 2011 up until 2015 in a flashy manner. It is of course not a good sales argument to put heavy loses in plain view. That could be telling regarding the transparency of the service. Agreed, if you scroll down a bit on the site there indeed is a spreadsheet with all 2016 and 2017 trades and results in plain view. So ultimately there is transparency, although a bit hidden when it concerns losing trades or years.
2017 Has starded of pretty bad as well. A single losing trade caused the total portfolio to be down 42% for the year. They will need it
to increase by 72% in value during the next 9.5 months in order to just break even for the year. Bottle of wine that 2017 will be a down year as well. Maybe scale down a bit on de bear call spreads?
Analysing the losers one can easily see that:
Almost all of the losing trades were bear call spreads. My experience is that selling call spreads is a totally different game than selling
put spreads. Due to falling volatility call spreads are very hard to adjust when they go awry. Personally I only enter call spreads with half-sized positions and just cut my losses early, instead of trying to adjust. And of course, failing to notice ex-dividend dates is a biginner's error one would not expect from a professional service. Put spreads on the other hand are a lot easier to adjust, partly due to raising volatility. Basically "adjusting a trade" for this service means: rolling the trade to further OTM strikes and often to the next week. In the
three years I was a member there have not been any no other adjustments/protections at all. Hedging does not seem to
be part of this service's dictionary.
For the record: 2015 and 2016 were good years for me. By loosely following MWTTs trades and by one occasion of sheer luck
I made good returns on my portfolio. I learned early not to follow the call spread alerts. Unfortunately I did follow a BCS alert a few weeks ago and... did get burned seriously. That basically was the last nudge I needed to call it a day.
By the way, the service is cheap, so that also played part in me staying so long.
I wish them all the luck and thank them for three years of trade alerts.
This review is the subjective opinion of an Investimonials.com member and not of Investimonials LLC.