Description
Options trading service with daily suggested trades including buy and sell targets and suggested stop losses.
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River Oaks Capital Corporation
http://www.rocapco.com/
This is an options service that gives calls/put recommendations. Looking at their track record in the last 4 years, you see an average return per trade of 25-35%. They make 10-15 recommendations every month and average holding period is about 10 days. They suggest entry price, target and stop loss. They even offer the following money back guarantee:
“WE GUARANTEE that our option trade selections will provide opportunities for a total NET GAIN EACH and EVERY MONTH* of your active subscription period or we will REFUND 100% of your initial SUBSCRIPTION COST…
Looking at their track record, you can see that they calculate returns in the following way:
If the price hits the target, then the return is the difference between the entry price and the target price. If the target was not hit, the option at some point is stopped out. In this case, they calculate the return as the difference between the entry price and HIGHEST CLOSING price recorded at the closing bell during the ‘active’ holding period.
Achieving those gains requires perfect hindsight looking backward from the closing dates to the purchase dates. Promising money back guarantee based on those results is even more misleading and smells like a fraud. In fact, looking at their track record, you can see that only two options reached their target in 2010. I recalculated the 2010 performance based on the stop loss and instead of 24.36% average gain you get 8.17% average LOSS. In fact, when calculating performance this way, every single month in 2010 was a losing month.
Bottom line: performance numbers are a complete scam, and the real numbers show average loss in every single month.
The person who posted this negative article about River Oaks Capital Corporation is NOT a subscriber, has NEVER been a subscriber, and now never WILL be a subscriber to our service.
The accusations posted on this site are based on pure speculation and are not founded on actual experience. This person challenged us directly with a bombardment of pointed and negative e-mails over the course of a few weeks and obviously did not read our FAQ page, Track Record legend, or disclaimer page that clearly explains postings, figures, percentages, and gain/loss ranges in full detail. After responding to each and every question, concern, and/or accusation we then informed this individual that because of their virulent nature that we did not want this person to subscribe to our services now or at any time in the future.
We feel strongly that this individual is either working as a ‘shill’ for one of our competitors or is a failed trader who simply cannot grasp the fact that we are able to provide successful and profitable options trading opportunities to our subscribers far more often than not.
We are a chartered Texas corporation operating as a division of a larger chartered Texas holding company, have offered our services over the Internet continuously since 2005, have provided professional financial guidance since 1976, have a long-standing business affiliation with Google, Yahoo, and MSN and we stand by every word, result, profit, and trade posted on our website as being accurate and without ‘enhancement’. The profit opportunities and the gain/loss ranges posted on our Track Record are factual and complete.
However, because we do not invest, manage, control, or place trades for our subscribers or others, the decision to exit a trade at a specific price or percentage gain or loss, or even to initiate the trade in the first place, is always at the sole discretion of each subscriber regardless of where, when, or at what price we may trade the option. Individual results WILL vary.
The fact that you are in business since 1976 doesn’t prove anything. Madoff was in business for much longer.
Some services give only entry points and don’t provide any guidelines when to exit the trade. You pretend to provide such guidelines based on target and/or stop loss. So when you present your performance, you should base it on the target price (if hit) or stop loss price (if hit). For tracking purposes, this is the only way to calculate performance.
I actually went over FAQ page which says: “We use our EXITS and STOPS as trigger points for closing ‘open’ and ‘active’ positions if they are not closed by expiration”.
As an example, lets take one of the latest trades from your track record – JPM JUN 45 puts.
The entry price was 1.90. The target was 3.50, the stop loss 1.40 and the high of the option was 2.00. The target was not hit, so according to the exit policy, the option was sold at 1.40 (stop loss). This is 30% LOSS, but the track record shows 5.26% GAIN (based on the high of the option).
Your only response to my emails was “Each subscriber enters and exits positions according to his or her own guidelines. We provide Target EXITS and MAX STOPS to assist those who need parameters.” This is true in general, but if you do provide exit and stop targets, your track record should record the gains according to those targets and the exit policy specified on your own FAQ page. Instead, you calculate gains based on the option high value which is completely unachievable.
Kim,
It looks like you have done your homework. Is there other company you can recommand that looks right to you?
absolutely fraudulent. and yes i was a member for about 2 weeks until i realized that their performance was completely unachievable. From their FAQ and their nightly updates, it looks like they give precise instrcutions on when to buy, sell or set a stop. but they DO NOT tell you when to sell or anything. THey have no exit strategy, there is no way one can make returns like ones they tell you, because you cant guess the highs of an play ever. Stay away, there are much better services online like: Momentum Options and Options Intelligence
Debbie,
Email me at ak100467@yahoo.com and I will give you some info.
I was ready to pull the trigger on a subscription until I read the reviews in this forum. I took another look at the posted track record and sure enough, the “Change” value is based on the “high” price of the option, not the actual sell price which would presumably be either the “exit” price or the “stop” price. Nobody I know has the ability to sell an option at the exact high price.
I recalculated the 2010 results using the stop/exit price and it turns out that only 1 out of 72 trades actually hit the recommended “exit” price. All other trades hit the “stop”. Furthermore, only 30% of the trades closed for a profit and the average gain per trade was actually a loss of -6.84% … far from the posted gain of 24.72%. This is extremely misleading. Needless to say, I will not be subscribing to this service.
I looked at the Testimonials and could not find the 300% winning Citigroup trade anywhere on the list of trades. No phone number to verify it.
“my first trade was on Citigroup, it tripled my money.” Ibrahim M Flushing NY 7/28/2011
The advertisement made me checkout the webpage. Glad I have Stockgumshoe for my backup.
John