Description
Recommends options spread trades, one per month.
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I posted a very positive review on Dec 23, 2009. Yes, just like the many other AutoTrader subscribers, I did experience a 26% capital loss on the March-dated option spread.
Anyone who invests is accepting a level of risk, and even keeping money in a bank account can be a risk in these times. To control my risk for my total portfolio, I practice position limits and stop losses. My position limit with Wicked Profits is that I have only a set percentage of my investment capital allocated to this service; stop loss limits are automatic with this service through AutoTrading.
The historical track record as posted by “Kim” in the Nov 10, 2009 review above (very first posting) is bona fide (with an updated +37% performance for the full year 2009). Of course there are some risks in achieving that level of performance consistently over the last decade, and we just saw the risk this last month. I would certainly be discouraged, in fact very discouraged, if I were a recent subscriber and suffered a 26% loss. Everyone should know that there will be losing months; that is part of the “price” of what I view as consistent positive long-term performance from this service. My personal performance was pretty poor in 2008, but I am still in the game.
A couple of posts above suggested that the service should have closed all trades on the last Thursday (before the official option expiration at the Friday opening) since the spread was so close to the short position strike price. I believe that is something the editor should consider and then make that part of the AutoTrading plan.
My rating today would still be 5 stars in each category, except maybe 4 stars for consistency.
I subscribed for three years and recently switched to another system that I ran in parallel for the past year. Reason for dropping wicked profits was that on the day the SPX trade in March settled, my subscription was cut off. Even though I had a yearly subscription, my access rights ended not at the end of the expiration period, but one day earlier. My email was lost and it was about getting out or staying in, I could have gotten out with a 10% loss but since I had no reply I assumed I should wait for settlement the next morning – well the 10% loss magnified to -29 1/2% which wiped out about a year of gains in one day!
My new service which I ran in parallel for a year, will sell out early if deemed necessary.
Also, Wicked Profits was generating $70,000,000 in option spreads each month which made it difficult to fill the orders thus having to accept a lower credit than a smaller service.
Yes, they won for 5 years before losing, BUT, those were with smaller, more manageable volumes of trades.
Although I no longer subscribe to Wicked Profits after the February debacle, I know others who have. Since then “Brandon” has had multiple winning trades, but his credit spreads for these trades are tiny — like 30 cents. Given the poor risk/reward ratio of his bull and bear put/call spreads, beware small-time investor — you can lose 20 to 50% of your capital if the trade goes bad! You’ll also need a cast iron stomach to endure some of the drawdowns he’s had on his last few trades.
The worst investing (i.e. gambling) mistake I ever made was to do a trade recommended by Wicked Profits. It was my first and only options trade. This was the trade in March that many other reviewers suffered through and have reported here (but it’s only now, in late October, that i can stand to revisit this event long enough to report on it). At the time, and based on their reported steady successes, I put in way more $ than I should have and lost a very large amount. This trade shouldn’t even have been recommended imo because there were only a few days left before expiration. Yes, it could have been even worse if he hadn’t placed a stop-loss.
Wicked P seems like a good guy (forget his lousy grammar that made me cringe and probably should have warned me to stay away–unlike our erudite Gumshoe!) and he was helpful in answering my questions. But the upside potential is very small in relation to the downside risks, which are enormous. Plus, there is major cheating in the markets that can (and did) sabotage the trade at the last minute. It was a disaster. The whole basis is way too risky! Stay away!
As to reviewer “Kim”, I would say that is definitely not the same person as Wicked P because their writing styles are completely different. Kim writes well and Wicked P does not, to say the least. (If his recommendation had made $$$, I’d forgive him for that, but since I’m still hurting, and I really feel he led us into a mine field with seriously insufficient time to get out safely, i won’t try to be polite).
Hi,
I’ve been a subscriber to WP for many years and I confirm the performance that is posted on the website.
I agree with other posters that for a while now he has been going for credits that are too small.
I was out of the February 2010 trade that went sour on expiration day. I had been tracking the index on Thursday and found it too close for comfort so I exited the position myself.
Too be honest, I thought it was a HUGE mistake by Brandon to leave that trade open on Friday (when your stop loss doesn’t work anymore). Settlement can be awful if it goes against you! It often is at a worse price than the market is for the entire day. A
It is my opinion that the way settlement is calculated (first trade for each component of the index), is faulty. It leaves the door open for manipulation by big players. I am convinced that this is done on a regular basis. I have often seen a quick boost at the opening on Friday after which the indexes immediately reverse. The settlement value will then even be significantly higher than the index ever was. So, ALWAYS close your short position if the index is close to your exercise price on Thursday. Failing to do so might even cost you more than the 21% loss.
I believe Brandon has learnt that lesson and has adapted his exit strategy. He already closed a trade on a Wednesday (for a very small loss) which, with hindsight, he shouldn’t have. You won’t believe me, but I also sidestepped that one 😉
I have subscribed for about 2 years, and find that they deliver as advertised. Their reported performance is true and fantastic.
The reason for my leaving was the low reward to risk ratio. The only thing I can ask is that Brandon provide more info and impact of drawdown…
To give you some background about myself, I have been trading for about 10 years now. I was a near-day-trader for about 2 years and have subscribed to over 20 stock/option services and have trial-tested just about all the ones out there. I can say with certainly that only about 1% of them don’t manipulate their numbers and Wicked Profits is one of them.
I have been a continuous subscriber of Wicked Profits since May 2003. As they say, numbers don’t lie – and in this case, they *really* don’t lie – I personally vouch for these numbers (since I have had real money involved in all of the trades):
2010 -7.68%
2009 37.46%
2008 36.58%
2007 48.00%
2006 55.78%
2005 48.03%
2004 26.83%
2003 31.07%
As we all know, in the stock market there *are* going to be losses. The question is how to manage those losses and make them small enough so they don’t wipe the gains. Wicked Profits (as the numbers prove) manage losses very well. As you can see, only one year (2010) had any loss.
Besides the numbers, what really attracts me to this service is that the owner values integrity very highly and goes out of his way to adhere to it. There are times when the market are erratic and there are no recommendations for that month – in that case, the subscriber fee is waived – which other service does that? I don’t know of any other.
I hope this review pushes the people on the fence to the “membership side” because I personally have made tons of money with this service and I continuously try give back to the service.
This advisory recommends selling one bear call or bull put spread on an index like RUT or SPX each month. These are far out of the money spreads and almost always they expire worthless (since you’re selling them short, that’s what you want). The problem is that the risk/reward is frightening. Typically the spreads sell for $30 and have a worst case loss of $1000. So if you want to make $1200 in a month you have to risk $40,000. The stopping rule is to buy back the spread if the short strike is reached — typically that means that you’ll lose a quarter to a third of your capital when a stop occurs. If you decide to use tighter stops yourself (say, buy back the spread if it becomes worth 3 times what you sold it for) you’ll find yourself stopping out of many trades that ultimately would have won. Finally, there is the gap risk — the last trading day for the options is on the Thursday before the third Friday of the month, but the expiration value of the options is determined at the Friday opening. So a large move in the wrong direction on the Friday open can turn a just out-of-the-money spread into a well in-the-money spread, causing a big loss. (That was what happened for the February 2010 trade — people lost over 20% of their money overnight.)
In short, this is not an advisory for people who have to watch their blood pressure. You can make steady gains for a year or more and then have it all wiped out in a single trade.
The most recent (March 2011) trade exemplifies the issues I mentioned in the previous post. The recommendation was to sell the April RUT 865/875 bear call spread. The spreads were sold for 0.40 ($40 per contract) risking $1000 per spread. Supposed you sold 40 of these. You would receive $1600 up front. The RUT spiked up a couple of days after the sale and continued to march straight up for two weeks, reaching a peak of 859. At that time the spread was worth about 3.00, meaning that at that point you were *down* 40 * (300 – 40) = $10,400. Had the index gone up another 6 points you would have hit the stop and would have bought back the spread for about 3.50 or so, incurring a loss of over $12,000. As it happens that was the peak, a few days later the RUT was heading down and at expiration was about 828. So you would have made your $1600. But not without a lot of heart palpitations in between.
I am reading about a lot of people wanking that their first trade was a losing one. Well you know what, my first trade lost as well and then I rode that 61 month train to major profits.
I have been with Brandon since 2005 and have been very happy with the service. I have many friends and family members that have also joined and taken advantage of the profits.
At one time I was trading 100K per month on this system before I decided to cut back and diversify into several other strategies.
His system and website have evolved nicely over the years and he prides himself on good customer service. I have learned a lot about options and credit spreads during this time. I mainly use the autotrading service unless I feel another setup would work better. I usually bail on the five week or early four week trades and get in a week later than the official time. This helps to relieve some of the stress and can actually get you a higher net credit to help recover from any possible losses.
In the early days we easily got 50 cent credits and it seemed like the market just always moved the way we needed it to. The last two years have been more difficult. The higher credits are forcing too much risk taking and thankfully Brandon is more concerned with capital preservation than pushing a bad situation to get paid. His performance numbers are spot on and supported by my own statements from OX. Even 2010 was a profitable year for me because of certain manipulations I did to make extra on each trade.
If you get into the service and want to educate yourself you should do just fine. The autotrade service has been great because I am an airline pilot and cant be at the computer during critical times.
Best of Luck
JC
Looks like they took a nasty hit in July and lost over 50%! No trade results on the site since then and the latest comment refers to an October cycle that hasn’t expired yet.
Someone said that they’ve evolved nicely over the years… looks like from a 5% gain to a 50% loss. Not the type of evolution I’m looking for.
For those of you that put them on a pedestal, are they still doing business? Are you still trading with them?
From what I heard this site and its service will be shut down for good at the end of the year.
Wicked Profits’ web site hasn’t been updated in many months, I’d say they are indeed dead. Well, look at my earlier reviews and you can’t say I didn’t warn you. Earning 3% in a month with a credit spread is not the same thing as earning 3% a year in a bank’s money market account. In the latter case you can put in $100,000 and be confident of having $103,000 at the end of the year. In the former case if you are crazy enough to use all $100,000 as margin in a credit spread trade you will most of the time have $103,000 at the end of the month but every few years you’ll find that at the end of the month you have $50,000 or less — possibly $0. Far OTM credit spread strategies have extremely high variance.
I trade credit spreads myself, but I do them in small size and stop out quickly if they start to go wrong. It’s not a magic route to making money and these are certainly not the sort of trades where you can set it and forget it.