written by reader Stansberry Alpha newsletter

By gimpie317, January 30, 2013

Travis: Any thoughts on the new Alpha newsletter Stansberry’s coming out with? Cost is $1625/year for 12 option plays selling put options. Do you think their advice is worth that kind of money?

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radesrochers
Irregular
January 30, 2013 9:32 pm

Travis, I just received Stanberry’s ALPHA Strategy also. What is your opinion in general on the strategy of selling put options?

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Naquadah
Irregular
Naquadah
January 30, 2013 9:48 pm

Bottom line you have to be willing to buy the stock you are selling options on. So you have to have sufficient liquidity on hand or be willing to use a margin account.

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Ron
Member
Ron
January 31, 2013 3:13 pm
Reply to  Naquadah

I have been selling Puts and it does work. True you must be willing to buy the stock, but you can alsways roll it out to a later date and in most cases pick up additional premium. It also allows you to cover the exposure in your margin account at no cost until it is excercised. Nice to get a return on borrowed money that you are paying noting for.

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John Green
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John Green
February 13, 2013 3:22 pm
Reply to  Ron

Who is your broker? Broker’s generally do charge interest for margin money.

euclid
Member
January 31, 2013 7:33 pm

I haen’t done it but I think selling naked puts can be very profitable. You do not have to buy the underlying stock if the price drops. You; can simply close out the position with a generally small loss.

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John Green
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John Green
February 4, 2013 11:37 am

Stansberry & Associates already has Retirement Trader that specializes in selling puts. RT generally sells puts close to the money, which means you get a lot of premium but have a good chance of being put to the stock. That means that you should only sell cash secured puts (no margin). Which means that your annualized return will be about 20% of what they claim, since they love to state eye popping returns on margin. It is not clear whether Stansberry Alpha brings anything new to the table. And charging over $1600 for a put selling newsletter sounds pretty pricey to me.

Selling puts is no magic route to a fortune. If you want to juice your returns with margin ask yourself how well that would have worked out had you had a large position in short puts in July and August of 2008.

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John Green
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John Green
March 7, 2013 11:57 am

What Stansberry Alpha does is combine long calls and short puts. So the put sales finance all or part of the long calls, while at the same time creating a margin requirement. Of course if the stock goes the wrong way you can lose money on both the puts and the calls. Buyer beware.
Options are generally fairly priced — the “fair” value of an option is usually between the bid and ask. The real professionals in the options market are the market makers, and they make their money on the bid/ask spread — they hedge away all the delta risk and make no bets as to whether a stock will go up or down. To make money as a retail trader in options you must be significantly bett