I just wanted to point out some advantages to a managed account compared to just following the trades located within the newsletter.
First off, tracking the arbitraged pair trades, ad-hoc trades, and rolling delta trades is near impossible via any newsletter. Even following the fade trades is a little difficult, for you need to be on your toes when the exit price is hit.
The fade trades can be used in different combinations to further enhance gains, but there is no way I can list them in the newsletter in an accurate manor. For example, if we are fading an incline on AAPL, we would be purchasing Puts to create a synthetic stock short at reduced cost. When buying deep "in the money" puts we can set up a parralel matrix which simultaneously sells "at the money" puts. This effectively creates a fade matrix of bear put spreads. The deep ITM puts are not subjected to theta loss, while the ATM puts are subjected to theta loss. We are not net sellers of the option, since this is a debit spread, but we are net short theta. When the issue, in this case AAPL, does turn, the ATM short puts have a delta of 0.5 or less each, while the deep ITM puts have a delta approaching 1.0. The bear put spread, or bull call spread matrix lowers the cost of the trade (lowers capital allocation) and increase percentage return on the trade due to time errosion (theta). The deep ITM option needs to be rolled at times to further enhance the effects of theta throughout the trade. We can roll deeper ITM or further out in expiration effectively creating a diagonal calander spread.
Explaining and educating the average investor on the general principal of the fade trade with straight stock only is hard enough, let alone educating individuals on more complicated option plays which are compounding throughout the trade. Attempting to educate the general public is hard enough, let alone having them follow these techniques via a newsletter!
The advantages go on and on, but you should get the idea with this basic example.
George
