Lee Lowells Instant Money Trader Options picks..

By | November 16, 2012

Continued from.

I will try to be brief in explaining intricacies of an options trade because the scope of this article does not allow it, you will have to be acquainted with terminology of the options market first.

So here we go…

The Options Market Lingo: The Strike Price  (exercise price) of an option is the price at which the options contract is to be bought or sold when the option is exercised.

While the price of the underlying asset, must go up in the equity market (for calls) to turn profitable, and down (for puts) to turn profitable, of course this has to happen prior to the Options Contract expiration.


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An Options Contract that could be traded on a national options exchange is known as a listed option, these have fixed Strike Price and expiration dates. An Options Contract typically represents 100 shares of company.

For Calls, an Options Contract is said to be in the-money if the stock price (in equity markets) is above the strike priceOptions in Money and Out of Money of Options Contract. For Puts, an Options Contract is said to be in the-money when the share price (in equity markets) is below the strike price of Options Contract.
For Calls and Puts the spread  between the share price (in equity markets) and the Strike Price is the intrinsic value it can be negative too. If it is in the negative it is out of the money Options Contract, and if the Strike Price and share price is same it is said to be at-the-money.

The Price ( to acquire the Options Contract)  is called the premium, this very much depends on many factors like  a share price (in equity markets), Strike Price, and (time value) time remaining for expiry of the contract and the volatility of the share.

Let us get back to the reason why I am writing this review about Lee Lowell’s Instant Money Trader,

Right now, bunches of savvy investors are getting paid cold, hard cash for nothing more than agreeing to buy shares. Investors are giving them money to buy that they were looking to purchase anyway.

There’s an incredibly profitable, but little-known trading and investment strategy that you will come to love as much as I do because of all the “instant cash” it can generate for you.

From what I understand from the write up on his website. Lee Lowell  is recommending the strategy of Selling Put Options (it is not little known anyway and not simple either).

If you are looking to buy shares, what you normally do is put a limit order in your brokerage account keen to buy at a price according to you is a bargain. Instead it makes more sense to just sell a Put Option and get paid upfront (option premium) for selling the Put Option, for a stock you wanted to buy anyway.

Nonetheless to be a smart put-option seller – only sell put option contracts at strike prices at which you would like to own the share if called upon to do so.

Of course, it gets thorny if something awful happens to the underlying share if it gets clobbered and you are on the hook to buy it, even if you don’t feel like owning it any more, and that is the risk aspect.

You benefit from Lee Lowell’s strategy only if your aspirations for buying the share is cash backed and you are willing to hold the stock even if something goes wrong.

You make money by way of (option premium) just by agreeing to buy, if the option contract expires worthless the money is yours to keep.

In sum trading in Options Calls or Puts is similar to placing a bet on the future price of the stock. If you get on to a winning trade the Option Premium you get is all yours.

If you are not fortunate enough with a trade you end up  (buying in case of selling a  Naked Put) or selling (in case of selling a Covered Call) into a trade that you regard as a liability and you exude painfully.

I always welcome any corrective suggestions to improve this review,  simply click ‘Suggest Corrections’ to hook up with me, I promise to update any constructive suggestions accordingly.

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3 thoughts on “Lee Lowells Instant Money Trader Options picks..

  1. Tim

    I bought Lee Lowell’s program a couple of years ago and quickly got my money back, not because the program wasn’t good but because it was deceptive. Until I had paid my money it wasn’t revealed that it involved put selling which was something I couldn’t do at the time. The person I spoke to claimed Lee’s program at that time had never had a losing trade.

    Much has changed in my investing relationship with options over the last few years so I will share with you from my experience.

    According to Lee Lowell and supported by Porter Stansberry, 90 plus percent of the time put options expire worthless. So the seller of puts wins a majority of the time. For a time in 2012 my brokerage account glitched up and I was able to sell cash-backed put options. With anywhere from $15K to $25K invested in puts I was able to make close to $8K on an annual basis.

    I did approximately 20 trades and won 90 to 95% of the time. I think I only had 1-2 losing trades. Now you have to understand how winning is defined in order to understand Lee Lowell’s claims.

    A winning trade means that the option premium for selling the put exceeds the cost of closing out the trade should you do so before expiration. When I was running my put selling strategy I realized that turnover was important in generating profits, so I would close-out the trades at a 70 to 80% discount from the original premium in order to be able to get into more trades. Lee Lowell does some of that as well.

    Currently I’m not selling puts because my brokerage account switched to a new computer platform and put selling was no longer available to me. However, I have been considering getting back into the business thru another brokerage house because I know you can make money at this.

    I believe Lee Lowell has been very successful at this partly because the odds tend to be in your favor. The same is true generally for selling covered calls. The probability of selling a covered call is the same as selling a cash-backed put at the same strike price. Should I get back into this I will likely buy Lee’s service to supplement what I know I can already do.

    One final thought. There was a period a few years ago when I purchased a service buying calls and puts. I noticed that both the track record of the service and my experience following it was about 50% win, 50% loss. I couldn’t seem to make any real money with that strategy.

    That’s when I discovered the guys making the money were the ones on the other side of the trade (selling puts and covered calls). The returns are more modest but more consistent over time.

    Reply
  2. reggie

    Robert,I hope I’m not wasting your time as i have not tried Lees program but I have been researching it as you have.

    I have pretty much reached the conclusion that you can make make a safe (reasonably) return if you have a lot of money to back you or you have access to a line of credit to allow you a large margin(that naturally increases you risk).

    I believe that if you have 25k or less you would probably net around 7-8k per year safely I believe lee is honest and that he will honor his product but I believe you are going to have to tie up some serious money to see returns like 20k per year. This is only my honest opion Robert.

    I have been taking a serious look at monthly cash thru options check it out, best of luck Reggie

    Reply
  3. Robert

    Do you or anyone you know have positive or negative feedback on just how successful Lee Lowell’s short selling option’s program is doing????????

    Please get back to be with what ever information you have.

    Respectfully
    Robert

    Reply

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