courses: Worth the Price?

Discussion in 'Options' started by keop, Jul 1, 2002.

  1. keop


    Wasn't sure which forum would be the best home for this thread, but since it relates mostly to options, I figured I'd spawn it here...

    Ok, I recently attended a seminar by, which intends to try to procure students for their options course, which heavily emphasizes the use of hedging and risk-aversion strategies to both grow and protect trading profits. Sounded like intriguing stuff, given the fact that most people are touting how they can make you zillions if you follow their trading methods, here's a group of people that are putting risk management ahead of profits.

    Of course they put up a few slides, and showed how with the use of a few fairly basic options strategies, how one could have made a nice % gain on some stocks that had fallen into the toilet, even if you were trying to swing trade them, etc., etc.. That's fine, I have no problem with their techniques, in fact, they fully disclose that technique wise, there is nothing particularly unique about what they do at all. So, why take the course? The allure as I can see it is two fold:

    First the teachers in their program are apparently made up of a bunch of very wealthy (and retired) former options market makers from the pits in chicago, so it's not like they are a bunch of hacks. The second component, (and this is the kicker), is that basically your $3000 tuition is buying you a set of genuine options trader 'reaction sheets' straight out of the trading pits. This book is 200+ pages that contains specific detailed instructions as to how to handle any given options trading scenario (so claimed the seminar instructor...). When to get in, what specific month, what specific strikes, weather or not to put a trade on if it meets or does not meet specific 18 point criteria, etc. The information in these pages are apparently designed to maximize your ROI (return on investment) and keep your risk limited so that when you win, you're winning by a larger percentage than when your wrong (well isn't that the necessary criteria that all successful traders must live by to survive these days??). Anyhow, These 'sheets' are supposedly so incredibly classified and top-secret to the professional options trader, that should he/she lose one on the floor, they would be fired instantly. The instructor mentioned that the options traders weren't daytraders, and that they would never be entrusted to trade millions of dollars worth of options based on their 'hunch' of where the market was heading, that the information in these sheets basically guided them as to what to do and when.

    So it seems to me that it's these 'sheets' that are supposed to get you to whip out your check book and sign up for first course. Of course they try to make you seem like it's a great deal because the course is usually 5K, and because you came to the course that night, they'll let you have in for $3650, and if you hand them your credit card on the way out the door, it's $3k, yada yada. Also, I found it rather deceptive, that nothing at all was mentioned about their level 2 course which comes after Level 1, and is another 3K. (I actually found this information out here on elitetrader..) Moreover, they want you to buy their expensive options trading software (not mentioned in the seminar) for $1500, and then there are monthly data fees on top of that. (supposedly the software and fee costs will be reduced when they merge their platform over with '' who is partnering with them to clear trades)

    So why am I writing all this? Well, I am curious if anybody out there has taken the course, and can attest to the information contained in those options reaction sheets. Are they THAT good? Does it really provide some sort of edge?

    As I see it, the value in the course has less to do with options strategies than the coveted information in those reaction sheets. Can the information in the book really tell you what is the best month and strike to buy a put on some stock you own to maximize your ROI and minimize your risk in an optimal fashion? How much can they help you decide which strategy has the most profit potential given a set of inputs? What is covered in the level 2 course that you are missing out on in the level 1 course? What percentage of people taking the course have managed to profit successfully using the options techniques in conjunction with the reaction sheets?

    To me, 3K is a LOT of money to have to make up in trading profits, plus the 1.5K software, plus an additional 3K if you want to take the next course. So can anyone say that it's worth it?
  2. rs7


    Never heard of the course you are refering to, so I really have no basis of an opinion.
    I do, however remember a trading simulation that was done in conjunction with the CBOE. I forget who conducted the "course", but I know it was recommended by the CBOE, and was given in their building at 440 S. LaSalle in Chicago. I also remember it was not as expensive....I think about 6 or 7 hundred dollars. Of course this was more than 10 years ago, so who knows?

    I would call the CBOE and ask if you can get any information on the course you are talking about, or any other courses that they may endorse (if that still goes on).
    If the CBOE is not responsive, try customer relations at First Options, or Spear Leads, or any of the larger clearing firms. They have always been quite cooperative with these kinds of inquiries.
  3. I took both courses. If you are clueless about options, and you don't have time to read books off the shelf, and you have the 6 thousand to spend then it may be worth it. If you are an investor level 1 is ok, but If you are a trader don't take level 1 if you are not going to take level 2. Some of the criteria is common sense, most of it. They just figure scenarios with basic math, how much will you win vs. how much will you loose, if the ratio is favorable or not. All the criteria makes sense, but depending on your style some of it isn't applicable. Level 2 was a fun course, I learned alot, they explained it all clearly, etc. Most of the strategies are in books, their criteria is what you pay for, and the criteria is not rocket science, I am sure that many traders do know or apply similar criteria. There are a million ways to skin this cat. Their way might be a secret but it isn't the only way. The floor trader instructors were cool, my only gripe was the owner's sales tactics, who by the way was never a floor trader, I hear he used to sell real estate seminars.

    I hear the software really blows, specially for the cost. The software monthly fee is a rip off, because as I understand they use thinkorswim's data feed, which is ProphetFinance, which is cheap, TradeSecrets wants a monthly fee of like 90 for something that probably costs them 30 max. And icing on the cake is that they have level1 and level2 software.
  4. keop


    Hi Riesgo,

    It sounds like you learned some good stuff, but as you said, the criteria while useful, isn't rocket science. Do you still use the criteria when you trade and has it been effective in terms of helping you to profit? If it isn't what you had expected, do you happen to know of any good reading on options that might offer some insight, as to how to create your own criteria for determining a sensible ROI? I have read a few options books myself, including:

    Options: A personal seminar
    Options Volatility & Pricing

    and I have yet to read the following on my bookshelf:

    How I trade Options
    The Options Edge

    and the videos:

    leaps strategies
    options spreads made easy
    insider strategies for profiting with options

    Anyway, I very much appreciate your insight about the course, I'm just trying to determine if there is good value for the expense. It's a lot of money to pay for something that may be garnered if one is willing to put the time in on their own.

    many thanks.
  5. Alot of the criteria is not useful to me because it is based on anaylizing complete spreads to open, not legging into them like I usually do. So while I do keep the criteria in mind as it is valid, I don't necessarily eliminate a spread or trade because it doesn't fit the criteria at the moment. I will leg into it and set it when it does meet or exceed the criteria.

    After reading that many books, you probably are familiar with the basics+. To be quite honest, I would skip trade secrets and read cottle's book on options, I got just as much out of that book than I did out of the courses. Good Luck
  6. Better alternative is to pick up best of breed options book from Natenburg, Cottle, and Mcmillan. Know them inside/out, open an account and trade small, take a journal go over them. Learn from your mistakes, avoid them and refine the winning trades.
    Don't be too impressed with rich market makers who USEd to trade. The market is so vast and riches so unfathomable since it takes as much energy to buy 50 lots as it is to buy 1 lot you have to ask yourself. Why are they not in the pits this very second?

    Even if you lose $ on my suggestion, (lose no more than $1000 by trading 1-2 lots initially) you get to know yourself, your likes and dislikes-do you like to sell premium, comfortable with long theta? etc Things you could never get in course.
  7. keop


    Does anyone know where I might obtain a used copy of cottle's book? It's out of print, and I couldn't find anyone who has it in stock via a google search (they all lead back to b&n or amazon anyway, and nobody is selling used there.
  8. What is the title of Cottle's book?

  9. vvv


    i couldn't agree more.

    ps, the title of the book is:

    Options: Perception and Deception
    Position Dissection, Risk Analysis and Defence Trading Strategies
    by Charles Cottle
  10. Trajan


    That is hilarious. Traders throw the stuff on the floor although usually torn up. Besides, you print up so much of the shit you have no idea where it all goes. I have found sheets for even the most dilligent and secretive goups with the most to lose if people knew their positions.
    #10     Jul 2, 2002