I saw an article for these guys in Shares magazine and thought I'd have a look at their website. They reckon they have a 98% success rate.
Has anyone had a look at this? I would appreciate any thoughts.
If you had a system that worked 98% of the time would you sell it?
Only an idiot would sell a system if it is as good as they claim. I would think it is a great system that only has a small fault. Either it doesn't work when you actually use it or it trades so infrequently that it isn't worth having.
There are lots of these systems around but there don't seem to be many people around verifying their results.
I hope you save your money and do your own research to find a trading system that suits you. It is far more satisfying than handing over cash only to find it wasn't worth it.
"The 98% System is not a get rich quick scheme or a short-term strategy, but a genuine opportunity, which we successfully use ourselves to generate a very useful additional income for next-to-no work."
So it's not a get rich quick scheme, it's a get rich with next-to-no work scheme!
Well they practically tell you their strategy in the blurb on their web site. They tell you that it involves selling options at a £5 a point bet on a position held for 3 months and that on average it makes £450 a month. Therefore you need to sell options worth about 90 points. They probably sell a strangle i.e out of the money puts and calls. Looking at option prices on City Index for July you can have a down bet on the 3450 Put for 48 points and a down bet on the 4225 call for 43 points giving a total of 91 points. providing the FTSE finished between these points on expiration in July you would win £455. The idea is probably to put a bet on once a month for 3 months and then just to take your winnings every month and put on another bet. The danger with this strategy is that for every point the FTSE closes either above or below the option strikes you would loose £5 a point allthough you would have a buffer of 91 points in the example above. So then you have in theory the possibilty of unlimited losses against a small winning. You would also probably need a lot of margin and nerves of steel if the FTSE were to rapidly move towards one of your option strike values.