Mike Shedlock is pumping some option trading product on his blog called OptionMonster.
He thinks he's disclosed enough when he says:
Those trading options or interested in trading options may wish to check out OptionMonster, a service that I feel has a lot of potential for option traders. Yes, I stand to profit if you sign up and stay signed up, but I would not mention this service if I did not think it was worth a look.
And then later:
I cannot personally vouch for OptionMONSTER because I have not tried it. However, I can vouch for the founder's reputation. I have high respect for "Dr. J".
Okay, I'll finish the disclosure.
This product is crap. The two examples Mish gives from the *service* highlight nothing. One of them involves scalping a vertical put spread in US Steel.
To me it's a dead giveaway that someone is an option Moron when I hear them talk about 5-point or 2.5 point spreads. And don't mention *iron butterflies* either - that's another screaming badge of ignorance.
[Hint - y'all can't make any real money with those sissy trades!]
Someone Always Knows
OptionMonster publishes research based on the idea that unusual trading activity (puts, calls, etc.) predicts future price movements.
This also is utter CRAP.
The idea that one can build a profitable trading strategy around coattailing savvy option trades may be marketable to retail fools, but it's just another brand of snake oil.
In a nutshell, the trades are way too hard to identify and probably not sufficient in number.
All that energy trying to figure out what *the smart guys* are doing would be better spent reading the tape and doing more eclectic research - like reading blogs!
For sure there are plenty of savvy traders out there whose knowledge can be profitably tapped.
But the best resources are out there are definitely not pumping or selling retail products (or writing books).
Just think, if Dr. Najarian of OptionMonster had a winning option trading strategy, would he be peddling it over the web?
Or would he be implementing it quietly with proprietary capital?
All he has is a *marketable* strategy - just like Fidelity!
What's humorous AND deeply ironic is that *Dr. Najarian* made all his money over 25 years in the CBOE options pits....as a marketmaker taking the other side of retail trades.