David and Tom Gardner began The Motley Fool in 1993 and quickly grew an online following by targeting their investment advice at casual investors. They are now one of the most trusted names in the world of financial media.
Their success has largely been built around two things, the simple straightforward financial language used that almost anyone can understand, and the incredible and consistently outstanding investment returns over more than 20 years.
Their flagship stock-picking product, Stock Advisor, began in 2002 and Motley Fool Options began in 2009 to provide a similar service for options traders.
Is Motley Fool Options for You?
If you know nothing about Options trading, you’re not sure if you will make any actual trades, and/or don’t have thousands of dollars to invest, then it will be better to learn about Options from YouTube and other sources, then return to this service when you are wanting to trade. If you dislike volatility, then any Options service is probably not for you.
But if you have the funds available, thrive on volatility, and are fully committed to trading, then regardless of your options knowledge, this service can provide the knowledge and guidance to have you trading like a pro.
This service comes in two sizes, Options U is an educational program, and Options Alerts recommends Options.
This is a comprehensive educational program for new options investors. Options are more complex and volatile than stocks, and this program takes you from beginner to experienced with easy-to-understand information.
Lessons come as videos or in-depth guides in text format and are categorized into three levels:
- Options Essentials
- Options Strategies
- Options Masters
The material gets more advanced as you progress, with topics including:
- Introduction to Options
- Buying Options
- Writing Options
- Using Options to Complement Stocks
- Advanced Options (Spreads, Diagonal Calls, Strangles, Straddles, etc.)
For those new to Options trading, this education is a ‘must do’. If you have already been trading for a while, you will almost certainly learn something new. You can also access reference guides that serve as good cheat sheets while you’re trading.
Motley Fool issues a few new Options recommendations every month, ideal for investors and swing traders. Their trading strategy is easy to follow. Day traders, however, would gain greater benefits from a more active service.
Most casual investors and traders don’t have the time to watch the market all day, every day. The recommendations made are designed for longer-term traders, so you don’t have to tend to your positions all day.
The service is comprehensive, recommending both buying and writing options. Common alert types include:
- Basic calls/puts
- Covered calls
- Synthetic covered calls
- Diagonal calls
- Bull call spreads
- And more
If any of these terms make no sense to you at all, don’t worry. They are all explained in both the OptionsU education and in each Options alert.
Each Option alert comes in the form of three reports:
- The Trade Thesis – this explains the logic behind the recommendation and details specific to the company and the industry.
- The Options Strategy – explaining why the specific options recommendation was made and includes a few alternative Options strategies that members can follow. For example, they may offer a more aggressive strike price for traders who want more upfront cash from writing Options but offer a covered call strategy as an alternative to writing puts.
- How Subscribers can Follow the Alert – an outline of the strategy and a recommendation for how much capital investors should allocate to the trade.
How well do these Options recommendations perform?
It’s important to recall that The Motley Fool has been around for almost 30 years and has a track record of consistently outstanding performance.
Their Options service has operated since 2009 and 85% of the recommendations resulted in a profit. This is impressive when you consider the volatile nature of options.
Is the Options Service Worth the Price?
You can subscribe to this service for $999/year but there is currently a first-year discount of $100 so right now you can get started for just $899.
A 30-day satisfaction guarantee means if you feel this service is not for you, then you can transfer the fee to cover the cost of one or more other Motley Fool services.
While this is one of the Motley Fool’s more expensive services, similar services elsewhere go for as much as $3,000.
If you only have $1,000 in your investment portfolio, you will struggle to recoup your subscription fee by following the alerts. But if you have more investment capital, you should be able to recoup the subscription fee with a few trades. Motley Fool Options has an 85% win rate, with recommendations regularly returning 25%, 50%, and 75%.
The long-term Motley Fool track record and 85% profitability rate, the Options education that enables Options traders to build a strong foundation and continue to expand their skillsets, and the alerts themselves being easy to understand and follow make this package of services that cover all the bases if you are the right investor for Options trading.
If you have the money available and the stomach for volatile investing, then this is a great option for investing in Options.
You can get started with Motely Fool Options by clicking on this link.