Most articles about the Optionetics Scam on the Internet contain the exact same information. Those authors are simply copying other Optionetic articles on the Internet. This article is different because it is based on a first-hand experience with Optionetics.
Optionetics was founded by George Fontanills, who is currently being investigated by the government for illegal use of margin requirements.
I first saw the ads for Optionetics earlier this year and attended a free seminar. The thing that impressed me is that Optionetics offered a money-back guarantee. However as you get further into the program, you learn that the guarantee is not unconditional. Optionetics has carefully structured the guarantee, so that you would have to risk thousands of dollars to perform enough options trades to quality (actually 72 trades, not the 36 trades they advertise.
In Optionetics seminars they promise you that you are practically guaranteed to make money. However when you attend the two-day seminar, you are finally told that you can only really make money if you buy their additional software and happen to guess the right direction of the trades that you place.
In short, the Optionetics seminar that I attended was almost entirely based on techniques that try to help you guess which direction a stock would go…directional trading.
Options are most effective when they are used to protect your stock investments. You can even buy calls if you think that a stock is going up or buy puts if you think a stock is going down. However, only buy calls and puts on speculation if you have “money to burn.”
Options are different than stock because they expire. A stock can always go back up in price if it falls. Options however, expire and become worthless after a specific date. That means that you can lose any money you invest in options permanently if you are wrong in your theories about whether a stock is going up or down.
Another point that Optionetics makes that is confusing, is that you can increase your odds of option success by doing spreads. The problem is that spreads are expensive. The broker fees from the trades can quickly eat up any profits you make from the trades.
To summarize, Optionetics does provide education on options. However, they lead you to believe that it is simple to make money with options…this is misleading and untrue. I have definitely not made as much money in options, as I have in prudent and wise investing. Even dividends are a better way to invest.
The one valuable piece of information I did learn from Optionetics is that if you own stock you can sell covered calls and protect the stock with puts. To me this was the only semi-reliable idea that I learned. And to my dismay, the Optionetics personnel I talked with about this only discouraged this more stable idea as “too small minded.”