Tuesday, October 22, 2013

Review of SpreadTheTrend.com

In my prior post about Adventures in Autotrading Services, I discussed my overall experience to date with a handful of autotrading newsletter services.  And in conclusion, mentioned how one program has actually delivered solid results so far.  That service is SpreadTheTrend.com.

SpreadTheTrend is a iron condor/credit spread newsletter services run by Derek that trades the SPX index options.  Derek posts on Twitter under @spreadthetrend, doesn't have a chatroom, and communicates primarily by email, although he does publish a phone number which I've never tried. 

The website is in the process of being revamped, so the information below could become somewhat dated soon.
  • The non-member/public portion of the website has some helpful information including a very helpful FAQ's, how to get getting started, performance page, etc.
  • The members section contains a couple dozen or so tutorials diving into more details regarding trading credit spread options strategies.  There's a lot of useful information in there and it's not overly technical, so it's relatively easy for a beginner with some basic options knowledge to understand.  But since I'm autotrading, I admit I haven't studied these posts as much as I should.  Maybe it's time for me to revisit them.
  • The performance page format has changed starting this year.  However, you can still see the prior years in the older (and less detailed but easier to read) format.  I started with this program in Q1/2013, so I don't have actual performance results prior to that time.  But from what I have heard from others, the posted performance on the website going back a few years matches their actual account performance very closely.
As mentioned earlier, the primary source of communications is via email.  Since I subscribe to his autotrading program for hands free execution of his signals, my interaction with Derek has been very minimal, only via email.  His response time has been timely, usually within several hours or less during the weekday.

For those who manually execute his alerts, there are examples of how his alerts are emailed on his website.  Pretty straightforward.

He also sends out market commentary on a weekly basis, or more frequently as conditions change.  I admit, I was initially ignoring his market commentary emails since I was in autotrader mode and didn't really want to know what's behind his signals -- I just wanted results.

However, I now look forward to reading his market commentary.  His emails are far from dry and technical -- they often have a entertaining and sometimes quirky or snarky tone (I mean this in a positive way), ranging from rants regarding the "cabal" propping the markets, some subscribers getting too nervous about current positions (or complaining about being in cash too long), or whatever is the topic de jour.  But in the end, his commentaries consistently contain very valid insights and perspectives.

He often says he has no idea what the market is going to do, which might lead you to initially wonder whether he's the right guy to lead the ship across the ocean.  But read carefully and you'll see that his commentary is peppered with wise trading wisdom that can only come from years of trading experience.

For whatever reasons, Derek is yet another newsletter service proprietor who doesn't advertise or market himself very much in his communications.  You won't see "BOOM" or "nailed it!" type comments from him.  It's hard to tell from his Twitter posts that he even offers a successful alert service.  Maybe it's because he's content with his subscriber base, or maybe he'd rather grow based on referrals and focus on trading.  I'm finding that a lot of the good services are very low key, and they probably like it that way.

Ultimately, just look at his past performance and results speak for itself.  I often sense an interesting dichotomy between his market commentary vs. his timely trade executions, and believe it comes down to his unique and intuitive feel for the markets, which can change quickly due to market conditions.  His trading seems to be far from mechanical, and that's what I have come to appreciate about his trading style.

Here's a breakdown of my P&L based on the autotrading service:
  • $5,959.45 in profits net of commissions since starting in February 2013
  • About 24% net return year to date since late February, based on a $25k allocation
  • The net return does not factor in subscription and autotrading fees
  • I started with a decent drawdown, at one point unrealized losses were around 15-20%.  So right off the bat, I was able to see how Derek managed difficult conditions, and in hindsight, he handled the situation very well.  Many other similar services panicked and booked big losses.
    P&L curve generated by TraderVue.com
  • The report below indicates a 81% winning percentage
  • However, this is based on how I grouped the various legs of the trades together in Tradervue (which were grouped by expiration month)
  • But if you track the trades based on how they rolled (if applicable), the accuracy would be higher
  • The profit factor is a very respectable 2.50
  • And the probability of random chance is < 10%, meaning these results are not likely due to luck
Statistics report generated by TraderVue.com
SpreadTheTrend is a keeper, assuming the results remain within acceptable historical ranges, which I believe they most likely will.  Although my primary goal is to diversify with other autotrading programs, I will likely scale up my investment in this program next year.  So if you're looking for a solid program to begin autotrading credit spreads and iron condors, SpreadTheTrend would be a very good program to consider. 


Marco Starr said...

This newsletter has suffered a series of catastrophic losses over the last few months which has near enough decimated the accounts of many of its subscribers wiping out several years of gains in one go. We had four open positions that all fell deep into the money, STT’s response can be compared to a deer being caught in the headlights, no plan of action, missed opportunities to roll/close out positions, he appeared to be at a complete loss as to what to do. The end result for many was subscribers was one position expiring in the money basically because his order to roll was placed 3 hours before market close and did not fill. Pretty unforgivable considering we had literally weeks to come up with a solution /plan of action. A lot of people feel betrayed by this newsletter, so all I can say is DO NOT risk your hard earned dollars with this newsletter, the ship is listing and virtually sunk. Please note at the time of this posting the performance table on the Spread the Trend website does NOT as yet reflect the afore mentioned losses.

Grove Under said...

Hi Marco,

Thanks for your comment. I've neglected to update this blog recently, but you are absolutely correct about the big losses from Spread The Trend.

Very sorry to hear that you were a part of this. My credit spread options account is now down over -35% (which means I need a 55+% return just to break even). It sure has been a very frustrating experience.

It's been way too long -- I'll be posting an update on the blog soon.


FX said...

Almost forgot about your interesting blog, update will be welcome. Cheers

Spread The Trend said...

Spread The Trend Response to Marco Starr

We are responding to the comments made by Marco Starr whose name is unfamiliar to us. When a trade is rolled, you close one position and then simultaneously open another position. The losses being referred to are paper losses. A true realized loss is not incurred unless someone chose to simply close all positions and not roll their trades. We are currently down for the year with implied volatility being anemic but our final tally is far from solidified. We have also been trading in and out of several positions to help reduce the cost of our rolls and being as conscientious as possible to our subscribers.

In regards to “wiping out several years of gains” this seems to be an over reaching statement. You only need to view our track record page to see that we are well ahead of the game if you consider the longer and even medium term. Now had someone only been with our service for less than a year, then yes it is possible that their account could've temporarily dropped below the value they started with. http://spreadthetrend.com/yellow-condor-history

All along it was explained to subscribers what our plan of action was and why our decisions combined with market forces lead to these outcomes. In all fairness, perfection in trading is difficult and we stand by our longer-term track record. Of course, we do our best to try and avoid getting into stressful situations altogether. We also believe we could have done a better job as well and have taken “key learning’s” to heart from this experience.

The majority of auto trade subscribers, or over ¾, did fill on the roll in question. As for those folks trading their own accounts the results seemed mixed as some did fill and some did not. It’s most common for everyone to fill or not fill as a whole but on rare occasions sometimes not everyone will get filled all in the same day. This can possibly be due to the timing of the order being sent or how quickly the broker is able to submit the order, or it could even have something to do with the liquidity in the market at the time the order is processed.

When we see that the mass majority is filling that tells us that our order is priced fairly and correctly. If a broker did not fill, then we ask the question why? There are tools available where one can go back and see the amount of volume traded on these strikes, which shows there were many fills. Could Spread The Trend have sent the order earlier? In hindsight, probably yes. However, the process that has been successful for many years dictated that waiting was appropriate. We desired a different outcome as well and these trades impact our own personal accounts.

All trades are posted on our website in the Member's section under current open positions with all of the details in their entirety. We do not post the trades to our closed positions page until the entire trade has been closed out and as of Mr. Starr’s posting and this posting; the entire trade has not yet been closed out.

We offer a one month $1 trial so folks can get comfortable with the strategy and always ask that individuals add capital gradually. One may review both open and closed trades and decide if the newsletter is a good choice for them. Spread The Trend realizes that this period was stressful but we also have many winning weeks, months, and years on record. However, that concept that we were a “deer in headlights”, “virtually sunk”, or “listing” is disingenuous to our long term subscribers who are somewhat disappointed but are still extremely profitable and content with our strategy.

Steve said...

As a former subscriber to Spread The Trend I can testify to the validity of Marco Starr's comments and that STT's response is just Derek's typical longwinded BS. In July 2014 many subscribers, including myself had 50-80% of their trading capital wiped out due to Derek's negligence and manic insistence that the market was being manipulated upward(just review his comments on Twitter) and would be turning down at any moment. Of course just the opposite happened. In addition, when he finally realized that he might be wrong and decided to take action, it was too late, partially as a result of his work on revising his website(which I'm sure most subscribers cared less about) and resultant lack of attention to open positions. If you value your trading capital stay far away from Spread The Trend.

Praetorian said...

After some severe reviews on Investimonials and Stock Gumshoe, Derek requested obviously several months ago both sites to withdraw his service from their list, so that those reviews could not be read any more. One sign of dishonesty, but not the only one.
He is back now on investimonials, probably hoping for new good reviews. Well, not from me.
I cancelled my subscriptionbeginning of 2014 but I am still stuck since then in some vertical spreads which have been rolled and rolled and rolled. Global Autotrading is managing those positions for me. This rolling tactic allows two things: first to confuse completely anyone trying to follow the outcome of the original catastrophic trade, second to ensure that the losing trade will not be visible for a while in his not less confusing track record.

"Option trading that won't leave you awake at night. Learn more about peace of mind". This sentence can be read on the website from Derek. Well, be sure that you won't be able to sleep anymore when Derek manages the trades. Even if "manages" is definitely not the right word. There is absolutely no risk management, no action taken when the positions go the wrong way. Only when it is too late, there is some desperate action to recover something.
Even winning positions are extremely poorly managed. Wrong timing everywhere, exiting winning trades a couple of days before expiration leading to additional commission fees for the subscriber.
There is no explanation about why a trade is opened, the rationale behing the chosen strikes, the timing, etc.

And finally: this "mad" (there is no other word) habit to mention in each and every newsletter that the market are manipulated and pushed higher by some obscure entities which Derek never calls by names. Who are they Derek? The FED? The government? Hedge Funds? And if you are so aware of such manipulations, why don't you simply jump on the bandwagon and open the necessary bull put spread instead of fighting against the trend and the "higher powers"?

When I read that people lost a lot of their money in the last 3 months I am glad that I left this service beginning of the year.
I hope that many people will have time to read this review before Derek decides to withdraw again his service from investimonials.

Grove Under said...

This post has generated a lot of interest recently and I've had many offline conversations similar to the topics of the past few comments.

So here are some comments:

* There can be a gray zone between hyperbole, opinions, and outright false statements. This is evident when reading comments on websites that cover sports, politics and religion -- they frequently go to extremes and beyond.

* I truly appreciate all those who comment. I'm 100% for free speech, stating opinions, or just simply venting your frustrations, even if they are 100% contrary to my views. We've had all of the above on this particular post, and I understand where everyone is coming from.

Other than spam, I have never censored any comment on this website. But getting personal or making slanderous or libelous statements in this blog's comments will cross my personal beliefs of keeping things professional, and could warrant future changes.

* Everyone, including elite sports performers to theater actors to the best musicians, and yes, even the best traders, will encounter slumps and challenges during their careers. None of us are immune. We are all human. However, I believe a true judge of character is how someone handles themselves as they recover.

* I'm guilty of this as well as many others -- due to the consistent historical performance of certain newsletters/fund managers/trading systems, I've leveraged my positions more than what's recommended for my account size. We start to assume past performance IS indicative of future results. And we know what eventually happens when we assume.

* So when an unexpected bump in the road comes up (trade long enough and they eventually will), the bump can quickly turn into a big sinkhole due to overleverage, possibly resulting in catastrophic results. If you are overleveraged, you could run out of liquidity and get trapped -- you won't be able to properly maneuver and/or roll your positions out and away. It appears many trading STT's signals encountered this issue with unfortunately dire results.

* When we overleverage positions in our accounts, we're even more responsible and accountable for the outcome, especially when losses are greater than what was planned and/or ultimately reported by the trading service. I believe our job as traders is to manage risk, first and foremost.

* Therefore, if someone overleveraged their account due to poor risk management and blew up their account from losses 2-3 times beyond what it should have been, it is very clear who is accountable and responsible

* Yes, like everyone, I was very frustrated, but we can't change the past. Need to look forward
* I have scaled back my allocations to better match my reduced account size
* Based on recent changes in STT's positions, I believe appropriate adjustments in strategy have been made and am currently comfortable with the direction
* But with trading, there are never any guarantees in the future outcome

Like anything else in life, we will always face challenges. I consider this yet another challenge -- a bump in the road that I will learn from and allow me move forward smarter and wiser.

And again, let's keep the comments professional. Thanks everyone.

Grove Under said...

I've had some additional offline questions and comments, thanks as always for your interest.

Here are my responses:

1) The performance results I've posted and commented on from Spread The Trend has been based on their Yellow Condor service. They also have a newer Blue Mantatee service that I've never participated in or researched, but I hear it's doing OK.

2) Based on my experience, the Yellow Condor results reported by STT on their website has very closely matched my live autotrading fills and performance.

3) Including STT, I'm currently active in 5 different autotrading services in both futures and credit spread options. They are ALL experiencing various levels of drawdowns, which I thought would have been mitigated by the broad diversification in trading strategies I setup.

For example, in my futures autotrading programs, I was up to a peak of about +60% a few months ago on 4 different systems.

Since then, that futures account had a drawdown from the peak by a whopping -70% before recovering just a bit.

If I wasn't lucky enough to have had a decent run-up before the recent drawdown, that account would have certainly blow up due to overleveraged position sizing.

So at this time, I'd rather not publicly disclose them until the dust settles.

STTReviewer said...

I do not know what to say anymore. Today, I am devastated. My account, of over $30,000 hard-earned US dollars, has ALL been wiped out by Spread the Trend. I am utterly... and horrifically.. devastated. Words cannot describe the pain I feel as i write this review.

I subscribed to this newsletter several years ago (in 2012). From 2012 to 2013, Spread the Trend did ok, with modest gains. I used this newsletter service to have a monthly stream of income. As advertised on their website, "Peace of Mind, Proven Track Record". I have no peace of mind anymore. As of now, their track record HAS NOT been updated to show the large losses in the May/July 2014 time frame. In May/July the draw-downs were in the 40-50% range. I thought to myself OK.. I trust Derek. He will recover.

I was wrong.

I am now sitting on call spreads that I can say with 95% certainty that will ALL be maximum losses. My $30,000 account dwindled to $15000 after the May-July losses. With the coming expiration of these spreads on 11/22, my account value will be less than zero. It will be in the negative.

With I'll due respect, I agree with Marco Starr and Praetorian.

- The fact that Spread the Trend has been taken off of Investimonials is a sign of dishonesty. What is Spread the Trend trying to hide?
- Performance History on the website has not been updated. Derek argues that because he "rolled" these positions, that they all somehow count as a single position, and therefore nothing is shown on the performance about the MASSIVE losses that occurred MONTHS ago.
- Derek's commentary always include comments about how the "Government", or the "Fed" are all market manipulators. This does not take away from the fact that you are not able to navigate these treacherous waters. Do not even trade, especially auto-trade with other people's accounts when you're just going to blame the government for large losses in Spread the Trend. What people care about is their account value at the end of the day, and whether risk management is in place to avoid catastrophes like this. Derek said that he would make "changes" to STT after those large losses, however, whatever changes that were made turned out to be worse than worthless.

I've worked hard for my money. Not only has my account blown up, I've lost thousands of dollars in subscription fees to Spread the Trend.

Thank you very much Derek. I'll pray for you.

Grove Under, I hope you keep this post so that others may see.

orville said...

As of this writing (Dec 22, 2014) SpreadTheTrend is reporting on its website a 90% loss for 2014:

Portfolio Return AFTER Commissions (O) -89.97%

I can confirm a similar outcome to my own autotrading account, which I opened in 2012 with $25,000 capital and which last week had only $4,665, resulting in a final loss of 81.3%.

My account was an autotrading account and I used the recommended allocation setting of 20%. With a maximum of 4 positions, only 80% of capital was used, leaving 20% for adjustments. In other words, I was not over-leveraged.

Obviously this is a catastrophic loss. The reason my loss is less than that reported on the STT website is that the website is reporting for 2014 only, whereas mine is the overall result from 2012 (the account actually did grow in 2012/2013, hence the lower overall loss).

However, when the $3000 of subscription fees are factored in, my net loss actually exceeds 90%. These are the facts.

My opinion is that Derek traded very recklessly in 2014. In October 2014 he allowed THREE allocations (out of a maximum of four) to go deep in the money. He placed three Bear Call Spreads at various strikes between SPX 1970 and 2020 during the market downturn in October 2014, just 3 or 4 weeks after the SPX had made an all-time high of 2019. When the market bounced back up he did nothing to protect the positions.

The first rule of trading is to PROTECT CAPITAL. The second rule of trading is to TRADE THE PRICE, not fancy indicators. Derek failed to follow these basic rules.

Performance BEFORE commissions reported in 2012 website

2008 Performance
Performance BEFORE commissions 37.8%
2009 Performance
Performance BEFORE commissions 165.6%
2010 Performance
Performance BEFORE commissions 55.9%

Performance AFTER commissions reported in 2014 website
2011 Performance
Portfolio Return AFTER Commissions (O) 36.10%
2012 Performance
Portfolio Return AFTER Commissions (O) 51.63%
2013 Performance
Portfolio Return AFTER Commissions (O) 32.04%
2014 Performance
Portfolio Return AFTER Commissions (O) -89.97%

I gathered the above figures to see how this catastrophic loss would look if you had theoretically traded the newsletter since inception in September 2008. By my calculation, you would still have ended up with a 52% overall loss by December 2014 (non-compounded).

Credit to SpreadTheTrend for being honest and reporting the 89.97% loss on their website.

Nevertheless I find it astonishing that anyone would want to trade with them again.

STTReviewer said...

Yes. I would find it astounding that anyone in their right mind would want to trade with them again. I am glad that they have chosen to be honest and have reported the disastrous losses on their website. Nonetheless, I am highly disappointed. I am disappointed that they have charged such high subscription fees (which amounted to nearly $100 per month), only to have wiped out many individual's accounts. I have lost several thousands of dollars in subscription fees to Spread the Trend.

I can also understand why e-Option has stopped auto-trading with Spread the Trend. They said this service just kept rolling and rolling positions in order to hide losses, which made it difficult for e-Option to calculate account values. This was the response from e-Option.

Robert Plevy said...
This comment has been removed by the author.
Kim said...

There is a wrong perception about newsletters and how easy it is to start and run a newsletter. It's not.

Through running my own site I am well aware of the time and patience it takes to run a membership program like this. You are limited on vacations, and flexibility of time, and have to deal daily emails and those with unrealistic expectations. It's a 24/7 job in a very competitive area.

What happened to STT in 2014 is not necessarily Derek's fault. The problem is the strategy, not Derek. When you roll spreads from month to month, a big loss is inevitable at some point. Look at BookingAlpha, monthlycashthruoptions and others.

Kim Klaiman

buzzer1137e said...

Kim...that comment about what happened to STT not being Derek's fault is ridiculous! Of course, it's Derek's fault! He and he alone is responsible for taking peoples $$$ with certain expectations through his advertisement of his service, and dropping the ball like he did ruining peoples financial lives in the process. How can you say it's not his fault? If he implemented this "flawed" strategy, who else is there to blame? There are people I've been in touch with that are trying to put this guy under by filing lawsuits. I doubt they will succeed in putting him out of business, but I certainly hope they do. This was an unforgivable abomination and anyone reading this post and the ones above would do themselves a HUGE favor staying away from STT!

Craig Smith said...

I've been a subscriber to their Blue manatee letter for almost a year now and am quite pleased overall. Their customer service is top flight and I enjoy their stock market updates for the most part. I wish the updates would always come out before the trade ideas but there's not much I can do about it. I find most of my nervousness and anxiety comes not from Dereck or from the strategy but from the market itself. I mean the market just seems to go crazy sometimes. Having said that I don't think there is a strategy or newsletter out there that will be stress free 100% of the time. So my advice to folks trading is to try and set realistic expectations. Know there will be ups and downs and know the risks of a particular strategy or of the positions you get into.

The behavior of the stock market can change from time to time so certain strategies or types of trading may work better at various times depending on the conditions. Try not to put all your eggs in one basket. Maybe pick out a few newsletters that use different strategies. That way hopefully some will perform while others are underperforming. I have things autotraded by TDA/TOS as I don't have the time or patience to watch this stuff all day long. I have found autotrading to be a good fit for me. Before trying Spread the Trend I tried an algorithmic type of system thinking it would help with the emotional side of things. That style of trading kept underperforming what my other newsletters were doing so I decided to stop.

Expect to invest a lot of time and money finding good solid newsletters. Don't set your expectations too high. Don't expect to get rich overnight. Try not to get too focused on winning streaks and losing streaks as trading can be like a roller coaster ride sometimes!! Expect to lose some money and expect to deal with the occasional scammer yes unfortunate but it does happen. I have a subscription to another newsletter that auto renews and they won't respond to my attempts to cancel so I've had to contact my credit card company to get involved. I hope this will be helpful to someone out there. It isn't easy but it can be worth it if you stick with things!!

David R. said...

Yellow condor track record has now only 2015. The horrible 2014 has been erased like it never happened. Too bad his members cannot do the same with their accounts that lost 90%+.

Spread The Trend said...

I did a little digging since I know David R's real name, both of his email addresses, and his IP address... David our records show that you are not a current subscriber nor have you ever been a subscriber. Of course that doesn't rule out that you may have had a subscription under some alias as we've come across several such situations over the years unfortunately...

It does appear that you are on the public side of our website an awful lot though; wow you really don't have a life do you... So you would know good and well that we made some changes to our website on Dec 4th 2015 yes just 2 whole days before your comments. If we were going to or had anything to hide don't you think we would've done so a long time ago there bud....?

I could list at least 10 newsletters right off the top of my head that fudge numbers, don't count all bad trades, go long stretches without updating their track records, email their performance figures so they can conveniently change and omit, use misleading and inaccurate figures to try and represent their performance figures, etc. etc. So David why don't I see you lashing out against all these other newsletters, why have you chosen to only pick on us?

It would've been a much smarter move had you simply asked us via email or simply given things some time to see for yourself versus lashing out to us in your email and posting immediately on this blog.

David R. said...

So you are saying that you did it because other newsletters do it? This is a really good explanation. I'm so relieved.

You say that other newsletters "go long stretches without updating their track records" - didn't you do the same thing in 2014? Of course you will say that you waited for all trades to be closed, but the fact is that the accounts of your members were down 50-80% in meanwhile. Not paper losses, real losses, while you continued rolling positions and blaming the Fed.

As someone mentioned, the fact that you requested that STT to be removed of Investimonials and Stock Gumshoe was a first sign of dishonesty. Removing the 2104 track record now puts you in the same league with those newsletters you mentioned. And no, I didn't pick only on you, but this is not the issue here.

You said that you have a good explanation for both, but you provided NONE so far. If you provide good explanation, I will be the first to admit that I was wrong.

Spread The Trend said...

It has now become evident on this blog that Marco Starr, Praetorian, STTReviewer, and David R. all happen to same be the same individual. Perhaps this individual has posted under additional names on this blog as well but these are the 4 that we know of.

We are continuing to try and work with the owner of this blog to try and resolve this issue. This has gone on for far too long and this one individual continues to make slanderous and defamatory remarks against us.

This same individual also managed to steal our active subscriber list a couple of years back and has continued to solicit our subscribers in various ways. Of course one of those ways is to try and get folks to post negative comments against us on this blog.

There's a lot more to this story so stay tuned.....

Pepen Supendi said...

"In the forex market, traders generally evaluate currencies and their respective countries in order to decide whether an investment is worth it. Economic announcements made in any country often have a direct impact on the true value of a currency, which is why fundamental analysis is used.


#HiWayFX #forex #trading #economy"

STTReviewer said...

No, we are not the same individual. I am an actual former subscriber of Spread the Trend, and I do not know Marco Starr, Praetorian, or David R. I'm only responding because of this false accusation that we are the same individual. I do not own any newsletter, not do i intend to open one. The only reason why I've posted under this blog is to mention my real experience of 2014's disastrous loss in the Yellow Condor service.

A couple questions: Why has the performance record of Yellow Condor been taken off of Spread the Trend's website? Why are there no reviews of Spread the Trend on Investimonials.com? These are telling questions. As David R. mentioned, that is a sign of dishonesty. Just because other newsletters fudge numbers absolutely does not give Spread the Trend the right to do so as well. I would advise others not to trade with Spread the Trend if they want to preserve their capital.

Spread The Trend said...

Of course you're the same individual because I just sent you an email two days ago to your David R email address asking why you visit our website every 3 days! Most people don't check this blog every 3 days either like you do! STTReviewer hasn't posted on this blog in over a year so he just randomly popped on, please of course it's you!

So you've chosen once again to try and come on here and retaliate. Your playing dumb act may work for some but it sure doesn't fool me. I told you via email over one month ago that Yellow Condor was currently closed to new subscribers. I watched you navigate on our website in real time so you could confirm that with your own eyes. Yet you chose within minutes after that to come onto this blog and go blabbing on and on once again with your playing dumb act.

Just like you tried to play dumb with your posts about us not updating our track record a while back. Even though you had access to all of the information all along and since you've been a subscriber since August of 2012 you've known that we didn't change a thing in how our track record was updated. People may wish things be done a different way but all I've done is to try and stay consistent in how things are done.

For the record there is nothing that we've done currently or in the past that is in anyway dishonest. However, you on the other hand are a completely different story! You've lied to us, stolen from us, and violated many of our rules. When time allows that story will be shared for everyone to read about!

David R. said...


Paranoia is a serious decease. You need professional help ASAP.

So basically everyone who dares to criticize you is suspicious to be the same person? Interesting theory. But you also forgot Steve, orville, Robert Plevy and buzzer1137e who also criticized you. Are all eight of us the same person?

You still continue ignoring the REAL questions, which are:

1. Why you removed the 2014 track record from your website? How the fact that Yellow Condor is closed to new subscribers relevant?
2. Why you requested to remove negative reviews from Investimonials and Stock Gumshoe?

Simple questions. No answers.

Hopefully prospective members will do a simple Google search and find this blog.

Spread The Trend said...

I don't have to answer any of your questions, you're not a subscriber and you were permanently banned from our site a long time ago. I will be sharing the entire convoluted story about you, your partner, and your sham of a company. You think you can simply try to hide under a bunch of fake names and made up email addresses, we'll soon see how well that worked for you!

JRaider said...

You are an outright liar, Derek. It is a fact that your disastrous trades in the summer of 2014 cost subscribers a sizable part of their portfolios and the four call spreads opened in the fall of 2014 lost 85-90% of their value (three of the four spreads expired with full losses minus opening premium). The latter trades pretty much wiped out all Yellow Condor subscribers who followed your instruction of investing 20% of the portfolio in each open spread, reserving 20% for maintenance. I was fortunate to have stopped using your recommendations prior to the October blood bath.

It is also a fact that customer reviews on Investimonials and Stock Gumshoe for your service were taken off at your request. I had read reviews on your service several times in the past and went back after the disastrous trades and there was no evidence of your service ever being on either site. I contacted Investimonials myself and asked where the reviews of your service had gone and was told that you had requested that they be removed from the website.

I just visited your website and see that you have blocked subscriber information on your Yellow Condor service, including all performance information. It appears that you are trying to erase all evidence of the fact that you pretty much wiped out subscribers who used your service in 2014 and now are claiming that people posting on this blog are the same person trying to defame you. Since you had hundreds of subscribers who trusted you and lost the bulk of their portfolios last year, why is it hard to imagine several of them, including myself, wanting to warn others of what using your service may end up costing them.

You tell us Derek, if you are so proud of your service, why did you remove subscriber reviews off Investimonials & Stock Gumshoe and block access to the track record for Yellow Condors on your own website? We both know the answer to these questions.

Spread The Trend said...

The reason we're not listed on review websites is not at all for the reason you're thinking.

Having our track record available for the public to view is only done as a convenience for people. In fact it was done originally because we never used to offer a trial period. Now that we offer the trial period it doesn't really serve much of a purpose.

Yellow Condor is now closed to new subscribers and that's pretty much all the public version of the track is for new potential subscribers. As I've said multiple times if we really wanted to hide anything don't you think things would've been hidden a long time ago!

Spread The Trend said...

Now we have another person returning with a new screen name as it appears that JRaider and buzzer1137e are the same person. You see the other lovely human being that posts under multiple names on this blog has his email address so he must have felt the need to call in some reinforcements!

If you think I'm making it up, well I'll do you a one time courtesy of leaving your real name out but JRaider and buzzer1137e is a personal injury attorney out of Houston Texas and often uses the nickname "Sonny".

So now you two have warned people and you've emailed several of our subscribers on the list that you stole from us so kindly move on!

JRaider said...

You are pathetic, Derek. Instead of responding to legitimate concerns posted by former subscribers, you try to deflect by claiming all the posters are the same person who are out to get you, a blameless victim.

For the record, I do not know buzzer1137e, I am no attorney from Houston and I have NEVER emailed any of your subscribers….what few may be left. I, like the other posters, was a former subscriber who lost money with you and clearly see that you are trying to erase all indications of what you did to your subscriber's portfolios in 2014.

WHY IS IT SO HARD FOR YOU TO BELIEVE THAT THERE ARE MANY ANGRY FORMER SUBSCRIBERS WHO LOST THE BULK OF THEIR INVESTMENTS BY USING YOUR SERVICE IN 2014? Pretty much anyone who began using your service in mid 2013 and later were wiped out. I pity those who started using STT in mid 2014.

It is clear that you are trying to rebuild your service by erasing all evidence of Yellow Condor and starting anew. I, like the other poster’s here, are simply trying to warn the unsuspecting investor to take their hard earned money elsewhere.

I have a simple request for you, Derek. Please provide the performance results for the credit spread trades entered in 2014 for Yellow Condor. Also, tell us the real reason you are not listed on Investimonials or Stock Gumshoe if it’s not the reason we are thinking.

Spread The Trend said...

Of course you're going to say you don't know ebuzzer1137e! No you did not email any subscribers I was referring to the other whack job that started the comments section and has proceeded to post under numerous names on here.

I do find it a bit hard to believe that someone would come on here 15 months later just to warn folks but maybe that's just me. We have no record of you ever being a subscriber just in case you are not the other person for the record!

There's no rebuilding if that were the case all references to Yellow Condor info would've been pulled down 15 - 18 months ago and the rebuilding would've begun then!

All that was taken down is the public version of the Yellow Condor track record, that's all and the service was closed to new subscribers right around that same time. We may take down the public version of Blue Manatee shortly as well. Would that be OK with you? I thought I better check first since I am at the beck and call of former angry subscribers.....

I can understand folks being angry if the 2014 results were taken down back in 2014 but they were live for everyone to see right up until December 2015!!! Is it like some kind of a trophy for you goons you want it up there for eternity or something? One bad trading year for a newsletter that's been around since 2008 wow how horrible! I don't control when folks come and go but they seem to like to blame me for everything.

Sorry but these are in no way legitimate concerns of former subscribers.

My opinion is that you should be thankful for what you've learned at the newsletter. Maybe it's being thankful for what to do and maybe even what not to do. Newsletters have paved the way for folks to gain knowledge and insight they may not have received otherwise.

Believe it or not it also helps speed up one's learning curve. I can't speak for others but I had to figure everything out on my own, I didn't have the benefit of subscribing to a bunch of newsletters and learning from other people's efforts. I had to learn from my own mistakes.

I would've saved a ton of money if I had the benefit of paying $100 per month to watch and learn from some newsletter versus making a lot of big mistakes in my early years of trading!

JRaider said...

You are a fool.

Only a fool would say that subscribers, many who lost 80-90% of what was invested using your trading service, should be thankful for what was learned in your newsletter. A good analogy would be to go to a conceal and carry gun training class and then being shot by the instructor after sitting through most of the class. Instead of being angry at the instructor who just shot you, you should be thankful for what you learned in class first.

You state that the track record for Yellow Condor was taken down at the same time the service was closed to new subscribers. Very true. The big question is why was Yellow Condor closed? Yellow Condor was your primary service. Blue Manatee was opened as a secondary service to subscribers who wanted something safer than your original service. Why close down the service you had open for years, leaving open only the secondary, safer service?

I’m sure the former subscribers who lost 80-90% of their invested assets in 2014 know the answer to the question. Tell me Derek, how many new subscribers are you going to get if they are able to see that the Yellow Condor performance record for 2014 was in the neighborhood of -85%? Now, anyone who visits your site will be impressed by the much better Blue Manatee trading record and you may be able to trick them into using your service.

Former subscribers are not angry about whether you took the 2014 results down or not. Many are angry that the trading service, that you advertised as being safe, wiped out accounts and retirement assets in 2014. The home page on your current website uses terms like “peace of mind” and “won’t leave you lying awake all night.” Any investment that can lose the entire amount invested less initial premiums received is not a safe investment, especially when managed by someone who may “freeze” during stressful times…allowing the entire position to close worthless like you did in October, 2014.

Your current home page also advertises “proven track record.” Yeah, right. What you should say was "proven track record…until I manage to lose the bulk of your savings and then I will close down the service and erase all record of the dismal performance.”

Lastly, while angry about my losses with your service, I had tried to put this behind me and move on. Had I not revisited your website and seen that you had closed Yellow Condor, removing any record of the latter dismal record and then seen this blog, you would never have heard from me. The worst part is your arrogance and ability to try to attack others for simply telling the truth.

You can try to hide Yellow Condor performance results and continue to attack those who call you out, but you cannot hide from the truth. Everyone who has penned their thoughts here knows the the real story. They know what type of person you are and what you did to their investment dreams. You would have been much smarter to have just apologized to your subscribers which would have likely ended this whole sordid affair. Knowing your type, you have the inability to say you’re sorry, even when you know you’re wrong.

Spread The Trend said...

You haven't been an active subscriber since 2014 so who are you to say what we have and haven't done because you haven't been around to witness things first hand now have you!

You did provide some rather useful information in all of your postings so thank you for that and your information has been forwarded.

Sakura said...

Yeah! A nice flame war.

Thing is, SpreadTheTrend *have* removed all performance info of the Yellow Condor Service from their site. Smells fishy....

I know their results in 2014 where not so, erm, spectactular. Not sure of 2015. Maybe Derek, you can just tell us, the general audience what the performance of 2015 was? Just curious thats all.

JRaider said...

Not sure if the performance for 2015 and 2016 is anything to write home about. Just clicked the "subscribe" button on the STT webpage and got this...."There are no products available for purchase. Please come back later."

Sakura said...

Yeah, I just went there and it seams he has shut down altogether.

All pages with past performance are gone and indeed you cannot subscribe to any of his newsletters. The blue-mantanee has gone too.

I wonder if he went the same way as, say, Avant Options. Sure does look like it.

But, hey Derek, maybe you can prove me wrong? That would be something.

I do not mean to insult anybody. Just want to know what happened here.

Sakura said...

www.spreadthetrend.com is offline now....

All good things come to an end.

JRaider said...

I am hopeful that the service is indeed dead and gone and Derek will will not be causing misery to new subscribers. As a Christian, I hope that he did not inflict catastrophic damage to those who fell under his spell and I pray for those who subscribed to his service for the last several years.

I also pray that Derek can learn from this experience and come away a better person.

Fast Freddy B said...

I emailed Spread the Trend several weeks ago asking about yellow condor & they told me it was closed to new subscribers. I emailed them again last week & they responded Friday saying they closed the service down. I'm only reporting on my own email exchanges with them.

If what they've said is true which it looks like it is I don't understand what all the fuss is about regarding them removing the information from their website for a service or newsletter that no longer trades or no longer exists. I never asked about their other service but last time I checked the website said no product being offered or something to that affect. Yes the website still shows as offline for me too.

Spread The Trend said...

Spread The Trend is now officially closed and it has closed down all of its newsletters and all of its positions. I’m sure that will bring some joy to all of the “haters” on this blog.

We’ll most likely be back on here for another post so that there is no confusion and so that no further false rumors will be spread by you all. We've been well aware that most of you communicate with each other via email on a regular basis and you seem to easily get yourselves all worked up with the leadership of your cult leader “Christopher”.

JRaider said...

Once again, Derek could have taken the high road but chose to attack former subscribers and potential customers. Again, for the record, I have never communicated with a single poster to this blog and feel pretty sure no one else has either. I have no idea who Christopher is. The facts are as follows:

STT was a successful service for years. Subscribers made money. Things changed drastically in 2014 with extremely bad trades in May/June and then October. Pretty close to one half of trading assets were wiped out in the summer and, for those still trading, invested assets lost about 85% in October when three of four trades suffered total losses, less initial premiums. This is the primary reason most posters on this blog have communicated their dissatisfaction.

After suffering the large losses, the performance numbers on the STT were taken down, probably to keep future subscribers from seeing how badly the service performed in 2014. STT reviews on Investimonials and Stock Gumshoe were also ordered removed from the website by Derek.

I’m not sure how STT performed in 2015 and this year. The fact that the service was just closed down seems to indicate that it wasn’t great. I can’t believe there would be a reason to close the service if it were doing well.

Derek has never take responsibility for the huge losses he caused to his subscribers or apologized for the misery his service caused. Instead, he attacks anyone who challenges him or accusers blog posters of being the same person with an agenda of being out to get him. With the amount of money lost by the service, I’m surprised there are not dozens of other former subscribers out there willing to share their own dismal stories. If they knew about this website, I’m sure they would confirm everything posted above.

As I said before, I will pray for Derek and the former subscribers who lost money with STT. I’d like to put this behind me.

Sakura said...

Hi there. I can also confirm that I do not know any of the posters here and have never had any contact with them via email or whatever. I have just been following some of the more disreputable newsletters out there (avant options, mcto, 10pctpm, spreatthetrend et al) and were just curious what Derek had to say.

Well that is clear now. He said what he had to say. Good luck to you, Derek.

STTReviewer said...

Well said JRaider. I have never conversed with anyone else on this blog post. Why do all us former subscribers have to defend ourselves against these ridiculous accusations? STT was probably a decently successful newsletter before the 2014 time-frame. Yellow Condor/Spread the Trend was purely Iron Condor based strategy, where Derek recommended investing anywhere from 10-20+% of you account per trade. However, when you leverage large portions of your account on Iron Condors, when the market turns against you, you can lose your entire investment. That's what happened in 2014. Because of this, e-Option stopped auto-trading Spread the Trend.

Derek, realize that we are not conspiring against you. We are simply upset that you wiped out our accounts with hard earned money. Is that too hard to understand? Never have you apologized, never have you admitted that you made bad trades. Instead, you accused your own subscribers of trying to slander you.

In the end, i'm glad Spread the Trend no longer exists. It's an unfortunate circumstance, but it goes to show we should be very careful in selecting strategies and/or newsletters.

Let's all move forward and look for services and strategies that won't result in something like this.

Kim said...

I believe that one of the lessons that people should learn from this case is the risks of auto-trading. When you sign up for auto-trading, you basically authorize the newsletter to manage your money. If a newsletter is not an investment adviser, they are not licensed and not qualified to manage money - in fact, according to the SEC, it is actually illegal.

You are welcome to read my post about autotrading - https://steadyoptions.com/articles/post/steadyoptions/all-you-need-to-know-about-auto-trading-r83

Unfortunately, many people found out the hard way that giving their money to people who are not licensed and not qualified to manage money is usually not a smart move. Recent examples include Booking Alpha, Bullogic, Avant Options, Wicked Profits and now STT. All those services are now out of business.

Of course it is also a huge conflict of interest for the brokers - they are expected to honor the SEC guidelines, but you cannot seriously expect them to give up one of their biggest cash cows.

Kim Klaiman

Paratrooper Ron said...

All traders and all newsletters will have their hot streaks and their cold streaks that’s just the way it is! That’s why you’re never supposed to put all your “eggs” in one basket and you should never risk more than you can afford to lose. Granted that is often easier said than done! All you can do is learn from the past and hope you don’t repeat the same mistakes in the future.

Paratrooper Ron said...

I’ve been a long time subscriber to STT and somewhat on and off over the years but I was a subscriber for all of 2014. I traded my own account so my results may have been different than some of you. Let’s face it people aren’t coming to this blog a year and a half later to compare trading results. I’m not calling anyone on here a liar but I can honestly recall Derek and the staff of STT apologizing to all of the subscribers at least two or three times for the bad trades and poor performance in 2014. Those of you stating otherwise are incorrect when speaking about the STT Yellow Condor newsletter. Maybe you didn’t get an apology during your stay but they certainly did apologize multiple times.

I have received a couple of emails in the past from kuri**@icloud.com, some of the real characters of the email address have been hidden for security reasons, and at the bottom of the emails there was always the name Christopher. I never responded to any of them and I know I’m not the only STT subscriber to have received these emails. I did forward one of the emails to STT asking if they knew how Christopher got a hold of my email address. STT stated they had never given out or sold any subscriber email addresses but they were already aware of the emails being sent by Christopher. Though they were not sure how this Christopher acquired the email address information.

Spread The Trend said...

The misleading comments posted on this blog have been coming from two individuals in particular both of whom have not been subscribers to any Spread The Trend products since 2014. At least not under their real names they haven’t, as one of them did try to sign up under a false name after he was banned from our services.

STT did its best in trying to be as transparent and consistent as possible at all times. The closed trades’ page had always been updated only once the entire trade had been closed. If we chose to update only portions of an existing trade it would’ve been not only confusing but also potentially misleading. The folks that continue to complain about this on this blog had access to all of the trading information at the time. The information on our current open trades’ page has always been static and only reflected the opening cost basis of a position, it never attempted to mimic one’s live trading account which can change every second when the stock market is open.

STT had been wanting to wind down yellow condor and even the entire newsletter for some time and we thought we might be able to by the end of 2015. What you were seeing when we eventually removed all of the performance pages for yellow condor in early December of 2015 was the first phase in preparing to close down yellow condor. Within days or approximately one week at the most of removing the yellow condor performance pages, we then closed off the subscriptions completely for yellow condor so that nobody could join the service. During that one week or less nobody joined yellow condor and in fact the last subscriber to yellow condor was back in October.

The accusations being made, if I understand things correctly, are as if we removed the performance pages for yellow condor in an effort to somehow deceive new potential customers. Yet we had closed down yellow condor to new subscribers so nobody could join the service! The 2014 yellow condor results had in fact been visible for the entire world to see all the way until early December of 2015!

Eventually the content of yellow condor was removed from our website as the service was being wound down and closed. Then people on this blog started commenting about wiping out the mention of yellow condor on our website and rebuilding. The yellow condor content was removed because the service no longer existed and we received numerous emails from folks inquiring about yellow condor, asking if it was a new service or if it’d be opening again etc. Removing the yellow condor content helped to clear up this confusion.

One of the more frequent posters on this blog visited our website on average every 3 days or so. He visited one page in particular almost every time he visited our website. On this page of our website was a reference to possibly launching a newsletter called “Green Turtle” but that was put on our website all the way back in 2014. It certainly was not put there recently! Soon after yellow condor was closed the same process began for our other service as it too became closed to new and returning subscribers. It ended up taking until February to be able to wind down all of our positions and as you know by now the entire STT newsletter has already been completely closed.

JRaider said...

You still don’t get it, Derek. This very sad story could have ended but you continue to attack those who posted negative comments about your service. On almost all of your posts on this site, you claim that there are only one or two blog contributors using multiple aliases and that their comments are inaccurate, misleading or slanderous. You state above that the comments are coming from just two individuals, neither of them subscribers.

There are at least ten different people who have posted comments about your service and you cannot possibly know whether they were former subscribers or not. I was definitely a subscriber and your service cost me dearly. I am sure that others who have written to communicate their dissatisfaction with your service are former subscribers, also. I am also sure that if all the subscribers to your service in 2014 knew of this blog site, there would be countless other stories verifying that what has been disclosed in the many postings above are indeed true.

We could discuss your defense of your performance transparency and your decision to close down the service but I don’t think it is that important. You claim that you were planning on closing Yellow Condor for quite some time. I believe you closed it down because of the staggering losses suffered in 2014. Why close down the primary service you had run for years, leaving only the Blue Manatee service that had been open just a short time? It really doesn’t matter.

The most important message conveyed above was the dissatisfaction with the performance of your service. While Yellow Condor was initially successful, and subscribers made money, the disastrous losses in the summer and fall of 2014 pretty much wiped out all subscribers. it didn’t matter how much money was made prior, if you followed the recommendations of the service, your account lost 85-90% of it’s value in 2014. This is why the contributors to this blog are angry.

What makes it worse, and contrary to what Paratrooper Ron stated above, is that there has never been an apology or an act of accountability on Derek’s part. I personally never saw or heard an apology on any of Derek’s updates. if you think he is apologetic, read any and all of his posts above. He has shown arrogance and contempt for those posting here. He should be showing grace to those whose lives he has negatively affected, but you will not find any grace by reading his posts above.

Spread The Trend said...

We are aware of the true identities of everyone that has posted on this blog aside from two individuals. That's why we are aware of the individuals that have posted multiple times under more than one username. We are also aware of who was a subscriber and who was not.

The three most outspoken of you on this blog have the following professions. 1. Personal Injury Attorney based in Houston Texas 2. Hedge Fund Manager 3. Employed by the U.S. Department of State.

We are also well aware of your agenda's and how you've used this blog for your agenda as well. That's probably why you all have tried to stretch the truth in a big way on this blog on numerous occasions.

Sakura said...

Whoo, now I think those people are really scared.

You know all about them!

Gosh, am I lucky I am one of the two individuals you haven't figured out yet. No problem to help you out, though:
- I have never been a member of Spread The Trend (don't think I implied that eiter).
- I am a Software Developer (and of course an options trader), in a country far far away.
- I do not have any agenda with this blog, other than to entertain myself, and some basic curiosity about Spread The Trend's performance and the flame war that is going on here. I was indeed surprised you closed it down alltogether.

But nevertheless: good luck to you Derek! Seriously, all the best! And to all other posters here!

Let's keep the discussion alive!

Nancy M. said...

You can kick and scream and beat up on the newsletter all you want but everyone is ultimately responsible for their own hard earned money! Grove said something very similar on this blog and it is so true! I know a lot of people that trade multiple newsletters at one time and I do the same thing. The objective is to spread out your risk a bit more among different newsletters and among differing strategies. Unfortunately in 2016 nothing and nobody is performing well but over the long haul hopefully things will balance out! One good thing about the newsletter industry is the subscriber ultimately has the control whether they auto trade or not. You always get to see the trades play out in real time and sometimes you even get to see a preview before the actual trade is presented. Worst case scenario is the trade comes out and you don’t like it you can simply execute a closing order immediately. Newsletters are a great tool when used properly. In a mutual fund or a hedge fund you have zero control and you don’t know what's been going on in your account until weeks or months later when you get your monthly or quarterly statement. The only control you have with a fund is the ability to give so many days’ notice that you’d like some or all of your money back.

JRaider said...

Once again, you are absolutely incorrect, Derek. I am certainly one of the primary posters on this blog and I am not an attorney, not a hedge fund manager and not employed by the US government. I have no agenda other than to call you out for the dismal performance at STT, which you have worked hard to either try to hide or just fail to discuss and for showing utter contempt for anyone who posted anything negative about your or your service.

You have hidden the performance results by making them unavailable well before closing down the service and by having Stock Gumshoe and Investimonials remove all subscriber reviews from their website. I was personally told by the staff at Investimonials that you requested all reviews to be removed by them. It is laughable that you never discuss the performance of your service when leaving comments…you just attack the messengers.

Not sure about your “We are aware…’ posted above. The STT service was primarily a one man operation. Who are the “we?” You used to have an administrative assistant, Neal, but have been working alone for quite a while. You have worked with web developers to improve your web site in the past but I’d like to know who the rest of the operation is.

I’d also like to know about the mysterious agenda that these mystery posters you mention above have? Tell us how the truth has been stretched in a big way. I have always said your service did well for the first year I subscribed, you had a disastrous 2014 that cost most subscribers close to 85% of invested money, you seemed to try to hide your performance numbers later on (discussed above) and that you are callous and non-apologetic to anyone posting on this site.

I do know that if I were you and had wiped out as many subscribers as you had using your service, I would have been utterly devastated and would never have expended as much time and energy as you have trying to defend myself and attacking those who have just posted the truth. I don’t know how you can live with yourself.

Spread The Trend said...

Good bye JRaider, I'd call you by your real name but you'll just lie and say that's not you. Best of luck with that other newsletter you subscribe to!
P.S. I specifically said the U.S. Department of State.

Nancy M. said...

Just a word of caution to everyone please be very careful. I've been doing a lot of reading lately and many prominent people are giving some very strong warnings of a major melt down in all stock markets very soon! It may be major enough that any hedges or protection won't help enough.

Roger McFadden said...

I’m reading through these posts for the first time and I would have to agree with Spread the Trend that it would appear to me that some folks on here certainly are up to something or have some agenda up their sleeve!!

I was considering subscribing to their Blue Manatee service a while back and I visited their website frequently. I’m one of those that likes to read everything I can get my hands on so I probably read through their entire site atleast 3 times.

I would have to say that the dates Spread the Trend has provided in terms of removing any performance data from their website jive exactly with how I remember it. Take that for what’s it worth but just thought I’d provide own my 2 cents.

Spread The Trend said...

Thanks for your comments Roger, much appreciated!

Spread The Trend said...

Regarding Nancy's most recent comment yes I agree very much with what you're saying. At some point probably within the next 12 months or so anyone involved in our stock markets stand a greater risk of being completely decimated. We appear to be building up towards another very large bubble and it's just a matter of time until it bursts! That's in fact one of the major reasons we decided to shut down our newsletter.

Roger McFadden said...

Mr. Klaiman never seems to miss an opportunity to self promote his website! As things currently stand there isn't anything illegal about an unlicensed newsletter engaging in auto trading. It might be illegal if they were to engage in managed accounts but not for regular auto trading. There are a couple of loopholes that the brokers have found that makes it legal but these loopholes will probably be closed at some point forcing all newsletters to become licensed.

The disclaimer from the SEC is basically stating that they recommend that an individual choose a licensed newsletter to auto trade with. At this time that only leaves a handful of newsletters at the most to choose from as the majority are not licensed. If it was truly illegal the SEC would've shut down auto trading altogether for any newsletter that is not licensed.

Mr. Klaiman is partnered up with a third party that is licensed so he's just trying to drive more traffic to his website. One thing people should know about managed accounts is it's more lucrative for the newsletter so that's why many are moving into managed accounts. Option Smart did the same thing a while back. They realized they could make more money through managed accounts and hedge funds so they closed down the newsletter side of their business. If an individual has a larger trading account the newsletter stands to make more money versus the standard subscription model. It's probably also easier for the newsletter to trade under the managed accounts model for various reasons.

Regardless you will see many newsletters shut down over the next year or two. The days of new newsletters popping up left and right are most likely behind us now!

Roger McFadden said...

I'm not sure how some of the the traders and newsletters on these websites are able to avoid being licensed or registered with how they go about trading such as Collective 2, Ditto Trade, Benzinga, and Marketfy. Maybe there are even more out there?

As far as the newsletters that are listed with various brokerage firms I don't believe they are doing anything illegal. It has to do with how the trades are executed from what I've been told.

Thinkorswim had, or maybe still has, a feature where you can link your account to someone else and trades will be executed based on what that someone else does. That someone else doesn't have to be licensed or registered. For now they've found loopholes apparently but I'd imagine pretty soon those loopholes will no longer exist.

Kim said...

Dear Roger,

The SEC is very clear in what they say:

"Generally, the SEC considers firms that publish investment newsletters and that also engage in “auto-trading” to be investment advisers. If you cannot find proof that the firm is registered as an investment adviser, please let us know by using our online Center for Complaints and Enforcement Tips."


In fact, there are dozens lawsuits filed each year by the SEC against newsletters who are not licensed. I guess at this point they just don't consider it high priority to shut down all of them.

btw, OptionsHouse already discontinued their auto trading program. I assume this is just the beginning.

Managed accounts are EXACTLY the same as auto-trading. In both cases you give someone full control over your account. They can execute trades and do whatever they want in your account. The only difference is the compensation structure. Saying that managed accounts is more lucrative is not necessarily accurate. If a newsletter charges $1,500/year subscription fee, and 2%/year in managed account, you need account greater than $70,000 to make more money from managed accounts. Percentage of potential clients with accounts greater than 70k is relatively small, most newsletter members have accounts in 20-30k range or even less.

As for your comment about me promoting my website - I don't really need to. We are running at full capacity for a while, and are closed to new members. I'm just trying to warn people about the risks of auto-trading, as it seems that most people are not really aware of the risks. Many Ways To trade was the latest example of newsletter that has lost over 80% of the clients accounts.

Roger McFadden said...

Dear Kim,

Managed accounts is a newer concept to me so I'll admit I don't understand them completely so if you could kindly answer my question when you have a chance?

Are you saying that if one of your customers that is in a managed accounts service wanted to immediately close a trade that was entered by your managed accounts service they could do so entirely on their own?

In other words they would not have to contact your company to get permission or would not have to ask your company to execute the closing trade on their behalf?

They could just call their broker or log in to their online platform and execute the closing trade right away completely on their own without needing permission or needing to notify anyone ahead of time?

Thanks in advance and I look forward to having a better understanding about this aspect of managed accounts.

Kim said...

Here is a good description of managed accounts - https://steadyoptions.com/forum/topic/1664-managed-accounts/

If you are familiar with auto-trading - as I mentioned, Managed accounts are EXACTLY the same as auto-trading. Typically, a customer does NOT have access to their account to execute trades, only to see the balance and the positions (unless agreed otherwise between the customer and the account manager). Of course they can always contact the manager and ask to close one or all trades, but they usually cannot do it directly by placing an order with the broker.

This arrangement is to prevent situations where both the customer and the manager will try to close the trade at the same time, causing unexpected results.

Except for the compensation, another difference between managed accounts and auto-trading is how the trades are executed. In managed account, the manager executes the trades by himself. In auto-trading, he send the trade to the broker for execution. This is another risk of auto-trading. What if the markets starts to move fast? Will his broker get the email with trade instructions fast enough? What if the prices are significantly different by the time the broker tries to place an order?

In managed account, those risks don't exist.

Aftab Khan said...

Seems the "Spread The Trend" Website is down for maintenance or other ---
I have tried to get to site using www.spreadthetrend.com but does not work.
Could anyone let me know when the site will become active?

Sakura said...

To Aftab Khan: please read the posts above. Derek, the former owner of Spread The Trend has written several times the site is closed down. It will not open again due to heavy, heavy losses. Although Derek claims one of the major reasons for closing down is his fear the stock market will burst soon. Whatever...

Aftab Khan said...

Thanks Very Much Sakura for the information ---

Best ---