Best Stock Strategy with David Jaffee
***Warning*** If you purchase this product, TradingSchools.Org will receive an affiliate commission of $7.60. Factor this into your decision-making process!
David Jaffee of Best Stock Strategy is a very successful stock options trader. TradingSchools.Org authenticated superb results spanning multiple years with actual brokerage statements.
He is also offering an options trading signal service, and an educational product. The pricing is expensive. But the product and accompanying interaction with Mr. Jaffee is priceless. He goes the extra mile to help newbies understand his method, and works extraordinarily hard at providing a top tier advisory.
TradingSchools.Org put Mr. Jaffee through a very difficult, one-year performance test, and Mr. Jaffee performed beyond our expectations.
Additionally, Mr. Jaffee has other intangible qualities, which include prior experience as an investment banker and economist at well known CIBC World Markets.
Yes, we recommend the product and the service. His investment approach is unique, battle-tested, and focuses on highly repeatable processes that most students should be able to synthesize within 6-months.
Patient and kind teacher
Solid approach to investing
Focuses only on high liquidity large-cap stock options
A highly entrepreneurial person with excellent adaptability
Do not expect to learn everything overnight
Significant capital is required
A few personal “dings”
Part I of our review of David Jaffee’s “Best Stock Strategy” Options trading school covered the individual investment performance of David Jaffee over several years.
Additionally, we detailed who is David Jaffee, his relevant life history related to investing, his work experiences, personal successes and failures, and a general overview of “who is this guy.”
I highly recommend that you read Part I of the review, this will provide context.
Part II, we will finish this review by detailing his investment style and all of the “nooks and crannies” of useful information that I observed while watching him trade over the previous year.
In short, Part II is “The secret sauce.”
What I don’t like.
First, let me start off by saying what I clearly do not like about Best Stock Strategy and David Jaffee.
On the Best Stock Strategy website, it states “You’ll learn the absolute best trading strategy; it only takes 2 – 3 weeks to acquire this valuable skill.” This statement is complete and total hogwash.
In fact, it’s just shitty marketing. The truth is that after watching David Jaffee trade over a long period of time, it became readily apparent to me that there is a huge amount of work, nuance, and effort that goes into his investment strategy.
Additionally, Mr. Jaffee is hyper-focused on what is happening with the overall market, as well as the individual companies that he tracks. He calls the individual companies that he tracks as “market leaders.”
Market leaders and their “perfect price”
Most people think of a current market leader as either Facebook, Amazon, Netflix, or Google.
However, David Jaffee takes it to a whole new level and considers a “market leader” as the largest capitalized stocks within each individualized sector.
Remember in Part II of the review, we talked about how David “tears the balance sheets of companies apart” to discover their intrinsic value. He used these models as an investment banker.
Now, you would also naturally assume that David also takes that same approach to analyzing publicly traded companies to make decisions regarding short term speculation. However, I found this not to be true. Which was actually very surprising to me.
According to David, “With large-cap stocks, you don’t have to worry (as much) about little bits of hidden or surprising information. These large-cap stocks are analyzed minute by minute, by the smartest people on the planet.” In short, with a large-cap stock, the current price of the stock reflects all of the available public information, therefore there is no need to read research reports or compete on information.
Think about that a moment. David Jaffee, a guy that spent years as an investment banker tearing apart companies is telling us that there is no need to do deep-dive analysis, or any research at all, on large-cap stocks!
Additionally, as he explained, “to be successful at trading options on large caps, at least on a short term basis, you need to focus on the trading range of the underlying stock, the volatility index and identifying underlyings that are overextended in price on a temporary basis – then by selling premium, you’re able to profit from the time decay and the fact that the actual move is almost less than the expected move.”
What does that even mean? Let me explain.
Options buyers are usually wrong
As David explained, and as his personal trading performance reveals, his core trading philosophy is that “selling premium on liquid market leaders that are overextended in price will yield large profits and a high win rate.”
What David does is he is hyperfocused on ~15 companies and knows their recent trading range, then if one of those underlyings makes a short-term move outside that range, he will sell a call or put option AFTER a stock has experienced a shocking move, expecting the stock to revert back to its recent trading range.
Example: if a large cap stock suddenly bolts higher, then the unsophisticated market participants will naturally attempt to chase the rally. But since David believes that this move is likely caused by a short-term overreaction, then the price will usually pull back and establish a new range.
For example, in June and July of 2020, TSLA increased in price from $950 to ~$1750, David recognized that this move was irrational, and fueled by emotion, so he sold out of the money call options on TSLA and did very well. He as actually WRONG on TSLA, because it continued to increase in price, but because he afforded himself a large safety net, and waited until AFTER the stock’s large move higher, he ended up making a large profit.
David mentioned, “Small investors that buy options are always net losers. They always chase. They always gamble. And they always hope that price continues in one direction. And, perhaps most important, they are fighting time decay. Not only do they have to be right directionally, but the magnitude of the move must exceed the expected move, which rarely happens. Rationally speaking, no one buys car insurance or health insurance to get rich. Yet investors are buying insurance expecting to make money? In reality, the ones making money are the insurance companies, and by selling calls and puts, you’re turning yourself into an insurance company.”
But we all know that the stock market is a “trick factory.”
But what happens if a stock keeps running?
Many readers are probably thinking, “Yeah, but sometimes the market gets crazy and just keeps on moving higher or lower, and options sellers get burned!”
This is true. Sometimes options sellers do get burned. However, I got the full Jaffee option seller experience during the market turmoil of February – March 2020. I got to see how he handled it.
And what did I see? As Put option prices and premiums went through the ceiling — Jaffee was only too willing to sell expensive options.
Additionally, during this period, Jaffee was selling vertical credit spreads, so even if the market continued to crash, his maximum loss was already defined.
As market participants were declaring the end of capitalism, that the stock market would crash to zero, that stocks were worthless. David Jaffee managed his positions, remained patient, and did reasonably well.
Here we are a few months later, and the stock market is once again threatening new highs. A few months from now, we will have an election, and the same crazy behavior may once again resurface. People will be declaring the end of the world, and options prices may spike…but sitting in the quiet corner will be David Jaffee, patiently waiting and selling puts and calls to the uninformed and the blatantly ignorant.
The Jaffee Insurance Company
Before I drafted this review, I asked David a few very pointed questions. My first question was, “how would you describe your trading style?”
David replied, “Look, this is not very difficult. I don’t use any trading indicators and fancy accounting that I used in investment banking. In fact, the best way to describe my trading is that of an insurance company. I basically wait for overextended moves in the largest companies, then sell out of the money strikes. And while I win almost all my trades, I always make sure that if I’m wrong, then I can easily manage the position.” “
We all know that insurance companies make their money by collecting premiums. That’s all David Jaffee is doing — he is collecting premiums. As David explained, “My goal is to collect premiums and make consistent money. Yes, sometimes I get caught and lose, just like every insurance business — but that’s extremely rare. And as long as I’m trading small enough, then the losses are negligible.”
However, as David explained, “The insurance company, in the long run always wins.”
David was also adamant that “nuance” is vital in trading. People can replicate his strategy, but they may not make the same decisions. They may trade too large, not choose the right strikes, manage a position at the wrong time, enter a position too soon, etc.
These types of “nuance” decisions can have massive effects on a portfolio’s performance – and it’s this type of expertise that many of his students pay for.
If you make so much money, then why sell a course?
Isn’t this a relevant question? I mean really, if you were making nice bank selling options, then why be a skanky seller of courses and advisory services?
David replied very candidly, “I do this for three reasons. Number one, the money is good. I am selling a product, which is my unique knowledge and skills, I saw many people selling garbage so I wanted to teach people a valuable skill. My time is valuable and my students make money, so it would be foolish for me to not charge for it. The second reason is that I don’t win all the time. During periods of extremely violent moves, I usually show a temporary loss until prices normalize. By selling a course and trade alerts, that income helps normalize some of the portfolio volatility. Finally, I only make a few trades a week, and prior to starting BestStockStrategy.com, I was very bored. I actually enjoy the student interaction and I enjoy running the business.”
He has valid points.
With the rampant scams in the industry, being a “stock coach” surely smelled like a dog fart. He went on to say, “I really enjoy the kind emails that I receive from my students. I get a lot of hate on YouTube because I criticize fake gurus, but I know for a fact that I have changed the lives of many of the people that learned from me and I genuinely believe that I teach the absolute best trading system available for retail traders.”
OK, its a dog fart answer. But I will go with it.
Wrapping things up
First, I want to say thanks to David Jaffee being so honest and open about everything. He went the extra mile to provide TradingSchools.Org with documents and related materials that prove his investment performance, life story, and underlying theories for successful options trading.
He opened up his entire life to my wicked pen. And let’s be honest, my pen is pretty nasty and oppressive. It took a lot of courage and faith. And he knew, upfront that I was going to publish every bad thing I could find. Which I did. Every wart is here.
And finally, I wanted to give my honest opinion about whether you can really “be successful in 2-3 weeks.” Obviously, this is not true.
But what is true? For the layperson, that knows absolutely nothing about trading stock options, I believe that you will need to dedicate 6-months of steady interaction with David Jaffee in order to fully grasp and learn what he is teaching. There is a lot of nuance involved in trading options, yet for those who are committed, then they will learn a valuable trading strategy that is consistently profitable.
However, you will need to be exposed to more than just a few weeks of isolated market conditions. You will need to be exposed and have your hand held through some sort of market turmoil. Six months of commitment (and the cost of doing so) should be part of your calculus.
Additionally, I recommend that you avoid using a simulator for stock options trading. Why? A simulator never reflects the actual bid/ask spreads in real markets. A simulator is a waste of time. In fact, it will only give you a false sense of security.
With Jaffee, you will need to arrive ready, with capital ready to deploy. Don’t show up with your plastic gun. Show up with your rifle and be ready to start pulling the trigger on small trades with very limited potential losses.
Thanks for reading. Best of luck.
I would like to know your top choices for day trading courses. Since you have reviews so many.
David’s method involves lots of risk of downside “black swan” events. You risk a lot for a potentially small gain. I was tempted to try his service for a month until I came across Ernie Veratimos at 0-dte.com. With Ernie’s method, you risk a small amount for a potentially much larger profit. With David’s method you can experience financial ruin. With Ernie’s method, a loss is small.
With David’s method you won’t be able to sleep well at night either because of the risk involved.
So how are you doing with Ernie’s method so far? Just curious. Thanks.
I’ve been a member of David Jaffee’s alerts for 2021and he won almost every single trade with very little drawdowns.
I don’t think you understand about 0DTE.
With 0DTE, you’re risking a ton of money for a tiny bit of premium.
There is a reason why experienced, researched-based, companies like Tastytrade and hedge funds would never touch 0DTE.
And the reason is, it’s only a matter of time until you lose all your money.
Don’t believe me? Email Tom and Tony from Tastytrade and ask them about 0DTE.
You’re playing with fire.
All of the beststockstrategy’s trade alerts are posted on YouTube.
And, also, in hindsight, I actually should have voluntarily gotten assigned on his positions, because his initial strikes were so far out of the money that had I held the stock, I’d have made a ton of money from having the stock going up in value.
With 0DTE, it’s all cash settled, so there is no upside participation.
Thanks for the comment Cesar. Though I must admit, I have no idea what “0DTE” actually means.
0DTE means that you sell options that expire the same day.
It’s usually done on the S&P, such as the SPX or SPY.
It’s definitely not a horrible strategy, as the traders are selling premium – but I believe that there are significantly better strategies available.
The issue is that you’re limited in the amount of premium you collect due to the large buying power usage and you don’t really have much opportunity to fix the position if you’re wrong.
You’re basically saying, “actual volatility is almost always less than expected, but if the market moves significantly that day, then I’m going to be forced to accept a large loss.”
A trader needs to sell a strike pretty close to the current market price of the stock to collect any worthwhile premium.
When I tried it, I constantly had to watch my phone all the time for fear that the trade would go against me.
It’s basically like a car insurance company selling daily insurance and as long as you don’t get into an accident, then they make money.
There’s a reason why car insurance companies don’t do this.
Just like there’s a reason why if you walk into a casino in Vegas and put $10 million on one roulette spin, they will not accept your bet.
Overall, selling 0DTE is not necessary “gambling” as the probability of profit is positive.
But, I don’t know anyone who has actually done it long-term.
There is no way to be wrong and fix the trade and make money.
When I tried 0DTE, I got burned out, lost money and gravitated towards lower-risk strategies.
I would encourage anyone who’s curious about 0DTE to email Tom or Tony from tastytrade and ask them their thoughts about it.
I’m almost positive that they will reply and tell you that you’re “playing with fire” due to an inability to repair and fix a trade that moves beyond its expected range..
This is true, i used to trade Earnings release and SPX/SPY with 0 or low DTE, i thought the volatility wont be that great, so i expect the options to be worthless in a few days or on that day. Huge mistake, paid money to learn that lesson.
I had something happen and requested a refund from David Jaffee and he accommodated me without any issues.
I appreciated that because he was prompt and courteous.
I’ve joined David alerts 2 months ago.
The first thing I can say and this is not something new for most of us, there’s no way that you can follow him with an account of 5000$.
Personally, I have a 30k account and I feel that it’s still the ‘minimum’ that you would need. Even tho at that level, I can follow just a few of the alerts. I basically stay away from the AMZN alerts that are taking over 15k in BP.
What about the results up to now?
Well, the first month I did a 4.2% return. Pretty nice! I was impressed. You then remove the 349.. but eww..
You can clearly see that this guy knows what he is doing. No doubt about that BUT this is not rocket science. He sells puts when we are on the lower range, that’s pretty much it.
A week or 2 ago, he called a TSLA call position at 880 if I remember well. That stock went up 20% in less than 3 days. So, the 880 calls got challenge pretty hard. Where is the issue? Well, if you don’t have enough money in your margin account even tho I kept over 50%+ available, your margin requirement will be so low that you will get a margin call OR you will need to roll it with a higher strike (which I did). I rolled it to the week after at a 920 call. What happened after? Well TSLA continued to go higher. I had to roll again. This time, I rolled it to the 1000 call (2 weeks later on the option chain). I had no choice because I would have encountered a debit.
On the other hand, this is not what David did. He waited until Friday, even tho that this call was in the money and he rolled it to a PUT position in March 2021. At the end of last week, he rolled it back to February to a higher strike to reduce the wait. But what would have happened if the stock would have decided to start going down? He would have reversed the position again to a Call and a longer duration?
Last thing ‘bad’ that I have to say is maybe that he is way too early in trades. For instance, the stock market opens with a gap down on FB. Even tho that the stock is at the low of the range, he is not waiting to see if the stock is going to reverse, and often it just moves all day long with the direction of the gap. He even says often in the WhatsApp group that he took the position early.
when I look at my portfolio, I had a drawdown of 8% at a certain point in the month. This is not good.
This is what I have to say for now.
Still using his alerts.. Is it worth the money? In my opinion, I don’t think so. Is he a good options trader? I believe he is.
To wrap this up, follow David if you have a big account. Or else, be very careful with what alerts you take
Your comments are excellent. You sum up my feelings perfectly. If you have a large account, then you can possibly earn a positive return. But a small account? Not so much.
My best recommendation, if you are either a large OR small account, then try and get in and learn as much as possible, then quickly drop out.
The real “opportunity” with David is to “get close to the fire” and learn as much as you can, from a professional trader, and then take that information and make it your own.
Thanks again for your comment.
Hi Emmett, yes exactly. What he does is not rocket science. You just need to be patient to get to the high or low of the range and take a call or put position OTM with a low probability. I still like seeing what he does when he gets ‘challenge’. Very interesting
Can you comment not the course if you know about options already? Does he go into details about entries and exits, position size, trade management, and all the details regarding trade selection? I was thinking about trying out the alerts program only if a good experience with options is enough to jump in, follow and learn. Thanks.
Well, you need to know at least the basics about ‘rolling’ or naked options or even how to manage it. If you have no clue about it, Youtube is there to help. Regarding the alerts, he gives the most details he can. I have a friend that joined too with less experience and he makes money every single month. So, I believe it’s good. The only thing is the capital needed. Make sure you have AT LEAST 15k to trade. I don’t believe under 10k that you can make money. WHY ?? Because as soon you will get a position that will be challenged, you will need to roll it way too early, and it’s not good. You need the extrinsic value to decay as much as possible. Hope that answered the question
If you have a position move against you 20% in 3 days, yet are only down 8%, isn’t that good?
You made ~$1200 in a month yet don’t want to pay $350?
I’d happily trade $350 for $1200.
I think the bigger question is, how often do those TSLA calls happen?
Has it happened 1 or 2x in your 2 months, or is it a weekly issue where your trades are challenged?
It seems like a determining factor will be the number of contracts that a trader takes, as opposed to the bad luck that one specific trade encountered.
I’m not that experienced, but I’ve had a few trades go against me and to have a trade move 20% in ~3 days yet still make money from it seems like a good trader..
Don’t get me wrong, David clearly knows what he is doing. He is not a scammer like most of the guys out there selling a service (get rich with 500$…).
What happened with TSLA happened with SNOW as well in the past 2 months. One other stock as well that I can’t remember the ticker(i didn’t take that alert). SNOW got challenged big time BUT David was able to manage this pretty quickly. Again, you needed a larger account to do what he did. There’s no way in the world that you can manage positions with a 30k account. Sometimes you see him rolling a position and at the same time increasing the size. Can you buy 3x naked AMZN? Not me. Even with vertical spreads, it was impossible because you would have encountered a debit on the roll itself.
Hope that answers your question.
But the thing is, do I recommend him? For sure! Do I recommend that you stay with him for several months? No. As Emmett said, take the education you can from him and run away. I feel he would get way more customers lowering the price a bit. I’m not saying that it should be free, but somewhere around 249$, a month would be enough IMO.
Yes, that makes sense.
Thanks for the updated comment, it helped clarify the issue for me.
Are you with David alerts ?
I’m not, but I took his trial and liked it more than I thought I would and was thinking of rejoining the monthly.
I just felt that your comment was a bit harsh because you knew the price upon enrolling yet then seemed disappointed after making $1,000 and making money from every trade.
It actually makes me feel like an idiot for cancelling because I have done much worse over the past 2 months since I cancelled.
I need to figure out my sizing better.
The idea was not to be harsh about it tho. I won’t complain about the income. Just my thoughts that it is a bit expensive. Think about it, a third of my income was sent to him. I just feel that it’s a bit too expensive for what it’s worth.
But knowing what I know today, I would have felt way more comfortable and it would have made way more sense to have a larger account and continue to follow the alerts
Yes, I understand. And with the clarity you’ve provided, I agree with you.
I’ve tried other trading services and they were complete scams.
With this guy, I was pleasantly surprised (even though I cancelled).
So I just wanted to share my thoughts because in an industry filled with fraudsters, I think it’s important to give credit to those who are genuinely trying to help traders.
@Emmett, you have once again been scammed by a So Called “Profitable” Trader.
I emailed David Jaffee and asked the most basic questions to see if he is “Truly” profitable and if he is being transparent.
In return, David Jaffee who does reviews of other traders and states 99.7% of traders out there are con artist, responded with just ANGER and Nonsense.
David’s reviewing of other traders and calling them con artist is a brilliant scammer’s trick to make himself look legit and honest; the defender of the little guy. How many other scammers such Dr. Dean have we seen do this exact same trick.
So let’s look at what I emailed David and his response.
I watched David’s videos and notice the alerts he sent out are only after he has entered the order and was filled. Remember these are options, which can have a large bid ask spread.
So I asked David about this and I also asked David if he show his brokerage statements on a regular basis, whether it be daily, weekly or monthly to provide proof he is live trading. This is the only way you can tell if a trader is truly legit.
The response I got from David, who has repeatedly called out other traders for front running, screams Scammer!!!!
In fact Mr. Jaffee has called out Steven Dux, who you gave 3.8 stars, as a scammer who front runs his students.
Below are his email response to me and my comments regarding his response.
First David stated he is trading companies like Amazon, which are trillion dollar company, so it does not matter that he is front running.
The problem is David is not trading the underlying stock, but the options which do not have the volume as the underlying stock and then sending that trade (which he already got a fill) out to who knows how many students. 100s of student’s executing that option trade absolutely will affect one’s ability to get the same fill and
David knows this.
I have a simple question, “if David really thinks his front running has no effect then why does he need to do it?” After all he says it doesn’t affect anything; so stop doing it. Send out the Trade Alerts so everyone is on equal footing before you execute the trade.
Front running other traders’ is 100% Not honest and transparent and Emmett you should be ashamed to be part of such a Scam!
Regarding my question about showing his Brokerage Statement to his followers on a regular basis to show legitimacy and transparency, he refused to even answer that question.
Instead David made the following emotional Con Artist 101 statements that tell you absolutely nothing:
1) My students are happy to be members and
2) My students get substantially better fills than I do
And then David states I am a bad fit and he does not want someone
that dares to question him as a member.
Seriously @Emmett want honest trader who has nothing to hide makes such an irrational statement when asked the most basic questions about being transparent.
@Emmett, there should be some basic 101 Rules before you give someone 4.8 Stars and 3 of them are:
1) The trader must NEVER Front Run their Trade Alerts,
2) The Trader must show their live trades and results on a regular basis. This is the only way one can verify if the trader is scamming or not. We have seen way too many times these scammer leave off a losing trade here and there and it does not take a whole lot to make a losing trader look like a winning trader,
3) Finally the trader must state the trades he showed were LIVE not sim or hypothetical results. And if he is claiming live results when they are not the student can then complain to the proper regulatory authorities.
I’m in his WhatsApp group right now. Looking at the posts, on Wednesday he shorted the TSLA 10/23 620 calls for $2.05/share at 12:32 PM. Looking at my own brokerage, I able to get filled at $2.14/share at 12:3:47. Then he closed this same trade today at 11:59PM for $0.90/share; I was filled at $0.92/share immediately. The fills for simple opening/closing trades are quite close to what I get. I’m sure I could get better fills if I had more patience, but I don’t.
Losing trades; yes he does have them. On October 1, he shorted PTON 10/23 135 calls for $0.71/share. I was able to get filled at the exact same $0.71/share.
As PTON approached the short strike on Wednesday, this was rolled into a PTON 10/23 140 call and a PTON 10/23 121 put for $0.03 credit; I could only fill at $0.15 debit.
Then, this morning, as PTON continued to rise, he rolled the previous positions into a 10/23 PTON 142 call and a 10/23 PTON 128 put for $0.06 credit. I was able to get filled at $0.05 credit.
Then later today as the market sold off, PTON was approaching the short put strike. The position was rolled into a PTON 10/23 141 call and a PTON 10/30 123 put for $0.01 credit. I was filled at $0.01 debit.
Look, I’m not affiliated with Jaffee in any way. I am just the messenger. Jaffee has literally not lost a single trade in the time I’ve watched him, starting in August. Emmett has said similar things in his article. The only two that have come close is a TSLA trade and the above PTON trade, which are rolled until they expire worthless. He’s been upfront about these and today even admitted he rolled the PTON too early, getting whipsawed around by the market. There’s a lot of con artists out there, but I don’t think David is one of them.
Thanks for taking the time to write this comment. I know it took you a while to write this — and it’s full of useful information.
I had/have two concerns regarding Mr. Jaffee…
Number One: Can the students actually get filled at the prices that Mr. Jaffee alerts? Your comment gives prospective customers a window into this concern. It sounds like the fills are close, but not exact or precise.
Number Two: Can a student with a small account realistically earn a profit once the $349 fee is factored into the net profit and loss? Once again, you address this by estimating a student would need at least $25k to trade the current style. But I find it hard to believe that any student would be able to recover the $349 through actual trading profits. In my article, I stated as much.
So what is the correct approach for a prospective student to take? In my opinion, if a student makes the investment in Best Stock Strategy, they would need to “get in quick” and learn as much as possible about his core methods, and then “get out quick” and hope the knowledge can be applied going forward.
Surely, at some point Mr. Jaffee is going to hit a brick wall and performance will suffer over an extended period of time. This happens to everyone. What I am really interested in learning is how the students fared during times of underperformance. And how did Mr. Jaffee handle those interactions during drawdown and high stress?
Not that I am hoping for failure, but we learn much more about the character and performance during high stress situations. It’s my hope that you will follow up later and give us a post mortem. Nobody likes to talk about losses, but periods of losses are the real “meat on the bone.”
Hope to read your comments in the future. Especially the negative comments as these are the most valuable.
It’s been almost a year (10 months) since I signed up for this product. I’ve been very pleased with the service.
I’ve had nearly identical fills as the order screenshots he posts to WhatsApp. It should be noted that due to work-from-home I’m at my computer all day, so I can submit my orders minutes after he sends them. I’m not sure how this arrangement will continue when I go back to the office, but this is a criticism of most live alert groups.
As for small accounts, I personally started a $10k in April to see what live returns I can get with the $349/mo fee in mind. It’s only been two months so this may not be accurate, but I’ve been able to earn $954 so far. After fees that’s $256. With these numbers in mind, I’d say the minimum account size is ~$20k to match S&P performance after fees. Keep in mind this was only a 2 month period, so the $20k might as well be arbiturary.
On a more trading-related level, David’s bread and butter are AMZN and TSLA. I have trouble following these trades on my small account even when he gives the spread version. However, he does often sprinkle in trades on lower-priced stocks like UBER, SQ, FVRR, etc, most likely specifically done for those with small accounts. My small account mainly traded these smaller companies, plus one TSLA 520/470 put spread.
Some criticism I have is that if David sells a naked option and throws in a spread version as a side note, the spread version will not be cared for in subsequent managing trades. Only the naked management trades will be screenshotted and sent to WhatsApp. You need to know how to translate the naked roll into a spread roll. Something to keep in mind for beginners.
Also, there are occasionally some trades done with portfolio margin considerations which not everyone may have access to.
The way David navigated the recent 2021 tech selloff has been quite relaxing to me. The available buying power in my account always stayed at a healthy level due to his trade management style, despite mostly trading stocks heavily affected (TSLA). After ~1.5 months of initial drawdown, the losses have been recovered and more. All in all, I’m still waiting for another Mar2020 to really see how David performs in truly catastrophic times as I wasn’t a part of the group back in Mar2020.
Thank you so very, very much for writing this comment. Let me explain why…
Whenever I write a positive review, I am always worried that it’s going to blow up in my face! So even slightly positive commentary, like you have posted means a lot to me.
Another thing, this site is not a propaganda review website like North Korea Trustpilot where you pay $5k per year to shadow ban negative reviews, and prospective customers only see “Dear Leader” be adored by throngs of positive material. At TradingSchools, you get everything…all the dirt. Even the dirt on me is on full display. Nothing is censured.
I told David when I wrote the positive review, I said “Look, you are going to get hit with a wall of ugly so be prepared because your flaws will be exposed.” But thus far, he has handled the criticism and critique surprisingly well.
Please keep writing about your experiences Derek, the material is invaluable. You are on the front line where the bullets are whizzing by, so prospective customers need to know the TRUTH of how ugly things can possibly be.
Derek, how did you do over the past week? Did you get crushed? Last week of October 2020.
Emmett, I appreciate the work you do. There is a person on Youtube that does similar work. I’d love to see both of you work together. Here’s a link to a video he made on Jaffee. I think others will also find it insightful. It is about a trade that has gone against Jaffee massively and how he manages it into profit.
How many is the maximum notionnal leverage of David ?
I joined Jaffee’s WhatsApp group on August 6, 2020. Two weeks before this post. I have been pleasantly surprised. Lots of winners shorting both calls and puts. Two losers that were rolled into a win. Having a large account is important. A recent trade on AMZN ate up $60k buying power alone. (On Aug31, sold 2 AMZN Sep-11-20 4150 calls @$4.75/share, closed on Spet4 @0.80/share).
For anyone curious, he’s traded these symbols since I joined:
GOOG, NFLX, LMT, MCD, BA, PYPL, AMZN, NVDA, FB, MSFT, JPM, AAPL, V, UNH, and TSLA.
How big of an account do you need to trade with him?
I don’t really know. As Emmett said, David has done small account challenges before. However, I don’t know if you can follow him with a small account profitably since his service charges $349/month
I personally trade with $250k. I estimate a $25k account is required to trade his current style, but again it is just a guess. He posts the naked short he does, along with a long strike if you want to do a credit spread.
A lot of build up for a guy selling options in a bull market. Love the laugh about T/A– and then he says that’s basically what he uses– because who in their right mind believes anyone could use anything else for short term trading? For those not in the know– selling options is high winning percent game in bull market. It would be pretty difficult to determine if anyone had an edge in that game.
I doubt such education would be worth very much. I can only imagine what Dr. Dean will think about this one.
Why don’t you take a look at Dan Parker? He’s got a track record on his site, real day trading, but would not send proof when I requested.
Dan Parker, oh yeah…I am working on that one. The guy is everywhere on YouTube. Must be spending a fortune on ads.
I thought the same thing…that anyone can make money in a bull market. However, I got to see David operate in two very scary situations: 1)Covid sell-off and 2) Tesla melt-up.
I still cannot figure out how he navigated that Tesla trade. That took amazing skill. So many really smart people got short squeezed and were forced to capitulate…but Jaffee kept his head and even without a Tesla pullback, he was profitable when as it simply flattened out.
There is no way you can teach that sort of maneuver overnight, or even with a few months of training. You would have to train over various regimes AND have natural skills. It’s that fucking nuance that Jaffee has. It’s that damn nuance when the pressure is peaked.
Looks pretty dangerous for new traders, like collecting pennies in front of a steam roller… Selling naked puts or calls has a potentially unlimited downside…
This. The old scrambling about, collecting nickels in front of a bulldozer. Exactly what I felt when I saw Jaffee’s seeming to be using the same old risky options plays. I’m sure some recall “Karen” the supertrader and she blew up after initially being touted by Snotoff on tastytrade. (https://www.thestreet.com/investing/karen-the-supertrader-s-winning-strategy-relied-on-fraud-sec-alleges-13593247) Or former optionsellers guy, James Cordier and how he blew up his clients’ accounts as well as owing brokers several millions. (https://earlyretirementnow.com/2018/12/18/the-optionsellers-debacle/). I’d followed or trialed options gurus whether on cnbc, the cboe channel and site, or trialed shamshows like John carter, books and videos by Fontanills & Tom Gentile(yes that legacy shamshow who is now a push-buttoner scam today) in my first foray into trading years ago, and it’s just way too risky to attempt “delta neutral” positions especially holding overnights for weeks , months or longer, and even doing conservative vertical spreads stands to lose substantially at risk for so little gain and imo, not worth the time holding all those positions. That Jaffee had such a big drawdown that first year compared to his gains while risking that much size, is really imo, too small a sample size of a “trading record” for options. Yes, he’s got this arrogant complex, trying to fool himself and others into thinking his “way” is the “only” way to trade with an ivy degree and ambitious background, still far more legit than that clown pumper Ross with his lying “architect” degree and past. But the markets can defy plenty of smart and educated people, and we’ve seen educated and corrupt clowns like Sachs of rightline with revoked md cred, but also tried to fake that Wharton phd farce on ts, and Dean with his multiple grad gobbledygook collage of graduate degrees while leaving a harmful waste of a professional history and victims. So Jaffee this younger new smart guy, but terribly risky and self-affirmative to obsessive levels it seems. I’d advise most newer readers to stay clear. Sorry that tradingschools thinks this guy is substantial. I’m concerned and afraid it’s going to cause misery of blowup styled financial losses for victims whether unintentional or not down the line. Maybe if he did a much smaller account demo as mentioned, so newbs can lose less while learning about options and move on, but I don’t know, so just be wary.
“Clown Pumper Ross (Cameron),” Oh my god, I nearly fell out of my chair laughing so hard!!! There are so many good nicknames for Ross Cameron, my personal favorite is Effininate Leprechuan Master.
But others are good, like: The Rainbow Pumper, Finger Puppet sCameron, The Red Lady, Pumpy Skittles, to name a few. There should be a contest.
Regarding Jaffee, well I thought he would have been totally crushed during the Covid selloff…but he got out and bounced back.
The next extended Bear market, where the Fed is not propping up the market is going to be Jaffee’s real test.
True regarding James Cordier.
And how in the hell did Karen not go to prison? That was some fraudulent shit.
Tom Sosnoff should have had his teeth pulled for promoting her.
Lets take everything as true. How realistic can this be repeated each and every year.
Lets give him the Benefit of the doubt and say he can earn 30% a year. With a $5000 dollar account that would be $1500 dollars a year. Once you factor in the cost of his service
you are in negative territory,. I think if you even want too consider taking advantage of any of his services you need a much bigger account. As well I would not dump all my free capital on a system that has 1 year of data. Impressive sure it is, but does not meet the test of time.
Did he change from a Million dollar margin account to something reasonable for the rest of us? If so, what was the size?
And thank you for the Great Reviews.
Yes, as I stated in the article, we challenged Jaffee to a smaller account size (Part I article). By doing this, and by starting with a $5k account, I wanted to see if he could actually replicate the larger account size performance metrics. Read the article for the results, I found it interesting.
Sorry I had to break the article into two parts, which might have caused some confusion. But it was a really, really long article. I put Jaffee through the proverbial ringer. Most “educators” would have opted out and rung the bell of surrender.
Jaffee has extraordinary mental toughness. He is very tough to rattle. I believe that the courage of his convictions is a big part of his regime. It is an extraordinary intangible.
However, people that “have the courage of their convictions” are usually quite crude and ham-handed in their execution and demeanor. Jaffee has a reputation for being narrow and sometimes callous — but this oft-repeated complaint is a two-sided sword.
What is interesting in Jaffee is that he is also very nuanced. It’s the nuance that truly differentiates in the skill of trading options. To summarize, people with “too much” courage are usually ham-handed in their decisions and get slaughtered. But Jaffee also has a great deal of nuance that throttles his inherent aggressive nature. It’s the nuance that makes all the difference. The jury is still out whether this is a transferrable skill.
Another analogy: I play chess. And I mean A LOT of chess. Its been an obsession of mine since I was a kid. After you learn the basics, and then the middle, and then end game, your performance tends to stagnate and plateau. But the great players have mastered all three stages of the game, and they can employ nuance which negates players with reasonably like skills. The nuance is the killer in top-level chess players (of which I am not).
I’m glad to report that David and I are on the best of terms. He asked for my telephone number, called, and we chatted for 45 minutes. He promised to promote my book (An Investors’ Guide to Stock Market Scams and Strategies) and I promised to change the chapter on him from slightly negative to positive. The only point of contention remaining is that he claims that the lawsuit Warrior vs. Jaffee was dismissed whereas I claim that he was hit with a permanent injunction ordering him to lay off Ross Cameron or else! A piece of information he dropped was that he places his put sales 2 SDs out of the money. This practically guarantees a successful trade, but the return is very small.
David’s strategy and mine make about the same profit and are completely different in that each uses resources the other doesn’t. He has a bundle of cash in a money market fund earning less that 0.5% and only providing margin whereas it could be making 30% in stocks using my strategy. I proposed that we combine strategies and clean out the house, but he’s not ready for that.
LOL! What a great comment.
I am all up for making 30%! Actually, ran my numbers and was really impressed with my 12% over the past year, but then I compared it to the SP500 and my ego shriveled up like a raisin.
That’s considerably more that what David is making with his cash. His philosophy is that stocks are not a good investment and that can only be because he was not successful with them. Two others I know who got into options because they were not successful with stocks are Kirk Du Plessis of Option Alpha and OptionGenius (Alan Sama), who sells alerts.
David describes his strategy in detail in his videos and on his web site. He keeps a watch list of a few favorites. “I usually have positions on the following securities:
I sometimes also have positions on McDonald’s and PayPal as well.” He doesn’t mean he owns them, he just sells their options.
When he thinks that one is at the bottom of a trading range he sells its puts. If it rises to the top of the range he sells calls to create a strangle. He watches the VIX. When it is below 20 he puts on credit spreads. They benefit from a rise in the VIX whereas the short puts benefit from a fall.
I consider this a good strategy, however I don’t think it is possible to make a million a year with just these stocks. Their option markets are too thin. You see him trading in his videos: “There, we just made $300!” If he trades twice a week and makes $1,000 a week, that’s just $52,000 a year. The size of his “large” account is uncertain. Once he told me it was $6MM and another time he said it was much larger. I take him t his word, but the two brokerage statements of his that I have seen show a balance of just over a million.
I think that if he traded the SPX with this strategy, as Karen the Supertrader did, he could make a million a year.
Sam, do you share your strategy in your book? Care to elaborate a bit?
Yes. There is nothing new in it; it is a traditional trend-following strategy and I describe it in the words of two practitioners of the recent past, Jesse L. Livermore and Gerald M. Loeb. Livermore’s book is not the familiar Reminisces of a Stock Operator by Edwin Lefevre, which is biographical, but How to Trade in Stocks, which explains his methods. Loeb’s book is The Battle for Investment Survival, which began as a series of articles in Barron’s and ultimately made their way into a book.
Both authors stress not only the importance of cutting losses while they are still small, but also the desirability of adding to winning positions as they progress, which may be new to many traders. Livermore rants heavily against “averaging down,” a strategy used by some to reduce their cost basis. Loeb deals a few shockers. At the outset he says “These ideas will seem wrong to most people.” and later, “My best reason for selling a stock is because it stops going up, or worse yet starts to go down.” One of Livermore’s most memorable quotes is “Markets are never wrong. People often are.”
These books are no longer on every trader’s shelves, but they contain eternal truths that can lead to profits if faithfully applied. Thanks for asking.
I have revisited David’s video “Options Trading: Up 117% with 100% WIN RATE”(https://www.youtube.com/watch?v=FUTCAqtsMP4) and note that he has made some significant changes, of which I approve. He has restored the link to his IRS Form 1099 for 2019 and has explained why there are 43 losing trades on the form. He explains that they are parts of winning spreads, and this is correct.
Spreads typically have a winning leg and a losing leg, and if the win is greater than the loss, then the trade is a win, but in order to match up the legs not only must the options and their expiration dates be the same, but the opening and closing dates must be the same. On David’s form the winning trades have the same opening and closing dates, making them look like day trades. In our private conversations David was incredulous that such a firm as Tastyworks would make such an error. I marvel that so many of these gurus prefer high-risk upstart brokers. I deal with Schwab and Fidelity. Schwab waives commissions on the first twenty options of my trades.
After several weeks of paper trades I have started using David’s strategy as a supplement to my usual managed portfolio. It is an excellent way of financing a long position with margin. What your broker expects you to do is to borrow money from him at exorbitant rates. With David’s method of selling puts you not only receive money you can use for any purpose but you also earn interest on it in the form of time decay. I have found three gurus on the web who assert that when you sell an option naked the premium you get is always your to keep and I am trying to set them straight. Actually, you get to keep all of it only if all your options expire out of the money.
Just as I have had unused margin with my portfolio strategy, David currently has a great deal of unused buying power in cash that he keeps in a money market fund earning less that 0.5% per year. My portfolio has earned 68% over the past six months and David could have done the same by using my strategy. I offered him a free subscription to my trade reports but he declined.
I consider David’s strategy to be the best option strategy and in to give an extensive treatment of it in the second volume of my book (https://tinyurl.com/yahzpo24).
Holy Moly! Sam is tougher than me with reviews, and even Sam Allen has given David Jaffee a thumbs up. I feel vindicated.
It’s good to know that Sam is keeping an eye on the shop!
“I have found three gurus on the web who assert that when you sell an option naked the premium you get is always your to keep and I am trying to set them straight. Actually, you get to keep all of it only if all your options expire out of the money.”
You wrote a book about trading and you don’t understand this? You 100% keep the premium you collect, no matter what happens to the underlying. You can choose to buy the option back at a different price before expiration, but if you do nothing and let it expire, the premium is still kept. The underlying stock can literally go to zero and you will still keep the premium you collected from selling a put.