I’m often asked about the difference between Cabot Options Trader and Cabot Options Trader Pro, so I thought I’d explain the difference so that you can choose the right service for your needs.
Cabot Options Trader recommends straight call/put buying and buy-writes. This service is ideal for traders who are new to options or are transitioning to intermediate level options trading and want to stick to basic options strategies. Many subscribers transition to Cabot Options Trader Pro once they’ve comfortable with the basic strategies.
Cabot Options Trader Pro recommends straight call/put buying, buy-writes, as well as credit and debit spreads, iron condors, diagonals and other options. Pro is designed for traders who have moved from a beginner/intermediate level and now understand more complex options strategies. This service allows me to recommend any option strategy I think best fits the stock situation. Note that Pro positions may take on more risk at times if the market gets volatile.
That said, 95% of the time, I recommend trades in the same stocks for both services. That’s because those are the stocks that I like best. If I like the setup in Micron or Johnson Controls, I’ll recommend positions for both services—though I may structure the trades differently depending on the situation.
For example, both services closed positions on Tuesday in Micron (MU). Let’s take a look at how they performed.
In Cabot Options Trader, we bought the Micron (MU) October 33 Calls for $2.33. On Tuesday, we sold the last piece of that position for $7.50, a profit of 222%.
In Cabot Options Trader Pro, we originally bought the Micron October 33/38 Bull Call Spreads for $1.42. We had sold the 38 Call at the time of the trade because I did not expect MU to rise above 38 (I was wrong). On Tuesday, we sold the spread for $4.90, a profit of 245%.
Here’s another example. Cabot Options Trader sold the second half of our Anheuser Busch (BUD) September 115 Calls for a 28% profit, while Cabot Options Trader Pro sold the second half of our Anheuser Busch (BUD) Diagonal for a 149% profit.
Similarly, the last piece of Cabot Options Trader Pro’s Visa (V) June 90/95 Bull Call Spread was closed for a 128% profit, while Cabot Options Trader closed the Visa (V) June 90 Calls for a 36% profit.
In those three examples, Cabot Options Trader Pro outperformed Cabot Options Trader, but Pro positions do not necessarily outperform Cabot Options Trader positions. In 2016, Cabot Options Trader positions in in White Wave Foods (WWAV) and Nvidia (NVDA) outperformed the Pro positions because I had mistakenly capped the upside in the Pro service on our home runs.
If you have any questions about which service is better for you, don’t hesitate to email me.