Option Alpha Review
- Credibility of Educator
- Quality of Service
Option Alpha is an options trading platform started by Kirk Du Plessis. The site covers a broad swath of options trading strategies, but the site is mostly focused on the more quantitative based spread style of options trading, as opposed to something more directionally-minded like buying long-term LEAPS.
Rather than selling training courses for a one-time cost, Option Alpha runs on a subscription model with two paid tiers. Instead, the site offers a vast array of courses for free as funnel to generate more paying members.
Who is Kirk Du Plessis?
Kirk started his career finance not as an options trader, but as an investment banker working on M&A deals at Deutsche Bank. Later, he moved onto BB&T Capital Markets, where he worked as a REIT analyst. Given his resume, it’s safe to say that he knows the markets pretty well.
Kirk’s dream of becoming a full-time trader started when he was working on Wall Street and trading his own account on the side. This lead him to start a blog and write about his trades and the markets in general. After a conversation with Pat Flynn of Smart Passive Income, Kirk was convinced to create some paid training courses, which lead to the transformation into the subscription-based business that he runs today.
Kirk and his team at Option Alpha are transparent about their trading track record, with a page on their website dedicated to tracking their performance and various metrics like which trades perform the best, and their probability of success on a given trade.
Over a sample size of 4,211 trades, Kirk has an expected value of $36 per trade. If the last 30 days is at all representative of an average month for Kirk and Option Alpha, then taking every trade that Kirk takes in the same size and fill prices should net you about $2,124 per month, and about $25,000 per year. This is less than half of the median household income in the United States. Take another $1,188 off that yearly income for your cost of an Option Alpha Pro membership.
While having a positive expected value short-term trading strategy in financial markets is an impressive feat in itself, it’s clear that Kirk couldn’t make a living trading alone without drastically altering his trading style, size, or frequency.
In addition to their free membership, Option Alpha has two paid membership tiers: Pro and Elite. Here is the site’s breakdown of each tier:
In addition to their monthly subscriptions, Option Alpha sells lifetime licenses to their web-based tools like backtesters, strategy optimizers, and scanners. Here is the breakdown of the licenses they sell:
Kirk’s philosophy when approaching the option markets is similar to that of Tastytrade. This philosophy states that implied volatility is generally overstated, so being a net-seller of IV is a positive expected value trade. To put it simply, traders like Kirk and Tom Sosnoff of Tastytrade are essentially permanently short premium. This approach falls under the “income trading” category.
Strategies like this one are quite controversial in the trading world. Selling premium is often referred to as “picking up pennies in front of a steam roller,” as your winning trades, while much more frequent, are small wins, while your losing trades are substantially large losses.
Many other options training services and blogs have criticized this method of trading. A competing options training company called SJ Options have produced a number of critical pieces against premium selling. Their most popular video is about famed premium seller Karen the Supertrader. In the video they explain the statistics behind her trading style, coming to the conclusion that her bust was pretty much inevitable.
On the other hand, there are plenty of advocates for premium selling strategies. The most popular being Tastytrade, which has massive infrastructure in the form of a brokerage and financial news network behind them. Kirk has plenty of case studies on his website as evidence of the strength of his strategies.
While most trading services have nothing proprietary about their strategy, the difference between them and Option Alpha is the presence of a prominent financial news network dedicated to promoting this very strategy. You see, the Tastytrade network has dozens of shows dedicated to selling option premium. Shows like Good Trade Bad Trade, Bootstrapping in America, Options Jive, The Skinny on Options Data Science, and dozens more go extremely in-depth in all departments: trade ideas, data, and training. And it’s all free.
Compare this to your average small-cap day trader’s services. There aren’t many free resources teaching that trading style and giving out free trading ideas on a daily basis, which creates a gap in the market that these traders can fill.
Some value can definitely be gleaned from Kirk’s daily market commentary due to his vast experience in finance but I was left disappointed. I expected a sophisticated, nuanced view on current themes in the market, and how Wall Street will react to certain events, but instead, much of his commentary seems shallow. “I think Facebook is great, they’ll go up after earnings. Wow, look volatility is expensive” is a typical trade analysis you’ll hear from Kirk. Much of the commentary in his member updates are more heavily weighted towards technical analysis, using fundamental catalysts to explain the price moves.
A typical trade commentary from Kirk looks like the following:
While I’ve been a bit critical of Option Alpha and Kirk Du Plessis throughout this review, this doesn’t mean I don’t see any value in their services, just that I think they’re flawed. It’s important to remember that Kirk is a transparent, consistently profitable trader, a very rare thing in this trading education industry. Many claim to be profitable, but few document all of their trades, win or lose, publicly. Kirk and his team deserve massive credit for that.
My main gripe with Option Alpha is that, if you were to follow Kirk’s trades, it would only be side income for you, especially given that you’re probably trading in smaller size than Kirk. Taking into account that you’ll only clear a small amount post-tax, and you have to pay for your Option Alpha subscription, one has to wonder what their hourly rate comes out to when trading this style.
With that said, I admire Kirk’s marketing ability, honesty, and most of all, his ability to actually maintain an edge in trading financial markets. A subscription to Option Alpha isn’t for everyone, but there is certainly a demographic of people who will steadily grow their accounts alongside Kirk and the community.
Hi, thanks for this review, I do think he is honest, there is a lifetime subscription that I consider is cheap considering all the information and resources he offer after signing with him, the current value is $1997, and the you can see all his forum, toolbox, his comments every day and more than that you have access to him by email that usually responds same day or day after, on the other hand he is about to launch the auto trading platform that will be included for the highest membership and lifetime members, I think that with his simple commentary is enough, I think that actually nobody knows where the market is going, at least the common people like us, probably the elite of the world could know where is this going, and sincerely I don’t need a huge or complex commentary based on what have happened, financial comments are full of “deja vue” views and there are not objective and are most of the times very obvious, they just need to link something that happened with the market movements, you know good news could be inverse to market movements…or you nee to follow a candlestick pattern to open a trade, I have learned with kirk that I don’t need to see a chart to be profitable and I don’t need to read news to trade and be profitable.
Hi Luis, thanks for your comments. It has been four months since your review. Do you stick to your review still? I have seen some pro members complain that though their number of wins percentage is high but the monetary gain is not much. On the other hand the losses are big in terms to money though small in number. That way they maintain a big winning percentage but unsatisfactory monetary gain after paying the commission fee. What have you experienced?
Yes, I agree. You never get the option price going into a trade that they get because they don’t share their trade until after their trade has been filled. Both entering and exiting trades. I was a pro member for six months and hit my budgeted LOSSES this month and had to quit. Gains are minimal and losses are extreme. Also I didn’t have the funds to place most of the suggested trades ($5000 account size)…..
I did get a lot of value from the training. So I felt I did get something for my money (knowledge).
I’m right there with you. I had a loss of $400 for the month of May. Kirk posted that we only had to losses for the month of May but that doesn’t matter when the losses are bigger than the wins.
Closing my contracts for June then cancelling this subscription. I should’ve read reviews before losing my money.
Thank you – interesting commentary!
If you know how to calculate max losses you will realize how 1 single trade gone wrong will take away any wins. From what I’ve seen for so far you won’t make more than $300 on a trade but a single loss and most of them are as high as $600-$700
Kirk bragged about only having 2 losses for the month of May but for me those 2 losses put me at a negative $400 for the month of my.
Sounds like you price entrance wasn’t considered. You need to pay yourself at least fair odds.
I used to follow Kirk’s trades and it cost me about 8% of my account earlier this year. He’s trading with a much larger account than his customers and his strategy doesn’t scale down very well. What may initially have $400 in risk can quickly turn into $1200+ risk if you do take his laddering approach. It may be okay for larger accounts but regardless of your account size there are more efficient ways to trade.
I stopped following his trades and formulated my own trading plan from information that I’ve learned from Option Alpha and Tastytrade. Now my account is back to even. May was probably my best month of the year so far and have made about $1,000 in May alone. I’ve only done maybe 1 or 2 Iron butterflies recently. They both worked out but it’s not my go to strategy. I primarily stick with wide iron condors, strangles, and spreads.
Unfortunately I had to lose money before I learned that I just need to find out what works for me and not try to copy someone else. Use them for inspiration sure, but be smart about it.
Option Alpha wasn’t a complete waste for me. I did learn a few things, mostly about how to use TOS to analyze your portfolio and how to keep things balanced. There’s some good stuff there, but his trading style (strategy selection) isn’t for me.
Use Tastytrade and option alpha to learn how things like Delta, theta, implied volatility works. Learn various strategies. Diversify your strategies (something OA doesn’t do very often)
Don’t get discouraged about losses. First time I saw my account down $1,000 it hurt. It was discouraging but then I realized over the long term I hope to make a lot more than $1,000. Losses are part of it but the plan is to make more money than you lose long term. So stick with it and be smart
Could you please advise me which stocks you have selected for trading options?
Based on https://optionalpha.com/members/tracks/intermediate-course/targeting-portfolio-returns video, portfolio returns can be negative. Note in the video he only talks about positive ROI. If you calculate the expected ROI then it’s negative. In the long-term, you’re going to lose if you don’t adjust your portfolio. Checkout comments – he is suggesting continuous adjusting. However, I don’t know the expected return with adjustment.
Kirk Du Plessis was caught using fake reviews: https://www.reddit.com/r/options/comments/buv7g2/is_option_alpha_a_scam/
Also, I watched a video where he tried to take advantage of one of his students.
I don’t think he’s a profitable trader
Im just learning the strategy now and as NotMyRealName says you can learn from OA and TT and learn basics while formulating your own trading strategy. People charge US3000 for what they provide for free. I think the main reason for early failures is under funded accounts so you have to take a few losses and have an account big enough. Im in the middle of the course now and will report back in the next 6 months with my findings.
Hi, how’s trading going? It’s more than six months.
im so very disappointed to alpha-options.com agent who replied me for my questions i deposit last August 2 and i would like to withdraw it and then now its August 17 and i have no money received im so very very disappointed because you laugh me because my invest is small amout did you know that i borrow that to make it big so can i feed my kids and family
The scanning looks fine to me, but it looks very limited showing just a few candidates. I know there are a lot more. Feel kind of bamboozled after subscribing.