The massive learning curve and complexity of options trading cause many investors to dodge this strategy entirely. But can Motley Fool really demystify this investment approach? Take a look at my Motley Fool Options review to see if the service lives up to the hype.
What Is Motley Fool Options?
Motley Fool Options is a trade alert and educational service designed for investors of all skill levels.
As the name suggests, the core of the Motley Fool service is options recommendations vetted by the investing team.
Members of Motley Fool also receive access to comprehensive courses that range from beginner-friendly to expert trading topics. These resources provide much more than a cursory overview and include advanced options trading strategies.
The bustling community forum lets members link up and swap trade ideas or sharpen stock options strategies.
When you’re ready to make a move, you can tap into the latest stock recommendations.
This is just the tip of the iceberg with the services that Motley Fool offers. There’s a lot more going on under the surface. So stick around for the full review of Motley Fool options.
First, let’s take a look at the stock review company behind the service.
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What Is The Motley Fool?
The Motley Fool is a financial media powerhouse that has developed an impressive catalog of investing services.
Founded by brothers Tom and David Gardner in 1993, Motley Fool has been providing market news coverage and stock research for decades.
The stock investing firm is best known for its two landmark stock-picking services, Rule Breakers and Stock Advisor.
However, its catalog extends much further than basic stock recommendations.
Some of its research services cover:
- Stocks (including small, mid, and large caps)
- Real Estate investing
- IPO markets
- Retirement investments and more
If you’re familiar with any of the investing team’s research, you’re likely aware of the high level of quality you can expect.
I’ve reviewed many of The Fool’s services, including the Stock Advisor program, and can say that the investing team is top-notch.
On an organizational level, the stock review company is one of the most reputable faces in the research industry. It even has services older than many companies in the research space.
They’ve been doing it — and doing it right — for decades.
Motley Fool Stock Advisor, for instance, has beaten the market three-to-one.
In short, this stock review company is light years ahead of many of its competitors.
Performance of Motley Fool Options for Traders
Motley Fool Options boasts an impressive 86% win rate for its closed options trades.
That’s absurdly high for the stock market.
The company has an excellent track record for market-beating stock picks, and this service is no exception.
Keep in mind, however, that past performance does not indicate future results.
Few services have a track record this solid. And if they do, they usually come with a high premium.
I’ll run down the pricing a little later. But for now, I’ll say that Motley Fool Options is surprisingly affordable given its stock market performance over the years.
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What Comes with the Motley Fool Options?
The service offers a suite of sophisticated investment research and training for traders of all skill levels.
Read on for a look at each feature of the service.
Motley Fool Options Alerts
The alerts are the main attraction to the Motley Fool Options service.
Every month, the trading team sends alerts with the latest recommendation, supporting research, and more.
These Motley Fool reports walk you through each step of the trade in detail. So you don’t need to be a pro stock advisor for the chance to make money off trading options.
Something I appreciate is the depth of analysis of these recommendations. The trading team offers an extensive but easy-to-understand blueprint for following a position.
Motley Fool investors also explain why they chose a particular options strategy over others.
I still think it’s important for new investors to check out the educational resources, but the level of detail in the trade alerts can help flatten the learning curve.
Recommendations might include buying and selling basic calls, or they may leverage more advanced strategies.
However, there’s no deliberate rotation.
Also, the investing team exercises more caution than a basic options alert service. For instance, they often gravitate toward covered positions.
There are always risks when investing, but folks with a conservative style might appreciate the more measured approach.
It’s also a nice touch for people new to options. This is an incredibly difficult trading strategy to master. And learning the more risk-averse approaches could mitigate some growing pains.
Alternative Motley Fool Options Strategies
When Motley Fool Options delivers new investment ideas, it provides several strategies for each alert, so you can choose the portfolio style that fits you best.
Every investment idea comes with a few alternative strategies.
This caveat lines up with the company’s policy against “cookie-cutter” trading. The alternatives are great for investors who prefer to weigh their options.
The alerts incorporate a wide variety of trading techniques, such as buying and selling covered calls and puts and more.
Each options recommendations report also delivers information on the underlying stock and options contracts, including the strike price.
Investing effectively is difficult, but the Alternate Trades help you find an approach that suits your style.
Options can be used to accomplish various financial goals. One of the most common aims is to gain a steady income from an investment portfolio.
Most times, income investing is done by older adults or retirees that need to make a livable wage from their savings.
With bond yields nestled firmly below 2%, income investing isn’t an easy task in this particular economic climate.
However, options can alleviate the yield gap.
Many of the trade strategies featured are designed for the opportunity to generate income.
Motley Fool Options Education
In terms of complexity, options trading is on another level from its more basic investing counterparts.
There’s much more to keep an eye on than simply buying shares of a company and holding out for the long haul with your stocks.
Even investors experienced in stocks often have trouble making the leap.
Bull call spreads, selling puts, and calls (covered calls & synthetic covered calls) could sound like a foreign language if you’re not already familiar with trading options.
Fortunately, the team anticipated this and included courses to address both sides of the coin.
Members receive instant access to several courses that teach how to effectively trade options.
This step-by-step system starts at the beginner level and works its way up to intermediate and advanced strategies.
And the material was developed by a team of top-tier options investors.
Motley Fool Options Courses
As a bonus, members can access an extensive library of educational materials to help them build their portfolio.
Here are some of the key components of the courses:
- Options nuts and bolts
- Buying calls
- Buying puts
- Writing covered calls
- Synthetic covered calls
- Covered call strategy
- Writing puts
- Writing covered strangles
- Writing diagonal calls and more
Each lesson includes extensive instruction from experienced pros, and together they cover everything you need to know about options trading.
There are three main courses on offer: Essentials, Strategies, and Masters.
Options U: Essentials
As you may have guessed, this education module gives you an introduction to everything options.
If you’re a novice, it’s wise to consider this required reading to understand the basics. Anyone more experienced could use it as a refresher.
Options U: Strategies
This course is the introduction to the Motley Fool’s options strategies. It provides 13 lessons that give investors the rundown of how to trade effectively.
I don’t recommend skipping it (even if you’re an expert), as it sets the foundation for the rest of the content. Though, this is just a friendly suggestion.
Options U: Masters
Masters crystallizes all the components of your options education and delivers 14 lessons packed with top strategies.
Experts who already leverage advanced strategies are going to feel right at home.
Discussion Boards Members
Motley Fool Options subscribers are free to chat with other members through the community message boards. This is one of my favorite features of the service.
Only registered members can use these boards.
This policy significantly improves the quality of the discourse. Most members’ messages are direct and to the point.
Also, talking about trading is one of the best ways to expand your knowledge of the subject.
When you put yourself out there on the boards, you could quickly discover where you need to improve with your portfolio.
And who knows? You might even find someone on the platform willing to take you under their wing and teach you the ropes.
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A dedicated Motley Fool customer support team is available between Monday and Friday, 9am to 5pm Eastern Time (ET).
You can reach them via call or email, and they work quickly to address your questions and concerns.
I’m going to give the company extra points for including phone support.
Customer service has become a long-lost art in the research space, but Motley Fool is still hanging strong.
Each new Motley Fool Options subscription comes with a 30-day membership-fee-back guarantee.
There is one caveat, however. The refund is only in-store credit — not cashback.
While it’s a bit of a bummer, this company has been in the biz for almost three decades, and the team has amassed an enormous catalog of quality services.
The in-store credit can be put toward any combination of subscriptions.
And there are many great alternatives to choose from, such as Stock Advisor.
It’s not exactly a straight-up refund, but the policy is understandable considering the amount of upfront value new members receive.
Is the Service Legit?
Motley Fool Options is legit.
The service is run by expert options traders, and it shows in the quality of insights and resources on offer.
Its 86% profitability rate is possibly the clearest example of why so many trust this company.
Few alternatives I’ve seen reach these heights with their options service.
With more than 25 years in the business, Motley Fool is an undoubtedly reputable company.
Its knack for picking winners makes it a rock star in the research space.
Also, Motley Fool’s options picking service has been around for about a decade, so it’s one of the company’s more established offerings.
Pros and Cons of Motley Fool Options
Motley Fool Options is an excellent trading service, but there are a few rough patches.
- $100 discount
- 86% profitability rate
- Learn to navigate the volatility of options
- Vibrant community
- Subscription fee is on the pricey side, even with the discount
- Only deals in options trades
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How Much Does the Service Cost?
Motley Fool Options typically costs $999 a year.
However, we were able to dig up a modest discount for our readers.
If you join now, you’ll enjoy a full one-year membership for $899: a savings of $100 off the regular rate.
It’s not the most affordable research service. Then again, Motley Fool Options offer a premium experience, and the price tag reflects this.
I’ve reviewed several alternatives, and many of them cost much more — sometimes twice as much.
Most competitors I’ve seen don’t offer a fraction of the value, such as forums and educational resources.
In terms of pricing, Motley Fool Options falls comfortably between what you could expect from introductory services and premium offerings.
Is the Service Right for Me?
Given its track record, training resources, and quality of analysis, Motley Fool Options is best suited for anyone in the market for highly vetted investment ideas based on options trading.
That’s a broad net, but it’s by design.
The team takes every step necessary to ensure that new members can quickly get up to speed and dive into the latest pick.
While folks with more experience could skip over some of the educational materials, skimming them couldn’t hurt.
The forums also offer a lot for traders of any skill level.
Fresh faces on the stock market can pop in and ask questions from time to time. And others can bounce ideas off the wall and can stress test investment theses.
Because the price tag is on the premium end, it’s also important to consider the amount of capital you have to invest (if you choose to).
For instance, if you only have $1,000 to invest, the potential returns might not be enough to recoup the $899 subscription cost.
The value the trading service provides scales with the amount of capital available.
Lastly, any members who want to hold positions based on recommendations will need a brokerage account that supports options trading.
Is Motley Fool Options Worth It?
Motley Fool Options is a great options-picking service that’s well worth the sticker price.
It covers every nook and cranny of options trading and offers comprehensive research.
Also, the Alternative Trades feature multiple strategies for approaching each investment and explain every option in meticulous detail.
This greatly expands your choices and helps you better understand the options market as a whole.
Additionally, members are covered by a world-class support team and a 30-day membership-fee guarantee. However, I’d prefer cash back over credit.
All things considered, it’s an impressive selection of research and educational resources for the price.
Close competitors can cost upwards of $2,000, and most are substantially lower quality. If you take advantage of the $100 discount, you’ll get a great service at an even better price.
The trading program looks like a solid home run. You get a ton of value for your dollar without sacrificing quality.
If you’re looking for an all-in-one trading and education experience, you can’t go wrong with Motley Fool Options.
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