Product Review: PowerOptions by Jayanthi Gopalakrishnan
The advantage of trading options
over anything else is
that you have several different
strategies that you can
apply. But the downside of so many strategies is that you have a lot
more to learn. So given that you have
more than 3,300 optionable stocks, exchange
traded funds (ETFs), and indexes,
each with multiple strategies you
can apply, how are you supposed to
select the best ones to trade? To ease the
process, Power Financial introduced
PowerOptions, an online tool that can
go through all your options based on
your selected criteria and find the best
ones for you.
HOW DOES IT WORK?
You can start immediately if you opt for
the 14-day trial. You will receive a
username and password. Once you sign
in with this information you are ready to
get started. It’s web-based so there’s no
need to download anything. Your starting
point is the home page (Figure 1)
from where you can link to the quick
start guide and user guide, both of which
give you step-by-step instructions on
how to use the site. There are three
services offered: PowerOptions, the
educational kit, and the advisory site.
We will just focus on the PowerOptions
product for this review.
On the home page you see several
tabs along the top. These are mostly
option strategies such as covered call,
bull put credit, long call, naked put, bear
call credit, and calendar call. The company
supports 23 different option strategies.
All you have to do is select one of
these strategies to do your screening.
My first search was based on the calendar
call spread, and this spit out more
than 400 results. I customized the search criteria by adding a few filters and ended
up with 42 results (Figure 2). The patented
technology behind the search is
called SmartSearchXL. Adjacent to each
result is an arrow from which you can
link to more information about each of
these stocks. From here you can link to
your broker — that is, if your broker is
OptionsXpress. You can get stock
charts, company information, profit/loss
charts, option chains, and a handy option
calculator. Selecting the profit/loss
chart will display a risk-reward graph
such as the one seen in Figure 3.