I’m excited to share with you today how I’ve successfully used OFI this past year (and in many prior years) to achieve a roughly 50% annual return. This is just one “regular investor’s” performance, not our official returns.

Hopefully this video and the advice below gives you a head start on making your OFI membership successful and profitable. But if you’d like additional assistance, or just have some lingering questions, I strongly encourage you to take our free online training course with Jim’s assistant analyst, Derek Myers. Derek will walk you through the OFI system and answer all your questions during the sessions and for months afterwards on Stock Talk. Click here to sign up now.

OFI Returns

Note that due to my personal time constraints and various other situational complexities, I don’t track the official returns of the entire OFI portfolio, simply the returns of those individual trades enter. You can find the rate of return of every closed trade recommendation since the inception of the OFI service on the Closed Trades page. As you will see, the win rate on all closed trades is greater than 90%.

Despite not officially tracking the OFI portfolio, the fact remains that most users of Jim’s OFI system should get between 25-40% annual returns on average once they’re fully invested. But the first year can sometimes involve a little treading of water, particularly in a down market.

In 2023, the S&P 500 was up more than 24%. But as my video shows, I was able to essentially double that return. And was able to do so with minimal capital.

Total Investment Needed

I was able to invest in most of the recommended trades while only needing $375 of capital per trade and a total investment of just $12,000. However, that’s not always the case, and Jim recommends that you make available a bit more than that to be safe. In fact, I had an extra $8,000 available in case I needed to tap into it.

The general rule of thumb is to multiply that initial $375 of capital per trade by 1.875 (i.e., $703 per trade) to allow for the possibility that every trade will need to get rolled and possibly require an increased capital requirement from an expansion of the option spread width. Now, that’s certainly not the case with every trade. But OFI is a conservative advisory service, and keeping your money safe is Jim’s top priority.

That said, the irony of a “conservative” service producing upwards of 50% annual returns is not lost on me!

Helpful Reminders

In my video, I highlight a few important lessons, and I want to emphasize those:

1. Sell Just ONE Contract – Start by trading just one option contract per trade until you have a full understanding of the process and you have enough capital available to support more contracts per position. I traded just one contract to build up a war chest and have now been able to increase my position size to two contracts.

2. DON’T Make EVERY Trade – Yes, ideally you can get into every trade. But, sometimes life or available capital gets in the way of you making a trade. And sometimes none of us get into a trade because the order price just runs away from us. That’s okay! As part of your membership, you receive more than 52 trades per year, and it’s okay to miss a few. The worst thing you can do is chase a trade, so follow Jim’s limit prices and order entry guidance religiously. The “other” worst thing you can do is overextend your capital and get into more trades than you can afford. Use the “1.875 Rule” mentioned above, and only get into as many trades as your investment budget allows. Once you start amassing profits, you can make more trades.

3. DO the Rolls – The OFI system produces winning trades approximately 65%-to-70% of the time on the first trade. That means that we need to roll the trade 30%-to-35% of the time. It is imperative that you follow Jim’s roll advice and stay in the trade. If you don’t, you will NOT make money with OFI. Some people hate the thought of rolling options spreads. They think it’s like doubling-down on a loser. But how many of them have no problem picking up more shares of a stock when the price dips? Rolling a spread is no different. If you still believe in the underlying thesis of the trade, stick with it and you WILL win in the end. OFI’s 90%-plus win rate proves this point.

4. It’s OKAY To Get Assigned Early – If this has never happened to you before, I guarantee it will eventually. It’s a minor annoyance that happens to all of us occasionally. Here’s a full explanation of how to easily deal with early assignments.

I hope my experience and the reminder lessons above are helpful. Everyone using the OFI system should be getting 25-40% average annual returns. If you’re not, please take our training program to get back on track.