Most traders buy cheap options looking for a score. Most trades do not move in large enough point increments to be profitable. Most medium-to-high priced securities generally move no more than a 1% at a time while the option premium erodes quickly resulting if a loss. An option trader should focus on high-priced indices such as the S&P, NASDAQ or the OEX 100.

The secret to profitable option trading is financial leverage and market timing of an underlying security that moves a substantial number of points during the planned trade duration.

Regarding leverage, a $1.00 OEX option controls about $45,000 [as of April 2009] of equity which moves about 1% per day or $450 in any one direction. Late in the expiration week given a typical 1% OEX move (or 4.5 points) an option purchased for $1.00 and timed (entry and exit) using the NET methodology could earn a 3-5X return in a matter of hours.

The NET option trading methodology offers great entry and exit timing, high-probability trades with fantastic returns combined with limited risk.