A market-neutral options strategy

With a market like this, everyone would like to add some uncorrelated or market neutral strategies to their portfolio. Here's one that I ran across quite accidentally:

http://www.agoraoutlook.com/

Here's a summary of what they do:

We use a unique program for trading index options which is opposite of the buy and sell method of trading options. What we do is sell options using credit spreads and outright selling techniques and watch the premium evaporate over time. We mainly trade the S&P 100 and 500 cash and futures indexes. Besides our trading program, the publication is designed to inform you of significant economic news, the mood and technical condition of the market and relevant trade data by e-mailing it directly to you. If there is an important news event that moves the market we also let you know about it right after it occurs!

The special emphasis of the Agora Outlook is its unique trading program. Established in 1990, by Ken Davidson, the program concentrates on trading U.S. indexes. Mr. Davidson has tested his program with key option indexes since 1982 and to date has produced an impressive 94% reliability. Since he began actual trading in 1990, the program has produced an average 134% profit per year, excluding commissions. The program has never had a down year!

Simply put, our trades involve selling options in a way which gets time working for you instead of against you. Most people who buy options do so to make a profit on a rising or falling market. Unfortunately, over 88% of all index options expire worthless! The problem is, the index may go the wrong way or it may not go anywhere so the investor’s premium in the option slowly decays. As each day and hour goes by, the option moves closer to expiration reducing the time premium! A trade can be profitably made if the market is moving up, down or even sideways! This gives investors the opportunity to make money 66% of the time instead of only 33%, which is the case when you outright buy for either a rising or falling market. This means that our program has a much higher success rate than the traditional buy and sell method! We apply a mathematical model to the market to find trades that make time work for you instead of against you. This is what makes our program unique! We always try, if the opportunity presents itself to trade the market on both the upside and the downside as our program supplies the upside and downside closing boundaries of a particular expiration cycle. This also means that you are guaranteed a win on at least one trade.

It looks interesting, but the costs are a bit high at $100 per month. But it least it gives us ideas on how to survive in a volatile market such as this one.