Ratios & Indexes

The Ratios & Index page displays a number of different measurements of a service's performance: Sharpe Ratio, Sortino Ratio, Sterling Ratio, Ulcer Index, Ulcer Performance Index, Profit Factor, Trade Performance Index, Value for Money Index and Top Trader Index.

:: Graham O'Connor

"Pro-option-profits has filled an important gap in the investment newsletter arena. Investors now have the opportunity to assess and analyse the results and services of the many newsletter providers out there. It gives the individual the ability to match up a service to their investing style and then compare results with other services monitored by pro-option-profits. As a leading newsletter provider Anacott Investments welcomes the service that pro-option-profits provides to their customers."

Graham J O'Connor

Managing Director

Anacott Investments Co Pty Ltd

:: Reports Menu

Intro	Personalization
Section 1	Annual Returns
Section 2	Monthly Returns
Section 3	Trading Strategies
Section 4	Monthly Analysis
Section 5	Gains & Losses
Section 6	Trade Parameters
Section 7	Ratios & Indexes
Section 8	Summary
Glossary	Glossary

:: Ratios

There are four Ratios that we use to assess a service's performance:

Sharpe Ratio: a risk-adjusted financial measure that compares a service's excess return to a specific measure of risk (the standard deviation).

Sortino Ratio: a risk-adjusted ratio as well, this time measuring reward verses the downside deviation (or semi-deviation) rather than the full standard deviation as used in the Sharpe Ratio.

Sterling Ratio: also a risk-adjusted financial measure. It differs from them in that it uses the Maximum Drawdown as its measure of risk.

Profit Factor: measures gains verses losses by dividing the profits generated from winning trades by the losses accumulated from losing trades.

:: Indexes

Along with the Ratios there are five Indexes that we use:

Ulcer Index: measures the depth and duration of drawdowns (as a percent), and was developed as an alternative to the Sharpe Ratio.

Ulcer Performance Index: this is similar to the Sharpe Ratio in that it compares excess risk to return, but in this case it divides that excess by the Ulcer Index instead of the Standard Deviation.

Trade Performance Index: assesses a service's trade performance irrespective of other issues (such as bank size or percentage risk) by assessing its return using a standard bank of $10,000.

Value for Money Index: measures the relative value a subscriber gets for their monthly subscription fee and, in doing so, answers the question, "Where is my subscription dollar best spent?"

Top Trader Index: is an overall measure of a service's performance. It looks at 12 different aspects of the way a service trades and assess each out of a score of 20. The highest score, therefore, is 240.