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Has anyone heard of a system by which you invest some minimum amount of money($2500) to some investors who in turn take your money and buy and sell options without you having any say in the security that's chosen. They use some system from callwriter.com and optionsxpress.com

A friend approached me with such a system and he has claimed to already have made a $10 return in one month and is investing more with margin.

It smells like Ponzi for two reasons:
1. Before you can trade you need to enlist at least one other person.
2. Outrageous claims of 8-12% consistent returns are made a month.

I know the general rule is higher return = higher risk and the "having to enlist one other trader" is very suspicious. I spell Ponzi, but am looking to see if anyone has heard of such a scheme?

Jeff
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