FAQ
Q: How much capital ($) do I need to start trading Options?
Q: Do you offer a Free Trial?
Q: What does UncleBobsMoney offer me?
Q: What symbols / stocks do you support?
Q: Trade Alerts on Portfolios? (yes: SMS & email)
Q: Which Options Brokers do you recommend?
Q: Iron Condor vs. Condor - what is the difference?
Q: Do you teach adjustments / rolling and other position 'saving' techniques?
Q: What's the biggest mistake traders make?
Q: Real-Time or Delayed?
Q: What Auto-Trading options do you have?
Q: How to upgrade from monthly to annual subscription?
Q: Do you offer managed accounts?
Q: How do I cancel?
Q: Don't see your question? Ask Us. We are here for you.
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Q: How much capital ($) do I need to start trading Options?
A:
First, you need a "margin" account to trade Options. There is an SEC "minimum margin" account requirement of $2,000.
http://www.sec.gov/investor/pubs/margin.htm
Second, if you only have a few thousand dollars, you have to make sure that your commission rate is low enough, otherwise the commissions will eat most of your profits. (thinkorswim / TD Ameritrade will give UncleBobsMoney subscribers a flat per contract commission rate with no minimum and no 'per ticket' charge. If you are a subscriber, contact us for details. We do NOT receive a commission or any compensation. We are able to arrange for this as a courtesy to our subscribers.)
See our list of Options Brokers.
HOW TO START:
a) Start with $0. Paper Trade as much as you can and get used to the process and how to remove trades that require adjustments.
b) When you are ready to trade real money, start small. Trade 1 or 2 contract spreads. It's a lot different psychologically trading real money than Paper Trades, even if the amount of risk is small.
c) You can increase your trade size according to your comfort level.
note: Options trading involves risk. In general we suggest that people limit their Options trading to 10% to 15% of their investment portfolio. It is common for beginning traders to have a series of wins, which encourages them to increase their trade size. Eventually, the Market will have a correction - they won't remove the positions when they should because they cannot stomach a small loss and they end up with a large loss. That ends their Options trading career. We try to help people avoid that costly mistake so they can make consistent profits for the long term.
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Q: Do you offer a Free Trial?
A:
We have a 'no questions asked' 14 day money back guarantee.
However, if you don't feel comfortable with that, we will give you a free 14 day trial with no credit card required. Just ask us here:
Contact us for a free 14 day trial
Please give us one business day to get yours set up.
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Q: What does UncleBobsMoney offer me?
A:
There are 3 parts to our site:
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A) The TOOLS: We have the Trade Finder that helps you find the ideal spreads to trade. When you are in a trade the Trade Monitor gives suggested exit points and shows you exactly how each spread is doing so you can maximize profits.
With these tools, you can decide what to trade.
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B) MODEL PORTFOLIOS: We also have model Portfolios where we make specific trade suggestions, and we monitor those trades until exit. Our weekly "Portfolios Update" email, along with additional updates keeps you informed on the status of all positions, along with a specific Trade Plan and exit / conditional order points.
We send email and/or SMS trade alerts, and then you place the trades with your Broker. (The SMS trade alerts are available in the USA and most International countries)
You can learn more about the portfolios here:
CONSERVATIVE PORTFOLIO:
The Conservative Portfolio is based on a $10,000 trading account. (You can adjust the number of contracts to fit your own portfolio.) It trades Super High Probability Iron Condors on the main Indexes (RUT, SPX, NDX), and makes only ONE trade per month.
The Conservative Portfolio is geared for maximum profits for conservative Options traders. The people who follow our Conservative Portfolio are generally not full-time traders — they're most interested in making the highest returns with the lowest risk and least effort. We only trade positions that have a very high probability of profit.
Learn more about the Conservative Portfolio:
http://www.unclebobsmoney.com/learning/income-generating-strategies/conservative-portfolio
ADVANCED TRADER PORTFOLIO:
The Advanced Trader Portfolio is for experienced traders with higher risk tolerances who are looking for higher returns.
The Advanced Trader Portfolio is not based on a specific account size. We suggest smart but aggressive Options spreads, which we will trade, monitor and adjust as 1 contract spreads.
You can select which trades are appropriate for you, and adjust the amount of contracts to match your risk tolerance and portfolio goals. At any given time, you may be trading all, some or none of the Advanced Trader positions.
Learn more about the Advanced Trader Portfolio:
http://www.unclebobsmoney.com/learning/income-generating-strategies/advanced-trader
PAPER TRADES:
Paper Trades are for investors who want experience trading all four strategies, with no financial risk. We place Virtual Trades in all Market conditions so we can experience the good and the bad. Different Market conditions can affect how each strategy will perform, and the Paper Trades are our guide to becoming great Options traders. We explain which trades are good or problematic from the start of each trade.
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C) HELP FROM REAL TRADERS: We are availble for questions and help all the time. We usually respond within a few hours during normal Market hours.
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Q: What symbols / stocks do you support?
A:
INDEXES:
NDX, RUT, SPX, SPXPM | EEM, GLD, MDY, MNX, OEX, RTH, USO, VIX, XEO
Mini-INDEXES:
IWM, SPY, DIA, QQQ
STOCKS:
AAPL, AMZN, BRK/B, FB, GOOG, GS, IBM, MA, NFLX, YHOO
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Q: Trade Alerts on Portfolios?
A:
SHORT ANSWER: Yes: we have both SMS and/or email alerts.
(We also have Auto-Trading.)
LONG ANSWER:
We try to give advanced notice on Portfolio trades.
Before we trade:
We send and email a few days before we enter any trades to let our members know which day we will be trading, and what types of trades we will be looking for.
When we make a trade:
Members can receive Portfolio trade alerts (SMS and/or email) on the Conservative and Advanced Trader Portfolios. These trade alerts are sent automatically by our system as soon as we enter or exit any trades. We architect-ed the alert system to send all the emails within a few seconds of our trade.
You can find the trade alerts selection boxes on the "My Account" page on the bottom side of the left column.
http://www.unclebobsmoney.com/profile/
NOTE: You should be able to get similar pricing to our trades in most cases even if you can only trade many hours later, so don't be in a panic to make a trade.
General Portfolio Updates:
We have a weekly Portfolio update that goes to all members every Sunday. We also send out the Portfolio trade positions and any Portfolio trade changes to all members as they occur. These general updates are much more detailed than the alerts mentioned above. But, because they are more detailed, these general emails are created by hand and generally go out a few hours after any trade was made.
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You can learn more about our Portfolios here:
Conservative Portfolio guidelines:
http://www.unclebobsmoney.com/learning/income-generating-strategies/conservative-portfolio
Advanced Trader Portfolio guidelines:
http://www.unclebobsmoney.com/learning/income-generating-strategies/advanced-trader
Paper Trades:
Paper Trades are for investors who want experience trading all four strategies, with no financial risk. We place Virtual Trades
in all Market conditions so we can experience the good and the bad. Different Market conditions can affect how each strategy will perform, and the Paper Trades are our guide to becoming great Options traders. We explain which trades are good or problematic from the start of each trade.
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Q: Which Options Brokers do you recommend?
A:
There are many excellent Options Brokers. We don't specifically recommend one Broker over the other. If you are happy with your current Broker, and you are able to trade effectively, then you don't need to switch to one of these.
=> thinkorwwim / TD Ameritrade
(thinkorswim / TD Ameritrade will give UncleBobsMoney subscribers a flat per contract commission rate with no minimum and no 'per ticket' charge. If you are a subscriber, contact us for details. We do NOT receive a commission or any compensation. We are able to arrange for this as a courtesy to our subscribers.)
=> Interactive Brokers
=> EOption
=> Trade Monster
=> Options House
=> OptionsXpress
=> TradeKing
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Q: Iron Condor vs. Condor - what is the difference?
A:
We refer to an "IRON CONDOR" as both a PUT + a CALL vertical credit spreads.
A "CONDOR", would mean either a PUT credit spread or a CALL credit spread, but not both sides.
(You'll find that these terms are loosely used: there is no right or wrong and that some groups will use them a little differently.)
In our Portfolios, we often have only a CALL Condor position or only a PUT Condor position. So, yes, you can definitely trade only one side.
The reason that people are 'excited' or 'enthusiastic" about trading both the CALL and the PUT sides (IRON CONDOR), has to do with the maintenance requirement of the Brokers.
If you have a April RUT CALL Condor that has a maintenance requirement of $5,000, then you can also have an April RUT PUT Condor without any more maintenance requirement. The Brokers only take maintenance on one side of a Condor (the highest side if they are not even trades). They do this because at expiration, you cannot be wrong on both sides.
As a result of this 'one side maintenance' requirement, many people look at trading one side as 'free': no additional maintenance, yet they get to take in more premium.
We always evaluate the potential risk of each side independently, and in many cases we will only trade one side. For example, one of the factors that we evaluate is the IV (Implied Volatility). If the IV is low, that means that the price of the Options will be low, and you won't be able to get your Short Strike very far away from the current market price. Depending on the Market conditions, we may only trade a PUT or only a CALL in that situation.
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Q: Do you teach adjustments / rolling and other position 'saving' techniques?
A:
To adjust or not to adjust.
Our philosophy: we will remove a trade that has gone bad and take a small loss. We will then start fresh looking for the best possible new trade.
We don't play the constant adjustment / rolling games because you can too often turn a $5,000 or $10,000 trade that's gone bad into a poor $20,000 or $50,000 trade that is also on the edge of taking a loss. Adjustments cost money, and they use up capital that you could use profitably on different trades.
The Trade Monitor gives specific exit points for each trade so you can set conditional orders to remove your spreads if they get into trouble.
We are not against adjusting / rolling and managing positions by the Greeks. If you have a large trading account, and you know how to manage a portfolio using the Greeks, by all means please do. But managing a rolling portfolio by the Greeks is a lot different than pouring money into a bad trade.
On the practical side, many of our members are either beginning Options traders or have small trading accounts. We play things straight so these people can budget their accounts and positions in a normal fashion. Whether you have a $5,000 account or hundreds of thousands, you can allocate appropriately to maximize the use of your capital.
We make consistent trades: like 2 High Prob Condors every month on the Advanced Trader Portfolio so people can allocate a specific % of their capital each month on those trades. (We may add additional Calendar / Butterfly or Double Diagonal trades depending on Market conditions - but we don't expect everyone to make all of our trades. Many members only trade the Condors.)
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Q: What's the biggest mistake traders make?
A:
The biggest mistake traders make: Trading without a plan.
Successful traders trade with a plan:
A) A plan to find and enter great trades. Trading off your gut, or off of good / bad news is basically gambling. You may get lucky, but you won't be lucky over the long term. Successful, long term traders have specific trade criteria and they only go for great trades.
B) A plan, in advance, to exit the trade when the market goes against you.
You need to decide where your exit point is and stick with it. When the Market goes against you, you don't want to second guess or convince yourself that the market will 'turn around'. If things go against you, exit.
The mistake that knocks off beginning traders is that they don't exit when the market hits their exit trigger. They start rationalizing how the market will turn around, or they only have 'n' many days left or [ insert reason here ]. They just can't stomach taking a small loss - so they don't. Then the market continues to go against them, and their losses continue to grow.
Next thing you know things keep getting worse and they final exit with a massive loss after many fretful nights of no sleep and worried days. That ends their Options trading career on a very sad note.
Be disciplined. Set your exit points BEFORE you enter the trade, and stick with them no matter what.
IMPORTANT TIP: If you are just beginning, we strongly suggest that you Paper Trade for a while to get used to the trading process. When you start to trade with real money, limit yourself to only 1 or 2 contracts. It's easy to exit on time in a Paper Trade, but when you have real money on the line, even a very small amount it is psychologically very different.
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Q: Real-Time or Delayed?
A:
The values you see on UncleBobsMoney are delayed.
Remember, UncleBobsMoney is about Income-generating Options Trades: we are not a 'day trading' company. You don't need 'real-time' data to be successful with our Options strategies:
=> If the market pricing is volatile, you shouldn't be trading Income-generating Options strategies.
=> Patience in your price negotiation when you enter or exit a position is probably the MOST IMPORTANT factor for maximum profits: not minor price fluctuations.
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Q: What Auto-Trading options do you have?
A:
Autotrading: There are people who use http://www.global-autotrading.com/ to 'auto-trade' our Conservative and Advanced Trader Portfolios.
If you want TDAmeritrade to be added, you need to request that they add UncleBobsMoney.com. They are just now starting to evaluate new Autotrade partners, and your input will help speed that process along.
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Q: How to upgrade from monthly to annual subscription?
A:
There is a button on the 'My Account' page to "upgrade to Annual subscription" which will take you through the very quick process of cancelling the monthly subscription and starting the annual subscription.
** Your annual bill will only be charged after the monthly subscription has ended. You will not be double charged for any time that you are member.
Because there is no period of double charge, you can make the upgrade to annual at any time.
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Q: Do you offer managed accounts?
A: Yes, we offer managed accounts for accredited investors. Please contact us for details.
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Q: How do I cancel?
A:
You can cancel your subscription at any time. There is a button on the "My Account" page to cancel, which will send you to Amazon Payments so you can stop your subscription.
You will still have full access to the website tools and the private email updates until the end date of your paid subscription. IE: If you paid through the 20th of the month, even if you cancel on the 5th of the month, you will still have full access until the 20th when your subscription expires.
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