Log In | Help


by Uncle Bob Williams

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 Monitor Daily Email Updates. How do I stay up to date with my trades?
Q: Trade Monitor Alerts: We send profit/loss alerts on individual spreads.
Q: Trade Alerts on Portfolios? (yes: SMS & email. We send alerts to you when we make a trade.)
Q: Which Options Brokers do you recommend?
Q: Highest Profit Practices
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 happens if everyone starts trading Options, won't the profit disappear?
Q: How to upgrade from monthly to annual subscription?
Q: How do I cancel?
Q: Don't see your question?
Ask us, email to: help [ AT ] unclebobsmoney.com

- - - - - - - - - - - -

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.

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.

- - -

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 send us an email:
TO: help [ AT ] unclebobsmoney.com
SUBJECT: "free 14 day trial":

Please give us one business day to get yours set up.

- - -

Q: What does UncleBobsMoney offer me?

A: There are 3 parts to our site:
- -
A) The TOOLS to find and manage great trades:

    1) The Trade Finder helps you find the ideal spreads to trade.

    2) After you enter a trade, the Trade Monitor gives suggested exit points and shows you the status of each spread so you can maximize profits.

These tools do the calculations for you so you can decide what to trade.

- -
We give specific trade suggestions that we trade with real money, and we monitor those trades until we close them. The Model Portfolios are monitored in the Trade Monitor, in our weekly emails and email updates. We keep you informed on the status of all positions, along with a specific trade plans and exit / conditional order points.

We send email and/or SMS trade alerts on all trading activity. You place the trades with your own Broker.
(The SMS trade alerts are available in the USA and most International countries)

Model Portfolios Details:

The Conservative Portfolio focus exclusively on Super High Probability Iron Condors on the main Indexes (RUT, SPX, NDX), and usually makes ONE trade per month. We will find, trade and monitor a 1 contract spread. You can adjust the number of contracts to fit your own account and investment goals. [If we make an NDX spread ($2,500 maintenance per contract), we will normally offer an SPX or RUT alternative ($1,000 maintenance per contract) for those with smaller accounts or who are not yet comfortable making $2,500 spreads.]

The Conservative Portfolio is geared for maximum profits for conservative Options traders. The people who follow our Conservative Trades 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 here: http://www.unclebobsmoney.com/learning/income-generating-strategies/conservative-portfolio

The Advanced Trader Portfolio is for experienced traders with higher risk tolerances who are looking for higher returns.

We trade both WEEKLY and MONTHLY options.

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 Trade Ideas here: http://www.unclebobsmoney.com/learning/income-generating-strategies/advanced-trader

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.

- -
C) HELP FROM REAL TRADERS: We are available for questions and help all the time. We usually respond within a few hours during normal Market hours.

- - -

Q: What symbols / stocks do you support?

We support these popular symbols:



- - -

Q: Trade Monitor Daily Email Updates. How do I stay up to date with my trades?

A: Keeping track of your live trades is critical to maximizing your profits.

Trade Monitor Daily Email
At the end of the trading day, after 4:30 PM Eastern Time, the system will send you an email with the current status and profit graphs for all YOUR trades logged in the Trade Monitor. (see sample Trade Monitor email)

Members: SELECT: "Trademonitor Daily Email" to receive the Trade Monitor Daily Email.

- - -

Q: Trade Monitor Alerts

A: Get an email and/or SMS alert when your Trades hit specific points, like:
  > Condor: spread reaches a profit or loss of 5%.
  > Condor: Delta of the Short Strikes reaches 0.16.
  > Calendar / Butterfly / Double Diagonals: spread reaches a profit or loss of 12%.
  > Calendar / Butterfly / Double Diagonals: underlying price reaches the expiration break-even points.

Alerts can be set based on the following factors:
=> Profit % / Loss %
=> Underlying Price Movement
=> Delta of Short Strike
=> Expiration Break-Even Points
=> IV Change
=> Days to Expiration
=> IV Skew

* The alerts reset everyday.
To keep the alerts meaningful & useful for you, we suggest that you only set alerts at points that you will actually adjust a trade.

See Trade Monitor Alerts

- - -

Q: Trade Alerts on Portfolios?
(Conservative Portfolio, Advanced Trader Portfolio, Paper Trades)

A: SHORT ANSWER: Yes: we have both SMS and/or email alerts. We send alerts to you when we make a trade.

We try to give advanced notice on Portfolio trades.

Before we trade:
We send an 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 trade alerts (SMS and/or email) on the Conservative and Advanced Trader portfolios. The 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.

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.

Trade Update Emails:
We have a weekly email update that goes to all members every Sunday. We also send any trade changes to all members via email as they occur. These general updates are much more detailed than the alerts mentioned above. But, because they are more detailed, the general emails are created by hand and generally go out within the hour after any trade was made.

= = =

You can learn more about our Portfolios here:

Conservative Portfolio guidelines:

Advanced Trader Portfolio guidelines:

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.

- - -

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.)

=> TastyWorks
(TastyWorks is a great new Brokerage from TastyTrade.com. They feature low commissions and easy to use software.)

=> Interactive Brokers

=> EOption

=> E*Trade

=> Ally

=> Schwab

- - -

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. (Some people call this a "VERTICAL" spread. 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.

- - -

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.)

- - -

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.

- - -

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.

- - -

Q: What happens if everyone starts trading Options, won't the profit disappear?

A: We wish everyone would trade options!
Why? Because there is no limit to the number of Options that can be sold. In fact, the more Options there are makes it better for everyone because more liquidity brings better pricing.

Options are not like stocks. There are a specific number of shares issued for each stock, and so the price goes up and down with the supply and demand. If everyone wants to buy a specific stock, the price will go up until the demand goes down. So stocks have a natural limit. If there is a 'hot tip' the price will adjust quickly depending on the demand, and the 'hot tip' won't be so hot.

Options have no limit. As long as someone is willing to buy or sell, there is a market price to do so. While it is true that the price of specific strikes may go up and down depending on demand, any unusual demand on one strike will create an opportunity on a different strike.

For example, what if we make a Call Condor spread, on the SPX (the SPX is the Options Index for the S&P 500):

STEP 1: My friend Steve, finds this great trade that he tells me about:

Sell the SPX 1620 Call strike for $3.50
Buy the SPX 1630 Call strike for $3.00
This will result in an immediate $50 credit, and the Broker will hold $1,000 in maintenance money (which is the maximum possible loss) in the account until the position is closed.
Resulting in a 5% return on the trade.

- - -

STEP 2: It turns out that Steve, told the whole world about that spread. He was interviewed on CNBC, The Wall Street Journal, Yahoo Finance, and then Warren Buffett went live on every TV channel to say that Steve's trade is the best options spread he has ever seen in his life. This trade is getting HOT, and it is getting HOT fast. We can say that the demand will be extreme.

- - -

STEP 3: We decide that we can't miss out on this action, so we go to place this trade, and we find that the pricing shot up on these strikes because of the high demand:

Sell the SPX 1620 Call strike for $3.25 (The 'sale price' went down because too many people wanted to sell it.)
Buy the SPX 1630 Call strike for $3.20 (The 'buy price' went up because too many people wanted to buy it.)
This will result in an immediate $5 credit.

OUCH. $5 is a lot less than $50. That's a 0.5% return vs. a 5% return. Definitely not worth it.

However, the increased demand on those strikes creates a better opportunity for us:

- - -

STEP 4: We use this increased demand to make a different spread that capitalizes on the skewed Options prices:

We can instead, go for the more conservative spread:

Sell the SPX 1630 Call strike for $3.20 (This is the strike that everyone wanted to BUY, so the price went up. We can use the inflated buy price to our advantage to make more money buy selling this strike instead.)
Buy the SPX 1640 Call strike for $2.60
This will result in an immediate $60 credit.

GREAT. $60 is more than the original spread price of $50, and we have the added benefit of taking a spread that is 10 points further out (safer). That's a 6% return vs. a 5% return on the original spread. Definitely worth it.

If we were more aggressive traders, we could have gone for the:
Sell the SPX 1610 Call strike for $4.05
Buy the SPX 1620 Call strike for $3.25 (cheaper than the original price of $3.50)
This will result in an immediate $80 credit. Of course we take a little more risk with this closer spread, but we are able to grab an extra $0.25 (2.5% of profit) because of the high demand on the original strike.

- - -

When these types of pricing anomalies occur, they are very easy to see in the Trade Finder page because the YIELD value will be higher on the spreads adjoining the trades with the high demand. You don't need to do any math, you just need to select the trades with the highest yield in the strike range you want to trade.

- - -

Plenty of liquidity with Options:
Some people ask how big the Options market is and if there are limits. The Options market is huge, and there is plenty of liquidity to support all the trades that are posted. We have a page that shows the how much it would cost to buy all the outstanding Options contracts. http://www.unclebobsmoney.com/learning/understanding-options/options-cash-value

For example, SPX (Options on the S&P 500), usually has over $60 Billion in outstanding Options. That's Billion with a "B". That is a lot of money buying and selling options on one symbol.

- - -

Q: Highest Profit Practices

The Condor Options strategy is based on statistics. If you select good trades according to proven guidelines, the odds will always be in your favor.

The key to being profitable is to diversify with many small trades, and to remove positions when they hit the adjustment point or profit point.

If you are disciplined and follow the rules, you will keep your losses to a minimum.

Unfortunately, many traders get greedy, or hope that the market will turn around, or leave their positions too long to squeeze out more profit.

In short, when traders lose, it's because they didn't follow their trading plan.

It's best to have a cash reserve around 50%, and then trade with the rest.

If you only trade very conservative positions, you can reduce your cash reserve to 40% (actively trading with 60% of the funds).
However, the smaller reserve limits the types of adjustments that you can make if the market moves aggressively against you - you may end up closing more positions for a loss in a tough market.

The cash reserve is used for adjustments if necessary.

Don't let the cash reserve go below 20%. You may need to close positions in an emergency, and you need cash to be able to smoothly execute trades.

You should diversify with different underlying symbols, and different expirations where you can.

The goal is to have a lot of small trades.

While diversification is important, you should stick with underlying symbols that you know and are very familiar with their price movements. You need this level of familiarity to be able to analyze & select great trades.

For example, in the Advanced Trader Portfolio, I generate consistent profits by primarily trading the: SPX, RUT, NDX, & GOOG (outside of the earnings months).

It's best to have a trading schedule, that you follow as best you can - market permitting.

The mix of trades depends on your trading style and availability to make trades.

For example, you may place new weekly spreads every week on a specific day on specific symbols.

With a consistent trading schedule, you will become expert on those symbols and those spread trades.

More familiarity leads to better trade selection and better trade management.
As an expert, you'll be able to adjust your trading to better fit the constantly changing market conditions.

Compare this approach to the 'yield hunters'.
It's easy to understand why 'yield hunters' aren't profitable long term:
--> 'Yield hunters' select trades based on simple math calculations without understanding why those magical looking trades have such high yields.
The reason: because the risk is unusually HIGH.
--> Without trading consistency, the 'yield hunters' never get the expertise to become great traders. Their trading decisions will be based on the latest market whims instead of a solid methodical trading history.

- - -

Q: How to upgrade from monthly to annual subscription?

A: Amazon recently discontinued the payment system we used previously, so there is no automatic upgrade to annual system. We hope to have the new upgrade to annual functionality finished shortly.

In the meantime, you can cancel your monthly subscription, and then after the current term expires you will be prompted for your payment information when you come to login. You can select annual at that time.

Your trade data and trade history will stay safe. We never delete user data.

- - -

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 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.

- - -

Have a Question? Comment? Suggestion?
Ask us.