Subscribers have sent us many questions over the years, many of them likely on your mind as well. We’ve compiled those questions – with their answers – below.
General Options
Will I be notified when it’s time to close a position?
There will always be an email, text alert (for services that offer this feature), or action item in the newsletter itself for when we close trades (whether for profit or to limit losses). If you don’t hear from us then we’re not recommending any change at that time, regardless of market action.
Do I need to wait for you to close a position?
Use your own trade management system for when to close trades for profits or to limit losses. That being said, you can always wait for our closing alerts if you don’t want to make those decisions yourself.
What does it mean to “roll out” a position?
A roll out is simply closing an existing position and opening the same position at a later date. Sometimes the strike may change during the roll, but the important part is we are buying more time. This can be done in one transaction or as two separate trades.
Do we need to close a position that will expire for zero?
No, we can just let those options expire without having to close.
Where I can find more educational materials about trading options?
In the member section of the Investors Alley website, under Special Reports (Options Floor Trader Pro) there are some great materials for those new to options trade. Definitely check out the “10 Steps Checklist” as your starting point. If you are looking for more material, there’s a wealth of information free to access at optionseducation.org.
What are the differences between Options for Income and Options Insiders?
Options Insider is the more focused version of Options for Income for traders looking for extra trades, trading education, and immediate notification of trades. You need to have Options for Income first in order to get Insiders.
Options for Income consists of a weekly newsletter with a new covered call trade each week. Each trade is presented with three variations for conservative, moderate, and aggressive traders. All trades come out in the newsletter itself.
Options Insiders adds more trades, more commentary and real-time text alerts for opening and closing trades. Insider trades are sent via text Options Insiders members. There is a weekly video recap of all of our open positions. Insiders also includes a monthly live strategy session. Finally, Insider trades tend to be more advanced spread trades (but debit trades only, no margin account necessary).
I didn’t see a trade recommendation until the next day, can I still make trade?
It depends. If the underlying stock hasn’t moved much, then our usual rule of thumb is 24 hours after the trade is recommend it is still good, after that you should wait for the next trade. For Options for Income, we give you a buying range for that first 24 hours. There will always be more trades, so don’t force a trade just for the sake of making it.
I just joined the service, can I make the trades that are still shown as open positions?
Unless it’s within 24 hours after the trade is initially recommended, we generally don’t suggest getting into existing open positions. Of course, you have to use your own discretion, but keep in mind the stock price and fundamentals may have changed since the trade was recommended.
Do we ever exercise our long options into stock?
No. We always close an options position before expiration if there’s a chance it could be exercised into shares.
Do I need to have money to own the shares in stock we are trading options on?
No. We don’t ever exercise our long options positions into shares, so the money needed own the stock is not needed in your trading account.
Options for Income
What kind of trades do we make in this service?
Covered calls.
How many trades are there and when do they come out?
One trade – with three variations – per week; trades come out in the weekly newsletter issue every Tuesday.
What options trading level do I need with my broker?
Just buying calls and puts is typically covered by Level 1. Every broker is a bit different so you’ll want to check with your specific broker to be sure. The trades in Options Floor Trade is are selected in part to require on Level 1.
Options Insider
What kind of trades do we make in this service?
We tend to focus on spread trading such as vertical spreads and butterflies. These will always be debit trades meaning you can only lose what you spend on the trade. We won’t do credit spreads and you won’t need a margin account.
How many trades are there and when to they come out?
It varies. In Insiders, we send out trades as we find them so they aren’t on a set schedule. We tend to average two Insider-only trades per month on top of the trades we do in Options for Income. Trade alerts will only be sent via text, so make sure you have a functional cell phone number in order to receive the trades in a timely manner.
How much money do I need to start with?
There is no set amount. We try to keep trades at low premiums so they aren’t too expensive.
What options trading level do I need with my broker?
It depends on your broker, but it’s typically Level 2. You need to be able to trade debit spreads, but you don’t need a margin account. Please check with your broker to be sure.
Weekly Income Accelerator
What is the lowest investment amount can I start with in Weekly Income Accelerator?
Because with covered calls you have to buy 100 share lots of stock, an absolute minimum of $5,000 in your account would allow you to participate in two trades at a time. We recommend however to most subscribers that they start with at least $25,000 in their account that they can put toward our trades. And if you’re looking to make approximately $3,600 a month as suggested in recent promotional text you’ll need to commit $100,000.
I recently read in your promotional text that I can make $3,600 a month with the trades from Weekly Income Accelerator. How much money do I need to commit to the trades to do that?
You’ll need to commit $100,000 to your account. The $3,600 a month is not guarantee, rather a reflection of the profit potential based on the number of trades Tim and Jay make each month and their recent win-rate.
How much you make from option premium and how much from appreciation or just average it together? Percentage of options you don’t have to roll forward. Bottom line, with the $25,000 in my trading account and the cost of the service: what would you say can be averaged annually?
Jay and Tim both target 1.5% to 2% returns per month from the option premium. In the current market we have been consistently getting close to the 2% number.
Gains from having short calls exercised go on top of the premium income. There will be the occasional loss if we are forced to sell calls with strike prices below the cost basis. Over the years, we have consistently made more in gains than we realized in losses.
So using 2% times 12 months times $25,000, you get potential call option income of $6,000 per year. Of course market conditions, your trading habits, the amount you invest, and other external factors may yield different results.
How do I track my results?
All Weekly Income Accelerator subscribers receive access to a free, basic covered call tracking tool in the members section of the website.
30-Day Double Up
What options trading level do I need with my broker?
It depends on your broker, but it’s typically Level 2. Please check with your broker to be sure.
How will Rick send me trade alerts?
Rick posts a daily update to the website each morning. For alerts on trades – open, close, adjustments – Rick will send you a text alert. If you are a subscriber to 30-Day Double Up be sure to provide your cell phone number. There is a form in the members area to do that.
11-Day Trader
What types of options trading will I make with 11-Day Trader?
Spread trades: credits and debits.
What options trading level do I need with my broker?
Level 3 authorization is required to make Serge’s trades in your own account; check with your broker for details.
How will Serge send me trade alerts?
For alerts on trades – open, close, adjustments – Rick will send you a text alert.
