Q: If this is such a great trading style, why isn’t everyone doing it? (trades from the “Theta Trader” vReport) A: This style is not as well known by the “general” trading community and the educated consider it much more conservative. These trades are not the “sexy” trades that most people like to hype, these are the trades that work over time and they’re very boring,low maintenance trades.
Q: How will I receive the “vReports?” A: The “Theta Trader” vReport will be delivered to your inbox once a month. We may record several “vReports” in a month as the market dictates opportunities or adjustments in options trades. With each new recording you will receive an invitation via email to login and view the new “vReport.”
Q: How will I gain access to the OptionArmy “Delta Trader” vReport? A: Each weekend you will receive an email providing you an invitation to watch the weeks session.
Q: How can you guarantee that I will achieve the results that your trades provide? A: Not all traders will achieve the same results, but that will depend on the level of risk they are willing to take as well as their discipline to stick to a proven system. We cannot place the trades in a subscribers account, and as such, results may vary.
Q: How will the “Delta Trader” vReport differ from the “Theta Trader” vReport? A: The “Delta Trader” vReport will focus more on broad market movement as well as swing trading opportunities using stock, options and options spreads and will be delivered once a week.
The “Theta Trader” vReport is a video newsletter that will be delivered to your inbox every month and will focus on identifying non-directional options trading opportunities using Iron Condors, Short Put Spreads, Short Call Spreads, Naked and Cash Secured Puts as the market presents them.
Q: Why should I watch OptionArmy’s videos in lieu of just attending local free trading meetings? A: Local support groups can be beneficial to a beginner, but typically amateur traders lead the free local trading groups. The OptionArmy videos contain current information taught by market technicians on a weekly basis. This level of insight is far beyond the typical trading club.
Q: Can I trade this style of trading in my IRA? A: The short answer is yes. However, that will also depend on your brokers’ restrictions. The only restriction legally on your IRA is the restriction of borrowing funds (using margin). The use of margin is required in a naked call, and as such is not a position we trade in either of our services. Naked puts need to be cash secured in an IRA account, so typically in an IRA we discuss the option of doing credit put spreads and credit call spreads in lieu of a naked position.
Q: Do you ever trade stocks in your OptionArmy vReports? A: We do not personally trade stocks in our “Delta Trader” vReport, but we do evaluate stocks to identify our directional bias for option positions. However, the top down analysis we do on the markets is good for both stock and option traders. The “Theta Trader” vReport is strictly options
Q: Is there a difference in trading ETF’s vs. Stocks in this trading system? A: The mechanics are the same, but the returns will be different depending on the implied volatility of the underlying security.
Q: Do you trade weekly options? A: With the growing popularity of weekly options we will at times include the weekly’s in our trading arsenal for both directional and non-directional opportunities.
Q: What is the best platform for doing the style of trades that you discuss? A: We are not in the business of recommending brokers. There are many quality brokers that specialize in options, but there are other brokers that limit your options trading. We do recommend that you properly investigate all brokers and make sure that there are no restrictions on your options trading in either your cash or margin accounts. The only restrictions on our accounts could be that of selling naked calls. Any other restrictions are put on by your broker and will severely limit your trading opportunities.
Q: Are these trade recommendations for my account? A: These are not trade recommendations; rather they are trades we’re looking at for our own accounts, shared with you to be used for deeper insight into the mind of a professional trader and are for educational purposes only. If you decide to put the trade into your own accounts, then you assume all risk (and reward) for the trades. It never hurts to do your own due diligence as well.
Q: I have no experience in trading stocks or options, would I be able to follow your trades? A: Many of our subscribers started with little or no experience. Our trades are delivered to our subscribers with very detailed instructions so that our members have no problem entering and exiting We first recommend paper trading and educating yourself on these strategies using the Strategy Screener until you feel comfortable enough to make a live trade.
Q: What if I still don’t understand how to place the trades? A: If you have any questions or need help with a trade, it would be best to speak with someone at your brokerage firm. Each broker’s trading platform is different and they would be able to assist you best. Be sure to have the description of the trades handy, as they will ask you what it is you’d like to trade. You can always download the Text (.pdf) version of the “Delta Trader” vReport and “Theta Trader” vReport for reference.
Q: I have heard that a Covered Call is the safest options strategy, why do you not talk about these? A: In reality a Covered Call has nearly the exact same risk profile as a naked put. Because the naked put requires much less capital and they are the same trade, we typically will do the naked / Cash Secured put over the covered call. The other strategies we discuss put less money on the table, thereby forcing risk to be reduced.
Q: How often do your trades need to be adjusted? A: That depends on the markets movements and the initial position. When we look to take in bigger credits, there is a better chance of us having to adjust the position. If we trade with higher probability and lower rate of return then we will do much less adjusting. As trades need adjusting, we will send updates with the details of what we’re doing.
Q: What is an option? A: An option is nothing more than agreement between a willing buyer and a willing seller of a stock. There are 2 types of options, calls and puts.
A Call Option gives the buyer the right, but not the obligation, to buy stock at an agreed upon price on or before an agreed upon date in exchange for a premium. The Call option seller is then obligated to provide stock at an agreed upon price on or before a, agreed upon date. The intention of the call option buyer is to buy the call option either as insurance against a short stock position, or as speculation that the underlying security will rise. If, on expiration, the stock is worth more than the agreed upon price the option holder may exercise his option and purchase the stock at the agreed upon price. At any time in the life of the contract the option holder can also sell the contract to another willing buyer in exchange for a premium (this method is primarily used for speculation.)
A Put Option gives the buyer the right, but not the obligation, to sell stock at an agreed upon price on or before an agreed upon date in exchange for a premium. The Put option seller is then obligated to buy stock at an agreed upon price on or before an agreed upon date. The intention of the put option buyer is to buy the put option either as insurance against a long stock position, or as speculation that the underlying security will fall. If, on expiration, the stock is worth less than the agreed upon price the option holder may exercise his option and sell the stock at the agreed upon price. At any time in the life of the contract the option holder can also sell the contract to another willing buyer in exchange for a premium (this method is primarily used for speculation.) These types of contracts allow the option buyer to control stock for a fraction of the overall investment, giving the buyer a tremendous amount of leverage. The seller is selling the contract, with the intention of the contract expiring worthless, thereby keeping the premium.
Q: All I have heard is that options are risky, how are your trades safer? A: Options, as with all trading do have risk associated with them, and you want to understand these risks before investing. But the way our traders at OptionArmy evaluate the market is to place not only ceilings on our trades, but clearly defined floors as well. There are instances where traders can control over $22,400 worth of stock with as little as $400 at risk. Simply buying $22,400 worth of stock would put their risk much higher.
Q: Why do you review the futures and forex markets before doing analysis of the options and stock markets? A: The world is too connected to ignore movements in other markets. All markets are interconnected so we have to evaluate the world demand for our dollar before we can size up our economy. For a number of years the market and the dollar had a correlation coefficient of -1, moving exactly opposite of the market. Knowing this allows us to look for support and resistance levels in both markets to verify trading opportunities. We evaluate the futures markets because it gives an early indication as to possible gaps in the market as well as opportunities.