Does this take a lot of time?
No, it does not take a lot of time. Placing orders takes just a couple of minutes. This can be done during the day if you have internet access or in the evening after the market closes. The orders that are placed at night are filled the next day by your broker. Your main responsibility is to make sure the order gets filled. Most online brokers can alert you via e-mail whenever an order is filled. This really is a time saver. Once the order is filled you are finished until you hear from me. Most of our trades expire,  meaning you don’t have to do anything else.  As far as monitoring you don’t have to do that unless I alert you to a trade adjustment. However, most members enjoy looking at their trades every few days to check on the status. This can be done in the evenings as well.

How much money is required to start trading?
Everyone’s financial situation is different. I am not a financial adviser so I really can’t tell you how much to start with. Keep in mind this is considered risk capital. You should not be trading with money that you need to pay the mortgage. Ideally you can start with an account of $20,000. This would allow you to trade $10,000 of this and keep the other $10,000 in cash. However, I have members who have started with as little as $2,000. The only problem with this size account is the commissions will eat up more of your profits so you will not not get as good of a return. The other option is to paper trade for a while until you can fund the account.

Why should I paper trade?
Everyone should start out paper trading. It allows you to get used to the technical side of placing a trade. You certainly do not want to make an entry mistake that costs you your monthly profits. Take advantage of the $1 1st month subscription that I offer to get your paper account going. After that continue paper trading for a while until you feel completely comfortable with the process. Just think of the $50 a month as an education expense. That’s much better than making a mistake that costs you hundreds or thousands of dollars.

How many trades per month can I expect?
You can expect 5 trades per month. I like to do 5 so that your accounts are diversified. If the markets don’t allow it you may not receive 5. Keep in mind not being invested or keeping more in cash is also a position.

What kinds of trades do you do?
I typically do 3 iron condor trades per month. These trades are usually through ETFs such as SPY. SPY is the ETF that follows the S & P 500. I also try and do 2 vertical spreads on some less volatile stocks. These trades are a slightly higher risk reward and sometimes have to be adjusted more than the iron condors.

How much should I invest in each trade?
Again, this is a personal decision but I can tell you what I do. I will not risk more than 10% of my TOTAL account of any one trade. For example, based on a $20,000 account that is trading with $10,000 the breakdown would be as follows: The amount I would risk on each trade would be $2,000. If I placed all 5 trades that month I would have $10,000 invested and $10,000 still in cash.

Why do you recommend keeping 50% of my account in cash?
I strongly advise everyone to keep at least 50% of their account in cash. The reason we do this is in case we need to make an adjustment or close  a trade sometime during the month. One way to accomplish this is by buying back the option. If you don’t have the cash available and can’t close a trade then you might incur the maximum loss for the month. This is especially important to follow this general rule when trading within your IRA because you most likely will not be able to quickly deposit more cash into your account to place a trade. Some of the more experienced traders can get away with trading with 60-70% of their account but be very careful. 

Can I trade using my IRA?
Most online brokers allow you to trade options in your IRA as long as your account is all cash. Call your online broker with any questions regarding this. You also need to make sure your online broker allows you to trade vertical spreads.

Can you recommend an on-line broker?
Here is a list of a few option friendly brokers. Visit some sites and find one that best fits your needs. Make sure they offer paper trading.
www.thinkorswim.com (my broker of choice)
www.trademonster.com
www.optionsxpress.com
www.tradeking.com
www.zecco.com