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Auto-Trade with thinkorswim® FAQ

Auto-Trade is a mechanism whereby an investor enters into an agreement with his broker authorizing the broker to make trades in the investor’s account based on recommendations of a financial newsletter such as Terry’s Tips.

It is important to understand that we are not a licensed investment advisor. We publish an investment newsletter that maintains several portfolios (with different strategies and underlying stocks or ETFs). We offer investment ideas but we are not managing your money or acting as an investment advisor. We do not make recommendations concerning which portfolios might be best for you. If you choose to mirror one of our portfolios, you are making an investment decision on your own, regardless of whether you have signed up for Auto-Trade with your broker or not.

Subscribers need a margin level account to participate in auto-trade though Terry's Tips will never trade on margin.  Most subscribers use regular investment accounts for auto-trade and though all of our trades are okay to do in a retirement account, tdameritrade has discontinued allowing subscribers to participate in auto-trade with an IRA.  

Subscribers to our Premium Service receive (if they request it) real-time Trade Alerts emailed to them as well as to a broker of their choice where they might have an Auto-Trade arrangement. Our regular service subscribers receive Trade Alerts at the end of the day when our recommended prices might not still be available, and these subscribers are not eligible to sign up for Auto-Trade (for Terry’s Tips) with their brokers.

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How much does it cost?

# of PortfoliosMonthly Fee
1$49.98
2$69.98
3 or more$89.98

One of the great features is that the cost of the program does not come out of your invested capital as it does with so many other investments.

How do I sign up for Auto-Trade?

First you would sign up for our Premium membership and select the portfolio(s) you?d like to follow. Then you would open and fund an account with a participating broker, select Terry's Tips as your newsletter provider, and select the number of units of each portfolio you would like to trade. Full instructions are provided for our members.

What brokers offer Auto-Trade?

The Auto-Trade program is available through thinkorswim, Inc. by TD Ameritrade — www.thinkorswim.com (or any other broker of your choice who is willing to place trades on your behalf following our Trade Alerts).

Does my Auto-Trade account have to be separate from other accounts?

It is recommended that you set up a separate account for Auto-Trade although it is not necessary.

Can I get out of the Auto-Trade program at any time?

Yes, you may cancel at any time. You must cancel with Terry's Tips as well as with the broker. You are responsible for removing any current positions from your account when you cancel.

Do you have access to my Auto-Trading account?

No. We have no access to your personal accounts. We have no idea how much money you have invested or what other holdings you have.

How do I change to a different level of Premium service?

If you are already a Premium member, you may simply send an email to autotradeREMOVETHISBEFORESENDING@terrystips.com to let us know how many portfolios you will be following (real time alerts and/or Auto-Trade).

What should I do if I decide to add (or remove) other portfolios through Auto-Trade?

Please email autotradeREMOVETHISBEFORESENDING@terrystips.com with the name of the portfolio you will be adding (or removing). Your billing will be adjusted accordingly.

Can I still join a portfolio even if I missed the start date?

Yes, a member may join any current portfolio. The only thing to note is that the unit amount is no longer the flat starting value. Once the portfolio starts trading, the unit value becomes a variable and is based on the actual account value. If you are not an Insider of Terry's Tips, please inquire about the most recent unit values for our various portfolios at autotradeREMOVETHISBEFORESENDING@terrystips.com.

Current Terry's Tips Insiders can learn the approximate amount required to join any of the current strategy portfolios by reviewing the Summary of Strategy Portfolios chart in our Saturday Report.

Is there a limit to how much I can invest?

No. There is no limit to how much money you can invest. In fact, we know nothing about your account or how much investment capital you have devoted to mirroring our portfolios.

Is there a limit to how many people or how much total capital this program can handle?

At the present time, we are not worried that the collective trades of Terry's Tips subscribers who have signed up for Auto-Trade with their brokers will affect the market. In fact, our experience has been that the larger the number of options your broker places as a single order, the better the price that can be negotiated.

When option positions are put on, the person on the other side of the trade is usually a market maker (Terry used to be one, so he has a solid understanding of how they work). The market maker earns his living by buying at the bid price and selling at the asked price - the more action for him, the better. He usually seeks a delta neutral position, so that he does not care which way the market moves.

There are dozens of other spread strategies a market maker employs - including buying or selling the stock, use of both puts and calls - back spreads, butterflys, trading against the box, ratio spreads, vertical spreads, diagonal spreads, straddles, and even strangles. Whenever a market maker is faced with a large demand for one particular option, he will use that demand as part of a larger strategy he is following. The bottom line is that large numbers of any single option can be traded without affecting its price (this does not hold true for less-actively traded options in individual companies, however).

Terry's Tips Stock Options Trading Blog

December 10, 2018

Will Medpace Holdings (MEDP) Break to New All Time Highs?

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Terry

Will Medpace Holdings (MEDP) Break to New All Time Highs?

Medpace Holdings has been getting some media attention as of late, take a look at these two articles to see what analysts are saying about this stock – MEDP vs PRAH: Which Stock Should Value Investors Buy Now? and Bullish Trend Signal for Medpace Holdings.

The technical appeal in MEDP is it’s outperformance compared to the broader markets as well as some of the other stocks on the IBD Top 50 list.  MEDP has had a pickup in upside momentum since late October which seems to suggest it has resumed it’s uptrend following a correction.  In the past week, the stock saw some sellers near the $64 price point which resulted in a decline towards its 20-day moving average.  A break of $64 would have the stock trading at all time highs.  The stock appears to be well supported here with further support slightly below the 20-day moving average at $55 which was a level that held it higher after the gap up in late July.  As well, there is a rising trendline near the horizontal level that is drawn by connecting the October and November low

[caption id="attachment_2292" align="alignnone" width="300"]MEDP Chart December 2018 MEDP Chart December 2018[/caption]

*source Tradingview.com

If you agree there's further upside ahead for MEDP, consider this trade which is a bet that the stock will continue to advance over the next six weeks, or at least not decline very much.

Buy To Open MEDP 18JAN19 50 Puts (MEDP190118P50)
Sell To Open MEDP 18JAN19 55 Puts (MEDP190118P55) for a credit of $1.33 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when MEDP was trading near $58.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $130.50 and your broker would charge a $500 maintenance fee, making your investment $369.50 ($500 – $130.50).  If MEDP closes at any price above $55 on January 18, both options would expire worthless, and your return on the spread would be 35% (312% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

[caption id="attachment_2293" align="alignnone" width="238"]IBD Underlying Updates December 6, 2018 IBD Underlying Updates December 6, 2018[/caption]

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

December 2, 2018

Can Intel Corp. (INTC) Overcome The $50 Psychological Barrier?

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Last week, the market (SPY) enjoyed its best week in 7 years.  The 8 real-life option portfolios carried out by Terry’s Tips shared in the good news.  Our composite portfolio value gained 27% for the week, one of our best weeks ever.

Terry

Can Intel Corp. (INTC) Overcome The $50 Psychological Barrier?

Several analysts think Intel stock can move a lot higher, here are two of them – Why Intel ‘s Stock Is Poised To Surge and Bull of the Day: Intel (INTC).

From a technical perspective, INTC is facing . . .

November 25, 2018

Should You Buy the Post Earnings Dip in Charles River Laboratories (CRL)?

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Terry

Should You Buy the Post Earnings Dip in Charles River Laboratories (CRL)?

Recent price target upgrades suggest more upside for CRL.  Take a look at these two articles that contain the details – Charles River Laboratories PT Raised to $148.00 at Robert W. Baird and Charles River Laboratories Given a $147 Price Target at Royal Bank of Canada.

CRL has been contained within a rising trend channel for just over a year now.  A spike higher following their latest earnings report was met with sellers at the top of the channel, resulting in a dip back to roughly the halfway point.  Support is found at $125 which was where the stock was trading prior to the earnings inspired gap up.  CRL has been outperforming the broader markets as it traded at record highs just a few weeks ago.  The trend remains healthy, technically speaking, on a daily chart and higher time frames and there have not been any technical indications that the uptrend won’t continue.

[caption id="attachment_2281" align="alignnone" width="300"]CRL Chart November 2018 CRL Chart November 2018[/caption]

*source Tradingview.com

If you agree there's further upside ahead for CRL, consider this trade which is a bet that the stock will continue to advance over the next four weeks, or at least not decline very much.

Buy To Open CRL 21Dec18 120 Puts (CRL181221P120)
Sell To Open CRL 21Dec18 125 Puts (CRL181221P125) for a credit of $1.53 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when CRL was trading near $127.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $150.50 and your broker would charge a $500 maintenance fee, making your investment $349.50 ($500 – $150.50).  If CRL closes at any price above $125 on December 21, both options would expire worthless, and your return on the spread would be 43% (581% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

[caption id="attachment_2282" align="alignnone" width="239"]IBD Underlying Updates November 22, 2018 IBD Underlying Updates November 22, 2018[/caption]

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

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TD Ameritrade

This Chicago brokerage firm with the unlikely name thinkorswim, Inc. by TD Ameritrade is considered by many to be the best option-friendly broker. For openers, they have extremely good analytic software and their option trading platform is exceptional. Thinkorswim Mobile has been called the best mobile app in the industry. In 2017, TD Ameritrade received 4 stars out of 5 in the annual Barron`s* Best Online Brokers Survey. TD Ameritrade was tops as an online broker for long-term investors and for novices. The company is the only broker that receives the highest 5.0 score for research amenities among all firms participated in the ranking last year.

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TD Ameritrade, Inc. and Terry's Tips are separate, unaffiliated companies and are not responsible for each other’s services and products.

Options are not suitable for all investors as the special risks inherent to options trading my expose investors to potentially rapid and substantial losses. Please read Characteristics and Risks of Standardized Options before investing in options

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