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Tip 2 - Check Out Auto-Trade

Auto-Trade is a service offered by several on-line brokers.  Auto-Trade makes it possible for an investor to carry out an options strategy in his own account without becoming an options guru or making all the trades on his or her own. 

This is how it works.  First, you subscribe to an investment newsletter (we hope you will pick Terry’s Tips, but there are dozens of others you can choose from as well).  Then you sign an agreement with a broker which authorizes him to make trades in your account in accordance with recommendations made by the newsletter.  You specify how much you cash you would like to allocate to the newsletter’s recommendations.

Terry’s Tips operates a little differently than most newsletters.  We maintain 8 actual portfolio accounts (using different underlying stocks or ETFs and risk levels). When you sign up for Auto-Trade at a broker for the Terry’s Tips newsletter, you tell the broker which portfolios you would like to mirror, and how many “units” you would like to employ.  For example, if we have a portfolio that would require $5,000 to mirror, and you would like to invest $10,000 in that portfolio, you would select 2 units. 

For most of our portfolios, when the portfolio gains more than 3% over the "starting" value, we withdraw the gains (in increments of 3%) so that new subscribers can mirror the portfolio with close to the starting value.  Of course, subscribers can decide on their own if they want to withdraw cash from their account, or use it to make other investments.

Terry’s Tips is also different from other newsletters in two important ways.  First, since our portfolios are actual broker accounts, we account for all commissions.  Many newsletters display their results and do not account for commissions.  This is extremely misleading because commissions on option portfolios can be huge – sometimes 30% or more over the course of a year.  Our results are always net of commission costs.

Second, Terry’s Tips portfolio results are an open book. We believe in full disclosure.  Insiders can see every trade ever made in every portfolio.  Nothing is swept under the rug.  Other newsletters may tell you only about the one portfolio you have signed up for, and if that one doesn’t make money for you, they might tell you that you were just unlucky because you didn’t sign up for one of the profitable ones that they conducted.

At the present time, the only broker who offers an Auto-Trade program honoring Terry's Tips Trade Alerts is a Chicago broker with the unlikely name of thinkorswim, Inc by TD Ameritrade.  Several other brokers have asked us to be added to their list of investment newsletter providers, but we have not accepted their offers because we have been totally satisfied with thinkorswim, Inc by TD Ameritrade.  In fact, our experience has taught us that there is not a single reason why any options investor should use a different broker for their Auto-Trade program.  Here are some of the reasons:

  • Extremely options-friendly
  • Best (free) options software available anywhere
  • Low commissions.
  • Choice of several commission plans depending whether your average option order quantities are small or large (10 or more).
  • Great personal service.  For example, they will set up one of our portfolios on any Wednesday for you other than during the monthly expiration week so you don’t have to place all the trades yourself.
  • No extra charge for orders placed through a broker
  • And best of all – they get excellent executions.  Barron’s named them the best broker for executing option orders, and our experience has been the same.  At one time, other brokers had Auto-Trade for Terry’s Tips, and many times we discovered that the thinkorswim, Inc by TD Ameritrade brokers had executed far better prices than the other brokers received, saving subscribers many dollars (often enough to pay for their entire Terry’s Tips Premium Service subscription price).

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Terry's Tips Stock Options Trading Blog

August 15, 2016

The Difference Between Buying Stock and Trading Options

This week I would like discuss a little about the differences between buying stock and trading options. I would also like to tell you a little about a specific recommendation I made to paying Terry’s Tips subscribers this weekend in my weekly Saturday Report.

Terry

The Difference Between Buying Stock and Trading Options

If the truth be known, investing in stocks is pretty much like playing checkers. Any 12-year-old can do it. You really don’t need much experience or understanding. If you can read, you can buy stock. And you probably will do just about as well as anyone else because it’s basically a roulette wheel choice. Most people reject that idea, of course. Like the residents of Lake Wobegone, stock buyers believe that they are all above average – they can reliably pick the right ones just about every time.

Trading options is harder, and many people recognize that they probably aren’t . . .

August 8, 2016

Historical Performance of 10K Strategy Stock-Based Portfolios

This week I would like to outline the basic stock option strategy we use at Terry’s Tips where we have created eight portfolios each of which is traded in an actual separate account and is available for Auto-Trade at TDAmeritrade/thinkorswim. Terry’s Tips subscribers can have every trade in these portfolios placed automatically for them in their own thinkorswim accounts through their free Auto-Trade service.
Enjoy the full report.

Terry

Historical Performance of 10K Strategy Stock-Based Portfolios: At Terry’s Tips, we call our options strategy the 10K Strategy. We like to think of it as shorter than a marathon but longer than a sprint. Most people who trade options seem to prefer sprints, i.e., short-term speedy wins (or losses). The basic underlying idea of our 10K Strategy is to . . .

August 1, 2016

Update on Facebook Earnings Announcement Play

Last week, Facebook (FB) announced earnings which were triple the year-earlier results and were 88% higher than analyst expectations, but the stock barely budged from where it was the day before the announcement. Option players could celebrate, however. The actual portfolio at Terry’s Tips where we trade FB options gained 45.8% for the week. We have a lot of happy subscribers who follow this portfolio either on their own or through the Auto-Trade service at thinkorswim.

As good as 45% for a single week might be, you could have done even better if you had followed a trade I told you about 2 ½ months ago. That is the story I would like to share with you today.

Happy trading.

Terry

Update on Facebook Earnings Announcement Play

On May 11, 2016, I told you about two trades I was making in my personal account. You can see the entire blog which explains my thinking on our blog page. Here they are:

Today, I bought these calendar spreads on FB when the stock was trading . . .

Making 36%

Making 36% – A Duffer's Guide to Breaking Par in the Market Every Year in Good Years and Bad

This book may not improve your golf game, but it might change your financial situation so that you will have more time for the greens and fairways (and sometimes the woods).

Learn why Dr. Allen believes that the 10K Strategy is less risky than owning stocks or mutual funds, and why it is especially appropriate for your IRA.

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