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 all of our trades are okay to do in an IRA.
Subscribers to Terry’s Tips 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.
How much does Auto-Trade it cost?
If you Auto-Trade with Tastyworks, there is no charge for Auto-Trade other than their normal commission rates ($1.65 per contract for opening positions, no charge for closing positions). Tradier has an agreement with a Toronto-based broker called Global Autotrade whereby Tradier covers Global’s normal fee of $50 per month for one portfolio, $30 for a second portfolio, and $10 for additional portfolios if you trade 100 contracts each month. Tradier’s total commission fee is $10 which should save you hundreds or thousands of commission dollars each year. You may want to trade two or three Terry’s Tips portfolios in one account at Tradier if you want to guarantee hitting the 100 per month contracts level,
How do I sign up for Auto-Trade?
First you would sign up for at Terry’s Tips and select the portfolio(s) you’d like to follow. Then you would open and fund an account with Tradier or Tastyworks, 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?
Contact us directly for more information about brokers and Auto-Trade. At the present time, we only have arrangements with tastyworks and Tradier. For many years, we dealt with thinkorswim at TDAmeritrade, but when Schwab bought the company, they eliminated the Auto-Trade service.
Does my Auto-Trade account have to be separate from other accounts?
Yes, at both tastyworks and Tradier, they require separate accounts for Auto-Trade. You may have as many portfolios as you wish in the Auto-Trade account, but you can’t place trades on your own in them (unless you want to opt out and close out all your positions.
Do you have access to my Auto-Trading account?
No, we do not know how many units you are trading or how many portfolios, and we don’t know your password or account number.
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-Trade Accounts?
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.
What should I do if I decide to add (or remove) other portfolios through Auto-Trade?
Please email email@example.com with the name of the portfolio you will be adding (or removing).
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 firstname.lastname@example.org.
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).