Auto-Trade 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 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 autotrade@terrystips.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 autotrade@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).

March 22, 2023

March 21, 2023 Terry’s Tips Trade Alert – Honey Badger Portfolio

We are adding a spread to raise delta:

BTO 1 QQQ 19May23 310 call (QQQ230519C310)
STO 1 QQQ 31Mar23 319 call (QQQ230331C319) for a debit of $11.45 (buying a diagonal)

Be prepared to change this (these) price limit(s) by $.05 or more in order to get an execution.

Happy trading.

Jon

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March 20, 2023

March 20, 2023

Dear [[firstname]],

Here is your Option Trade of the Week, as included in this past weekend’s Saturday Report for our Terry’s Tips Insider Members. It was another post-earnings play, a strategy we’ve had success with of late.

Before getting to the trade, I wanted to let you know that the Terry’s Tips portfolios are gaining steam. The combined four portfolios are beating the S&P 500, led by the Honey Badger portfolio (it trades QQQ options), which is up a whopping 19% so far this year! Don’t forget that our portfolios beat their underlying stock performance by an average of 22% in 2022.

Don’t get left behind. For our loyal newsletter subscribers, I’ve decided to keep the sale going that saves you more than 50% on a monthly subscription to Terry’s Tips that includes …

A month of all trade alerts in our four portfolios, giving detailed instructions for entering and exiting positions.
Four to five (depending on the month) weekly issues of our Saturday Report, which shows all the trades and positions for our four portfolios, a discussion of the week’s trading activity and early access to our Option Trade of the Week.
Instructions on how to execute the 10K Strategy on your own.
A 14-day options tutorial on the opportunities and risks of trading options.
Our updated 10K Strategy white paper, a thorough discussion of the strategy basics and tactics.
Full-member access to all our premium special reports that can make you a wiser and more profitable options trader.

To become a Terry’s Tips Insider Member, just Click Here, select Sign Up Now and use Coupon Code D21M to start a monthly subscription to Terry’s Tips for half off. You can cancel after a month but, of course, still keep all the valuable reports.

We look forward to having you join us! Now on to the trade …

If You Build It …

They will buy. At least that’s what homebuilders think based on the latest builder confidence survey, which ticked higher for the third month in a row. On Wednesday, the Census Bureau will release February’s residential construction numbers, and the market is expecting gains in starts and completions.

On the company level, Lennar (LEN) reported earnings this week that easily beat on the top and bottom lines. The company also projected home sales for next quarter and the full year that are higher than the consensus analyst estimates. The stock received several target price increases, though no ratings upgrades. The average target price is about 10% above Friday’s close, while the average rating is between a buy and hold. Given that the stock is up nearly 50% in the past five months, it seems some analysts are behind the curve.

The stock is currently riding along the support of its 50-day moving average which came into play after a pullback from a 52-week high hit in early February. The stock pulled away from this trendline after the earnings report, though not far enough to take its support out of play.

Note that the short strike of our put spread is below the 50-day (blue line) and the 20-day (red line), which has turned higher. Thus, the stock will have two pierce two levels of support to move the spread into the money.

If you agree that LEN will maintain its long-term uptrend, using the support of its 50-day and 20-day moving averages, consider the following trade that relies on the stock staying above $97.5 (green line) through expiration in 5 weeks:

Buy to Open the LEN 21 Apr 95 put (LEN230421P95)
Sell to Open the LEN 21 Apr 97.5 put (LEN230421P97.5) for a credit of $0.55 (selling a vertical)

This credit is $0.02 less than the mid-point price of the spread at Friday’s $103.50 close. Unless LEN surges, you should be able to get close to that price.

The commission on this trade should be no more than $1.30 per spread. Each spread would then yield $53.70. This trade reduces your buying power by $250, making your net investment $196.30 per spread ($250 – $53.70). If LEN closes above $97.50 on Apr. 21, both options will expire worthless and your return on the spread would be 27% ($53.70/$196.30).

Any questions? Email Terry@terrystips.com. Thank you again for being a part of the Terry’s Tips newsletter.

Happy trading,

Jon

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March 7, 2023

March 7, 2023

Dear [[firstname]],

Here is your Option Trade of the Week, as given to our Terry’s Tips Insider Members as part of their Saturday Report. I again stayed on the bearish side this week, as this market is looking very vulnerable, especially after today’s Congressional testimony from Jerome Powell.

However, as I did a couple of weeks ago, I’m revising the trade because the position has run away from the opening price. Because of a huge plunge in the stock price today, the trade is already up nearly 20% in just two days. Because I still believe in the premise of the trade, I’m changing the strikes to give you a similar entry credit … and, of course, profit. Good luck with it.

Before getting to the trade, I wanted to let you know that the Terry’s Tips portfolios are on a hot streak. The combined four portfolios are now beating the S&P 500, led by the Boomer’s Revenge portfolio, which is up a whopping 18% so far this year! That’s on top of the 33% gain during last year’s horrible market performance. Overall, our portfolios beat their underlying stock performance by an average of 22% in 2022.

Don’t get left behind. For our loyal newsletter subscribers, I’ve decided to keep the sale going that saves you more than 50% on a monthly subscription to Terry’s Tips. For just $98, you’ll get:

A month of all trade alerts in our four portfolios, giving detailed instructions for entering and exiting positions.
Four to five (depending on the month) weekly issues of our Saturday Report, which shows all the trades and positions for our four portfolios, a discussion of the week’s trading activity and early access to our Option Trade of the Week.
Instructions on how to execute the 10K Strategy on your own.
A 14-day options tutorial on the opportunities and risks of trading options.
Our updated 10K Strategy white paper, a thorough discussion of the strategy basics and tactics.
Full-member access to all our premium special reports that can make you a wiser and more profitable options trader.

We look forward to having you join us! Now on to the trade …

Cry Me a Rivian

Electric car maker Rivian (RIVN) reported earnings on Tuesday after the bell that were mixed at best. The company narrowed its adjusted Q4 loss to beat the consensus estimate but missed considerably on revenue. Of greater importance, however, is RIVN’s expected 2023 production of 50,000 compared to the expected 60,000 units.

But on Friday, word “leaked” of a 62,000-unit goal discussed at an internal company meeting. The shares reacted with a 7.6% surge, but still closed the week lower. Although nobody knows for sure, this looks to me like a classic “buy the rumor, sell the news” scenario.

What is known, however, is that the stock was hit with a number of lowered price targets on the earnings news. Yet even with the reductions, the average target price is nearly double Friday’s close. That’s awfully optimistic for a stock that is down 70% from its 52-week high and 8% so far this year. Moreover, the EV space is getting more crowded, even as the dominant player – Tesla – is enjoying a resurgence.

On the chart, RIVN is trading toward the bottom of a two-month range that is being pressured by the declining 20-day (red line) and 50-day (blue line) moving averages. The short call strike of our bearish credit spread sits above these trendlines, so the stock will have to break through this double-barrelled resistance to move the spread into the money.

If you agree that RIVN will struggle with technical resistance following an uninspiring earnings report, consider the following trade that relies on the stock staying below $19 (green line) through expiration in 6 weeks:

Buy to Open the RIVN 14 Apr 18 call (RIVN230414C18)
Sell to Open the RIVN 14 Apr 16 call (RIVN230414C16) for a credit of $0.45 (selling a vertical)

This credit is $0.01 less than the mid-point price of the spread at Tuesday’s $14.64 close. Unless RIVN falls quickly, you should be able to get close to that price.

The commission on this trade should be no more than $1.30 per spread. Each spread would then yield $43.70. This trade reduces your buying power by $200, making your net investment $156.30 per spread ($200 – $43.70). If RIVN closes below $16 on Apr. 14, both options will expire worthless and your return on the spread would be 28% ($43.70/$156.30).

Testimonial of the Week

I have been a subscriber for about a year. I autotrade in 2 different accounts, all your strategies. I read everything you write on Saturdays. I love your happiness thoughts and everything else. I usually do not communicate at all but I had to tell you how well my accounts with you are doing compared to everything else. You are awesome. Keep up the good work. Thank you. – Maya

Any questions? Email Terry@terrystips.com. Thank you again for being a part of the Terry’s Tips newsletter.

Happy trading,

Jon

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Auto-Trade FAQ

What brokers offer Auto-Trade?

Do you have access to my Auto-Trading account?

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

Do you have access to my Auto-Trade Accounts?

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

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

TERRY’S TIPS STOCK OPTIONS TRADING BLOG

Upcoming Market Dates:

Making 36%

Auto-Trade FAQ

What brokers offer Auto-Trade?

Do you have access to my Auto-Trading account?

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

Do you have access to my Auto-Trade Accounts?

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

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

TERRY’S TIPS STOCK OPTIONS TRADING BLOG

Upcoming Market Dates:

Making 36%

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