Trade-Specific Questions
I tried to sell /ES options contract, but was rejected? What am I doing wrong?
Selling options contracts, especially on futures like /ES, can expose you to significant risk. Brokers generally require traders to meet certain requirements before allowing them to sell or “write” options contracts, especially on a naked basis.
Here’s what you might be encountering:
Account Permissions: Not all accounts are approved for selling options on futures. This is especially true for selling naked options which has unlimited risk. You need to have specific permissions set up with your broker.
Account Size: Brokers may have a minimum account size to trade certain products. Selling options can have significant margin requirements, especially if they are naked options (not covered by a corresponding position).
Margin Requirements: If your account does not have enough margin to cover the potential liability of the option you are trying to sell, the broker will reject the order.
Experience: Brokers often require traders to demonstrate a certain level of experience or understanding of the risks involved before they are allowed to engage in advanced trading strategies, such as selling options.
Risk Profile: Your broker may determine that selling an /ES option contract doesn’t align with the risk profile you’ve set or indicated when you opened your account.
Trading Restrictions: Sometimes, brokers might impose temporary restrictions on certain trading activities due to high volatility or other market conditions.
Contract Specifics: Ensure you’re choosing a valid expiration date and strike price. Occasionally, traders might choose a contract that isn’t actively traded or doesn’t exist.
If you’re interested in trading /ES options and your current broker does not allow it, you might consider looking into TastyTrade. You can open an account with TastyTrade through TheoTrade’s link. They tend to be more accommodating for such trades, given you meet their requirements. Always make sure to understand the risks involved and consider speaking with a financial advisor or doing further education before diving into selling options.
What are the requirements for Big Ultima Portfolio Trades?
Certainly. You can find the requirements for this strategy on the bottom of the Ultima Big Portfolio page.
What are the requirements for Small Ultima Portfolio Trades?
Certainly. You can find the requirements for this strategy on the bottom of the Ultima Small Portfolio page.
How should I know what strategy works best during current market conditions?
Staying updated on what the TheoTrade instructors are recommending in the Member Chat Room is a great way to gauge which strategies are most effective under current market conditions. Additionally, if you want a deeper understanding of market behavior and options trading, you may want to check out our specialized classes. For instance, our resource on the Greeks offers insights into how options are priced and how they react to market changes. You can find this resource in our resource section under the title “Strategy Guide to the Greeks.“
For those interested in high-probability options strategies, we also offer a “Strategy Week” class available in our Options Strategy Classes archive. This class delves into techniques for maximizing your odds in options trading.
I took a trade while listening to TheoTrade instructor in the Live Chat Room. Will I receive an update/alert on when to close it?
No. If you entered a trade in the Live Chat Room, you won’t receive any update or alert on when to close that specific trade. Our trade updates are reserved for trades that were initially sent out as official trade alerts. It will be your responsibility to monitor and manage any trade you initiated through the chat room.
My Ultima call option is up 30% in the first 3 trading days. Should I exit the trade?
If your Ultima call option has seen a 30% increase in just the initial three trading days, it’s essential to consult the specific exit criteria for Ultima trades to make an informed decision. To guide you through:
- Access the “Ultima Income Generator” class.
- Navigate to the slide deck provided, starting at Slide #40.
- The slide deck is conveniently located on the right-side information box within the class archive page.
By referring to this material, you’ll be able to assess whether it’s the right time to exit your trade or if there are other strategic steps you should consider. If in doubt, always refer back to the established criteria for clarity.
What hedging strategies is TheoTrade using and where can I learn more?
TheoTrade employs multiple hedging strategies to mitigate and manage risks associated with trading. While most of the classes offered at TheoTrade incorporate a segment on hedging, it’s vital to understand the nuances of each strategy to use the best hedging methods for each specific situation. For ease of access and to learn about these various hedging techniques in detail, visit the dedicated archive section:
- Go to Main Menu.
- Navigate to “Classes Archive”.
- Choose “Hedging Strategies Classes”.
Here, you’ll find a comprehensive collection of tutorials and lessons on effective hedging strategies that you can seamlessly incorporate into your trading practices. Alternatively, you can Click Here for the direct link provided for immediate access.
What is the exit criteria for In/Out Spread strategy?
For the In/Out Spread strategy, the specific exit criteria is detailed beginning on slide 68 of the “In/Out Spreads Class: 2018 Edition.” To access this information, navigate to the class archive page, and you’ll find the slide deck available for download or view in the right-side info box. By reviewing these slides, you’ll gain a comprehensive understanding of when and how to exit your positions using this particular strategy.
Can I trade options in an IRA account?
Absolutely! You can indeed trade options within an IRA account, though there are certain restrictions and regulations to be mindful of. Some brokerages allow options trading within an IRA. Notably, our signature Ultima portfolio allows for the trading of naked options on futures within an IRA. We often recommend TastyTrade as a brokerage for this purpose due to their advantageous margin requirements. However, always check with your brokerage and familiarize yourself with the specific rules and guidelines associated with trading options in an IRA.
Is there a exit criteria on rolled trades in Ultima strategy?
Certainly! The exit criteria for the Ultima Income Generator strategy is detailed on slides #40-53.
Additionally, for a comprehensive understanding of rolling options, Don has recorded specialized coaching sessions which can be invaluable. Here are the links to these sessions:
Rolling Options Part 1: Click here
Rolling Options Part 2: Click here
Rolling Options Part 3: Click here
These sessions delve into the intricacies of rolling options and can provide deeper insights into different strategies’ execution.
Will I receive all of the trades from the Live Room every day?
No, most trades done in the Live Chatroom are NOT sent out as they are usually short-term trades. If you do take a trade that was done by one of the instructors in the Chatroom, you must keep an eye on it yourself as you will not be receiving an update through text message or push notification. You can also email the instructor at [email protected] to get an update on a certain trade they did.
We only send out trades that are at least 15-20 days in duration (they can be closed earlier, but not necessarily). This way it is easier for the full range of our clients to take action on it.
How many alerts should I receive every week?
We don’t adhere to a fixed number of trades each week. On average, members can expect to receive between 1 to 3 trades weekly. However, this can vary: there are ‘busy’ periods with a higher frequency of trades and ‘dry’ spells where trade alerts may be sparse for extended periods.
What strategies are included in the trade alerts?
Our trade alerts primarily feature strategies such as In/Out Spreads, VIX Spreads, Christmas Tree Trades, Small Ultima Trades, among others. For those interested in the Ultima Big portfolio, there’s a separate sign-up process which can be accessed here.
I could not enter/ was not filled into the trade that was sent to me by TheoTrade. Can I do so the next day?
If you were unable to enter or weren’t filled for a trade based on a TheoTrade alert, you can still proceed the following day if the trade’s price remains the same or has improved.
My trade is near the expiration date. What should I do?
If the trade in question originated from a TheoTrade trade alert, you can expect an update from us. We’ll either send out a new alert regarding the trade or Don Kaufman will discuss it in his Friday portfolio update videos. You can access these updates via the Main Menu: navigate to ‘Portfolios’ and then select either ‘In/Out Spreads Trader‘ or ‘ULTIMA TRADES: Infinity Trades & TheoTheta‘.
If this is a trade you’ve initiated on your own and you’re seeking feedback from one of our instructors, kindly email [email protected], and we’ll get back to you promptly.
Why do I receive less than 3 trade alerts per week?
At TheoTrade, our foremost principle is quality over quantity. While we aim for an average of 3 trades per week over an extended duration, there are periods when market conditions are less favorable, leading to fewer opportunities. During these times, our instructors prioritize waiting for optimal conditions rather than forcing trades. Our primary objective is profitable trading, not just trading for the sake of activity.