Any Questions?

I hope you’re enjoying your subscription. By now you’ve had time to check out the current portfolio… read through some of Karim’s recent alerts… and perhaps even act on your first recommendation.

There’s a lot of information to explore. If you have questions along the way, our Member Services Team is ready and waiting to help. You can call us at 866.237.0436 or 443.353.4540, or send us an email by clicking here.

However, before you do that, I want to tell you about our Essential Automatic Trading Millionaire FAQ. It’s a comprehensive report on the most pressing questions about put selling we receive from subscribers.

I’ve included a few of the most frequently asked questions new subscribers have below to get you started.

How much money do I need to sell put options?

It’s important that you have an adequately funded brokerage account if you’re looking to trade options comfortably. This means that you have at least $15,000 at your disposal.

Now, that may sound like a lot of money, but keep in mind… put selling is a technique that serious investors use – not only to generate income… but also to gobble up shares of high-quality stocks at deeply discounted prices.

If you don’t have the necessary capital right now, it doesn’t mean that you’ll never be able to sell put options. It simply means you’re not in a position to maximize the strategy right now.

If this sounds like you, don’t throw in the towel just yet! Bolster your confidence and experience by paper trading Karim’s recommendations right alongside him. Then, when the time comes… and you have funds to commit to the strategy, you’ll be perfectly positioned to begin selling puts with an experienced trader’s edge.

Do I need to special permission to sell puts?

The short answer to this question is “yes”… all brokers require “approval” in order to trade options. Luckily, it’s not difficult to get your broker’s approval. You’ll simply tell your broker that you’d like to sell put options.

He’ll check to make sure that you have adequate funds and ask you to complete a short one-page form. Then, he may ask you a couple of questions about your goals. When answering these questions, the key is to display a confident and upbeat attitude. Your broker just wants to ensure that you understand the strategy you’re looking to use.

You can proudly tell him what you’re looking to achieve, with the help of Karim’s Automatic Trading Millionaire Trading Goals. And you can let him know that you’ve started paper trading to gain confidence and experience.

If you can do that, you should be approved and ready to sell puts in no time!

I fit all the criteria and am ready to go… How do I make trades?

Every brokerage platform is a little different. However, they all require that you know the symbol of the stock and the date of expiration of the option. You will also need to know the number of contracts you wish to trade, the limit price for the option, the length of time the trade is in effect (we recommend that you use only day orders), and finally whether it is an opening or closing trade.

Karim will provide all of the relevant trade details in the alert containing his recommendation. However, you’ll need to use his analysis to determine whether the trade fits within your own personal risk parameters. From there, you’ll need to decide how many contracts you wish to sell.

We recommend that you take your time, and start small in order to build your confidence! There should be no rush in trying to get filled. Karim uses strict limit orders for each trade recommendation he issues, and we suggest that you follow his guidelines. Options prices can fluctuate just like stock prices, and it’s often in your best interest not to “chase” the price. Karim will always send out updates in the event that the limit price needs to be changed because of news surrounding a recommendation.

Is the cash premium always mine to keep?

YES!

Anytime you sell a put option, the cash premium that you collect is yours to keep, free and clear. It will be deposited in your brokerage account immediately, and you can use it for whatever you like.

What is the option’s strike price, and how do I choose the right one?

In simple terms, the “strike price” is the price at which the option can be exercised. When you’re selling puts, your strike is the discounted price at which you’re promising to buy the shares if the stock were to drop low enough.

For example, if you sold a put option on Apple with a $50 strike price, it means that you would buy the Apple shares if, and only if, they fell to $50 before the option’s expiration date.

In Automatic Trading Millionaire, you’ll never have to worry about choosing strike prices on your own. When Karim issues a new recommendation, he’ll always provide specific instructions as to which strike price you should select.

When I’m selling puts, how many contracts should I choose?

The answer to this question varies, and there’s no right or wrong answer. It all depends on your personal comfort level. You’ll want to keep in mind that every contract represents control over 100 shares of stock.

So when you sell one put option, you’re collecting a premium that’s equal to 100 multiplied by the strike price. The more contracts you sell, the larger your cash premium will be.

However, you’re also obligating yourself to buy the underlying shares of stock. So you’ll want to think carefully about how much of the stock you’d like to own if the shares were “put” to you.

We recommend starting small and using each success to build your confidence. This way, you’re not overextending yourself from the very beginning.

I hope you find our Essential Automatic Trading Millionaire FAQ useful. If you can’t find the answer to your question, please feel free to contact our Member Services Team at 866.237.0436 or 443.353.4540 or email the team by clicking here. We’re here to help each and every one of you!

Sincerely,

Ryan Fitzwater
Director of Research, The Oxford Club