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Kim

Auto-trading

12 posts in this topic

We are pleased to announce that we are now offering auto-trading effective February 8, 2014. This post provides full details about our auto-trading program.

What is auto-trading?

Auto-trading is when subscribers of trading newsletters prefer that their accounts be traded automatically based on the newsletter's trade alerts. With auto-trading you can allocate a portion or all of your account (percentage, dollar amount, or number of units) per recommended trade and we place the trades for you. Please read SEC Risk Disclosure on Autotrading.

How our auto-trading is different from most other services?

Most services send the broker emails including trade alerts and the broker's trade desk places the orders in the client accounts. In some cases (like auto-trading with Interactive Brokers), this is done through third party providers (Global Auto-Trading). In our case, the trades are placed directly by Lorintine Capital, LP. By doing that, we are eliminating the middle man (the broker's trade desk or GAT). This creates better and more reliable execution, especially in fast moving markets, and reduce costs. Most other competing services cannot do this because they are not licensed investment advisers.

Which strategies are auto-traded?

We start with auto-trading Anchor Trades and LC Diversified.  We will be supplementing this with more strategies in the future as we expand. Contact Chris and Jesse for more details or me through the site if you are interested.

 

We do not offer auto-trading for SteadyOptions and have no plans to do it. SEC considers newsletters that engage in auto-trading to be investment advisers, so most newsletter that engage in auto-trading are breaking the law and are exposed to lawsuits like this one. You can read more details here.

 

What is the account size for auto-trading?

We auto-trade the following account sizes:

  • LC Diversified: $20,000-120,000
  • Anchor Trades: $50,000-120,000

For larger account sizes, we recommend using our Managed Accounts.

 

Clients have full access to their accounts through either tdameritrde.com or advisorclient.com.  They can view them at any time.  They can deposit/withdraw cash as needed by contacting us or doing it themselves online, as long as they stay within the specified range.

Which broker we use?

We will be using TD Ameritrade Institutional. We will provide you with all necessary paperwork to open a TD Ameritrade Institutional account. Lorintine Capital has negotiated a competitive commission rate of only $0.75 per options contract and no ticket charge. Discounted rates on both equities and mutual fund trades are also available.

 

We are aware that many of our existing and prospective members have accounts with IB. However, members cannot use their existing accounts anyway since all accounts have to be under the institutional platform. 

Do we accept international clients?

Yes, although TD Ameritrade Institutional makes all final decisions. If you are not a US citizen please contact Chris or Jesse to find out if your application could be approved. Currently they won't accept Canadian clients. We've considered auto-trading with Interactive Brokers as well but we found out they also will not accept Canadian clients. For this reason we are currently only using TD Ameritrade Institutional.

Canadian clients interested in auto-trading (or managed accounts) should contact Chris or Jesse.

 

Can the auto-trade account be an IRA account?

 

Yes.

How much does it cost?

The auto-trading fee will be $50/month per account per strategy for the first strategy/account, and $40/month for each subsequent strategy/account. The fee will be deducted directly from your trading account. For comparison purposes, GAT is charging $70/month for the first service and $30 for the second service. They count each allocation line as a service for auto-trading billing purposes.

 

When considering the benefits of direct execution, low commissions and low auto-trading fees, our auto-trading program is among the cheapest available on the market.

To be eligible for auto-trading, you need to maintain an active subscription to the respective service. The auto-trading fee is in addition to the subscription fee you pay for the service. Members can still remain self-managed if they want and continue paying the subscription fee only. We will continue posting the trades on the forum as we do today. 

 

You can auto-trade several accounts under your name or your spouse name. Each account is be charged a separate auto-trading fee, but you will pay only one service subscription fee.

 

Do we earn any fees or commissions from TD on the trades we place?

 

No. This is called a "soft money" arrangement and we do not do this.

How to start

If you don't have an active subscription, subscribe to the appropriate package. After your forum account is activated, please contact us for further instructions:

For LC Diversified
, PM or email Jesse Blom at jblom@lorintinecapital.com.

For Anchor Trades, PM or email Chris Welsh at cwelsh@lorintinecapital.com.

 

You are welcome to post your questions/comments.

actonwang and femape like this

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We will update the post as we get more questions. You can post your questions/comments here. The first update was about IRA accounts - the answer is yes, all strategies can be traded in IRA account.

 

Here is an example how the fees are calculated:

 

A member who wants to auto-trade Anchor Trades in two accounts: his and his spouse IRA, will pay the subscription fee for the Anchor Trades service (currently $99/month) and two auto-trading fees ($50+$40).

actonwang and femape like this

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I just checked with TD's Institutional office, the fee can be paid out of the account regardless if it is an IRA or not.

 

Yes, we deduct fees from IRA's and it is NOT a taxable event.  Good question.

femape and actonwang like this

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Existing members will always be grandfathered at the price they signed up as long as they maintain an active subscription. This has been our policy since inception, and we have plans to change it. Of course if someone cancels and wants to re-join, he will have to pay the price in effect at the time he re-joins.

femape and actonwang like this

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Existing members will always be grandfathered at the price they signed up as long as they maintain an active subscription. This has been our policy since inception, and we have plans to change it. Of course if someone cancels and wants to re-join, he will have to pay the price in effect at the time he re-joins.

 

Can grandfathered members switch to a different payment frequency (i.e. from monthly to quarterly or annually) at the grandfathered rate, or would they have to take the current rate to do so?

flokebroke, femape and actonwang like this

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