Ask Doc You're flooding our e-mail inbox with questions about Advanced Options...
Last week, we asked you to send your questions our way, and you delivered. So today, we're dedicating this issue to answering some of those questions.
As always, if we didn't answer your question, or you have something else to ask, write us here: [email protected].
Here goes...
Q: In your option services, what do you do in an extended down market? For instance, if you're doing covered calls, the stock price might fall below the downside protection created by the covered call? How do you handle that?
And in Advanced Options it seems like all the emphasis is on recommending stocks that will increase in value. What do you do when they go down? Do you have a specific bear market strategy? – M.L.
A: Being able to navigate a bear market is the true test of any trader. In Advanced Options, we have the tools to make money if stocks go up, if they go sideways, and even if they crash.
We have two main option trades we will be taking advantage of in this service. The first is a bull spread, which can produce massive profits as stocks go up.
The second is a calendar spread, which can make money if stocks stay flat. It's a neutral strategy, but we can make it slightly bullish or slightly bearish depending on our outlook for the underlying stock and the broad market.
For folks who are worried about a market crash, we do have a strategy that will make money as stocks fall. It's called a "bear spread." You can think about a bear spread strategy as the exact opposite of a bull spread... so you don't have to learn a whole new strategy if Porter comes out with a short recommendation or if you find a company you know is headed to zero. We cover the bear spread strategy in detail in a special report called "Profit When a Stock's Price Goes South."
Bear spreads are a powerful tool in a bear market as they can turn a 10% drop in a stock into 200% or higher gains. If you own a few bear spreads when the market drops 20% or 30%, you can offset a lot of losses you might take with your long positions.
Q: Will we be able to do Advanced Options [trades] in IRA accounts? – J.T.
A: We've reached out to a few brokers and they do allow Advanced Options trades in IRA accounts. Typically, brokers won't allow trades that involve naked options. There's far too much risk. We agree, and that's why we don't use naked options. With our trades, we know exactly how much we can lose in each trade, so our risk is defined. That's why brokers are more willing to allow our trading strategies.
It's important to note that different brokers have different regulations when it comes to which option strategies can be permitted in IRA accounts. Give your broker a quick call and see if you're allowed to trade option spreads in your IRA. And if you have any pushback from your broker, drop us a note at [email protected].
Q: I am an Alliance member. Is Advanced Options included in that? – L.K.
A: Of course! As promised, Alliance members receive all new services we publish – including our new Advanced Options advisory – at no additional cost. You should see Advanced Options under your list of active subscriptions once you log on to our website.
Q: Does the Masterclass only cover the options strategy for Advanced Options or other options strategies? I've never used options before so don't know much. – A.R.
A: The trading strategies we use in this service are advanced and can take more than a few minutes to comprehend. You need to have a firm grasp of the basics before you start using our trading strategies. With that said, we designed our Master Course to work for folks with no understanding of options and turn them into expert traders in a short amount of time.
We cover all the basics thoroughly, so you don't even have to know what a call or a put is before you subscribe. I've taught hundreds of people how to trade options, and teaching is one of my passions. I'm confident you won't find a better options education anywhere else than what you'll receive as an Advanced Options subscriber.
Q: Do you know when the first recommendation will be available? – K.G.
A: Advanced Options will publish new trading ideas on the second and fourth Monday of each month. For this month, that would be this week.
However, we've adjusted the schedule this month to give new members enough time to work through the educational materials and to avoid publishing on Christmas Eve. The market is scheduled to close early that day.
For this month only, we'll publish on December 17 and December 31. If you're already subscribed, take the extra time to make sure you understand the nuts and bolts of our strategies. Read our "Guide to Advanced Options" report and go through our workbook, where we walk you through live examples of previous trades. And if you're considering joining, you still have plenty of time to dive into our educational material before our first trade goes live next Monday.
If you don't want to miss it, click here to get started with Advanced Options now.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
Baltimore, Maryland
December 11, 2018