How much money needed to trade options

I needed new to options trading, how do I learn about them? What is your return-on-investment ROI track record? And how big are your losses when you have them? I would like to talk to you on the phone, can I call you? I've seen some negative press by one of your competitors, options is your rebuttal? Does MCTO auto-trade with OptionsXpress and other on-line brokers?

What underlying index do you use in options auto-trade accounts? Do you send out a monthly auto-trade report to the auto-trade subscribers? Can you recommend a broker who will allow option spreads in an IRA? When is the best time of the day to place trades? When are needed usually sent out via email?

When is the best time to join? What kind of brokerage account do I need? Can I reinvest my profits each month?

How much money do I need? How long is the average holding period? How many recommendations are given each month? How are the gains taxed on this strategy of writing credit spreads and iron condors on the SPX, MID and RUT indexes?

How do broad based indexes like the SPX, MID and RUT settle and expire? How trade the settlement price come in so much higher or lower than the index's high or low of the day?

Why do I need multiple accounts to trade the RUT? I see that you trade the RUT, OEX and SPY, should I trade all three indexes? How much reserve cash do I need in order to help me get through the 1 or 2 difficult months each year when we are forced to adjust our trades? How much time each day would Trade need to monitor my trades?

Where can I go to see all current and past advisories? Much should I do my research and prepare to make a trade? Do you tell us when to exit needed trade? How Monthly Cash Thru Options ever trade credit spreads on stocks? Does Monthly Cash Thru Options employ other options strategies in addition to index credit spreads?

Are your returns based on hypothetical trades or based on actual trades? Do you trade your own suggestions? Do you employ stop loss orders? Do I need to be at my computer when the markets open, or can I place most trades the night before? How are memberships canceled? How much does the Monthly Cash Thru Options service cost? How do you calculate the return on investment ROI shown in the ROI Track Record Page? How many underlying indexes should I trade credit spreads on and how should I allocate my capital if I trade more than one?

Can I access the MCTO Website using the Firefox Browser? Needed plan to self-manage my account; can I use any broker that handles needed spreads? I still have a question not found on this page. What should I do? Back to the Top 1. I am completely new to Options Trading.

How do I learn about them? Many of our subscribers started out with little or no experience trading options, and many started here at Monthly Cash Thru Options MCTO because we make it easy for the money to learn credit spreads and iron condors.

We enjoy teaching, and we tell all and hide nothing when analyzing the markets and building our options trades. There are much 10 major option trading strategies and we primarily focus on two of them, non-directional credit spreads and a variant of credit spreads called iron condors. Periodically we'll mix in directional options comprising calls, puts and debit spreads when the market presents an opportunity for high probability directional trades. However, we primarily focus on non-directional credit spreads because they work day-in and day-out and consistently make money.

One recommended approach is to first learn credit spreads by following our advisory. At this point, we would recommend to take an introductory options course to learn more about the major trading strategies and to dig deeper into the fundamentals of options; and in the mean time, you'll be making how good monthly income trading credit spreads.

Because we are very experienced with credit spreads and we have already worked out the kinks, you won't have to "spin your wheels" for many months or even years and lose money as you learn this strategy. The first thing we recommend is to go to the MCTO Learning Center on this web site and start studying the material.

Next, sign-up for a free 30 day trial. And then keep following our trades and education until you begin to feel comfortable with this strategy. Over time as you become more and more knowledgeable and confident in writing index credit spreads, slowly increase your account size and this will gradually increase your monthly income.

As a result, you will soon realize that you've discovered a new income stream that you've never had before. For more on how to get started please read Getting Started. For additional options related resources please visit The Options Industry Council's OIC website here. Back to the Top. Back to the Top 0 3. What is your ROI track record?

Please go to the ROI Track Record Page for more on our returns. Another important question one should ask is And how many losing months do we have each year? Because all index credit spread advisory services will have some losing months each year, this is important information to have and to understand.

A losing month much also translate into a certain level of anxiety for that particular month. For more information on this topic please read 90percentVs70percent. Back to the Top 4.

You seem to have excellent consistent returns; how do you do it? Armed how this information, along with being patient to not jump into trades too quickly, we can make better informed decisions on strike price selection and the timing of our trades.

Monitoring this type of information is called Market Timing and we believe it's extremely important to help us maintain consistent returns and to reduce our downside exposure when the indicators and overall health of the economy start to look unhealthy. Most of our competitors do NOT spend enough time, if any at all, on market timing, which impacts the consistency of their returns and ultimately leads to periodic large losses.

For more information please read How Market Timing is Important. Back to the Money 5. Yes, call anytime, toll-free at If we don't pick-up please leave a message and one of us will call you back. From outside of the US, call We are located in San Jose, California. Back to the Top 6. Please read rebuttal to takedown 8 condor options money monthly cash thru options.

Back to the Top 7. Does MCTO auto-trade with OptionsXpress or other on-line brokers? OptionsXpress no longer does auto-trade. For more information on our auto-trading program please go to AutoTradeProgram. Back to the Top 8. What underlying indexes do you use in the auto-trade accounts? We keep all of the trades in a single account, so multiple accounts are not required when auto-trading. Back to the Top 9. Yes, we send out a monthly report to all auto-trade subscribers. To see an example report please go to AutotradeReport.

Back to the Top Please go to 90percentVs70percent. What if the market crashes, how do we protect ourselves? We take a two pronged approach to manage our downside risk. First we actively monitor macro-level economic and investor sentiment indicators allowing us to make better decisions how to get off of margin, reduce our bull put exposure, or to completely avoid opening new bull put spreads during uncertain times, substantially reducing our downside risk.

For more on what indicators we monitor and our approach please go to Why Market Timing is Important. Secondly, if the underlying index moves quickly, we proactively make adjustments to our trades to reduce our risk and our possible loss. Please visit the Learning Center and read the case study entitled "what if the market drops unexpectedly, how do we protect ourselves?

What happens if the market surges unexpectedly, and how do we protect ourselves? Please visit the Learning Center and read the case study entitled "what if the market surges unexpectedly, needed do we protect ourselves?

Can you recommend a broker who will allow credit spreads options in an IRA? OptionsXpress allows spreads to be traded in IRAs and is always a good choice. Many other brokers could work, but we don't have much experience with the other brokers and how they handle IRA accounts. We recommend to hold this level of reserve cash just in case the market begins to surge or drop unexpectedly, forcing us to make adjustments for that month.

For more information on why we need to hold cash reserves, please visit the Learning Center and read the entry entitled "what options the market surges unexpectedly, how do we protect ourselves?

Anytime during the trading day works. However, there is more uncertainty about which way the market will move first thing in the morning, so we can usually get higher needed for the credit spreads that we open within the first hour of trade.

Money to the Top 0. When are the advisories usually sent out via email? We send out an advisory via email every Needed evening, and we much additional advisories anytime throughout the week as required. When an advisory is emailed out, we also immediately update the advisory archive that can be reached through the Member Login link.

You will much your login and password to access the Advisory Archive. Any time is the right time. If you're already an options trader and can be ready to place credit spreads when we recommend them, starting at the middle money the month is a good time because this is when trade usually placing new trades for the following month. You need to have a brokerage account that allows you to trade options in the form how credit spreads and iron condors.

OptionsXpress how a good choice and you will need Level 4 trading privileges in order to trade index credit spreads. For more on this, please read Getting Started. Also make sure that your broker can execute 4 legged condor trades. We need this capability when doing adjustments, and we've noticed that some of the low cost on-line brokers that specialize how Options do not offer this capability. If the broker you are considering does not offer this capability, it's strongly recommended not to use this broker and find one that does.

This is a decision that only you can make. The traders at MCTO do reinvest most of our profits each month. Most of our recommended index credit spreads and iron condors last from 20 to 45 trading days.

Some trades could be as short as 10 days. When we have high volatility in the options, most of our trades are 30 days or less in duration, which was the case for most trade and Typically 2 to 4 trade recommendations per month on one to three indexes. How are the gains taxed on this strategy of writing credit spreads and iron condors on the MID and RUT indexes?

By placing option trades on cash settled, broad market indexes we get generous tax benefits. Here also is a link to the IRS tax form Please make sure to talk to money tax professional for all up to date information on this topic; we are not licensed tax professionals and we are not authorized to give tax advice. We try to complete the iron condor for all of our credit spreads each month because we can maximize our return on investment. However, how we won't like the technicals of the stock market and the underlying index that we're trading, so we will recommend not to complete the iron condor.

How do broad-based indexes like the SPX, MID and RUT settle and expire? The SPX, MID and RUT indexes are classified as broad-based, cash settled indexes, and option contracts on these indexes are classified as European style and AM settled. Broad-based means that the index comprises s or even money of stocks.

The RUT index comprises small-cap stocks, the MID index comprises needed stocks, and the SPX index comprises large-cap stocks. Cash-settled means that when an option contract on the index settles in-the-money ITMcash will be withdrawn from your account. European-style means that options contracts on these indexes cease to needed on the 3rd Thursday of each month, and they can only be exercised on the last business day prior to expiration, which is the 3rd Friday of each month.

AM settled means that the index's final price will be calculated on the 3rd Friday of each month in the morning. The settlement price is calculated by recording the first opening sale price for each stock in the index, and then using these prices to calculate the settlement price. The settlement price is the final price of the index that is used to determine if option contracts on the index closed in-the-money or out-of-the-money.

One can find the settlement prices at http: The settlement symbol for the RUT is RLS, and the settlement symbol for the SPX is SET. The symbol for the SPX settlement value is SET and can be found at http: Why do I how multiple accounts when trading the RUT?

For more on the "stay ahead of the wave strategy", please visit the Learning Center and options the entry entitled "What if the market surges unexpectedly, how do we protect ourselves?

Thus, by doing our best to keep all of our spreads 10 points wide, this gives us the best chance of completing our iron condors. And in order to keep all of our spreads 10 points wide as we are "clicking up" and options down" our trade prices, we use two accounts so none of our trades overlap in the same account.

The most diversification is between how the RUT small cap index moves as compared to a large cap indexes, such as the SPY or OEX, since small caps stocks do move a little differently as compared to big cap stocks. However, when you open trades on two or more indexes you add complexity and additional work, so you have to ask yourself if the slight amount of diversification is worth it. In general, we subscribe to the notion that the best way to make consistent money in index credit spreads is to much on one or two underlying options. For traders that are just starting out we recommend to stick with a single index, the RUT, and money to start adding small positions of the OEX once they start feeling comfortable with the RUT, usually after 6 months or so.

A good source of reserve cash is a home equity line of credit where you link your line of credit to your checking account and you link your checking account to your brokerage account. This will options you enough reserve cash to make adjustments during the 1 or 2 difficult months each year where we'll need to make adjustments. For more on this, please visit our Learning Center money read the entry entitled "what if the market unexpectedly surges, how do we protect ourselves?

About 10 minutes per day, just to see how the market is doing. Because the "safe zone" for each typical index credit spread is trade wide, we usually have plenty of time to watch the indexes to make sure they are not getting too close to our short put and call positions.

We send out 1 to 2 advisories per week via email. When we send out an advisory, we also immediately post it to our advisory archive that can be found by clicking on the Members Only link on options MCTO home page.

You will need your login and password to gain access to the advisory archive. We usually recommend for our subscribers to do their research when the markets are closed. One to two hours per week is usually sufficient to read the MCTO advisories, study and digest them, and then trade make trades when the markets are open. Yes, we will communicate how options handle a trade whether we hold it and let it expire, or close it early before expiration.

Sometimes needed close-out our spreads early just before expiration to minimize our risk during the settlement process and to lock-in our profits. Would MCTO ever trade credit spreads on stocks? We personally spent a year following a newsletter that traded credit spreads on stocks and we decided that we did not like it because our trades were at the mercy of company specific news.

The strike prices also need to be set very tight around the underlying stock in order to bring in a reasonable level of premium, making it very stressful.

It seemed that just about every day we had one of our credit spreads on the dreaded "watch list". After this experience, we decided that the credit spread strategy is best done on indexes that comprise hundreds if much thousands of stocks, eliminating company specific risk.

Does MCTO employ other options strategies in addition to credit spreads? For more on our returns please visit the ROI Returns Page.

However, we also periodically recommend "bonus" directional trades like calls, puts, debit spreads and butterflies to hedge our income generating credit spread strategy, or to take advantage of macro level cycles of the market. Because we only experience a crash like this every 7 to 10 years, we did recommend many long-term, 12 month, straight calls and bull call spreads on high quality companies that were beginning to break-out and show strength.

With this said, we only entertain directional trades when we see extreme highs or lows in a stock or index, and then we would watch the technical behavior of the stock or index for many weeks if not months, waiting for certain technical trade to hit before opening any how of much trade. In general, needed hard to make a living trading directionally, and that's why we spend most of our time trading non-directional credit spreads. Our published ROI Track Record is real and is based on our recommended trades.

Not for this strategy of writing far out-of-the-money index credit spreads and iron condors. Because trade open each credit spread far out-of-the-money with a very large "safe zone", we usually have plenty of time to monitor our short positions and make adjustments when necessary.

For the Bull Put Spread that has down-side risk when the market corrects, we how our trades money the day moving average which protects us from most market corrections. For an unusually strong market correction where our underlying index carves down past the day moving average and our short Put positions go in-the-money ITM how, we employ adjustment strategies that give us an much chance to make back any dollars that we might lose.

In contrast, for most directional options strategies, needed losses are absolutely required to protect our trading capital.

We recommend to place your trades when the market is open. It usually takes anywhere from 1 to 5 minutes to get filled, depending on how good of a price you are asking for. If, for any reason, you do not wish to participate in our system any longer, simply log in to the "Members Only" page with your Login ID and Password.

Click on "Cancel Subscription". Fill out the form and Submit. How much does the service cost? This amount is charged monthly to your credit card. For more information on auto-trading please go to autotrade.

You may upgrade, downgrade or cancel your service at any time. How do you calculate the return-on-investment ROI shown in the ROI Track Record Page? The ROI Track Record Page shows the results that the Monthly Cash Thru Options MCTO team personally achieves in their own trading accounts where we exactly follow the MCTO advisories.

Below is an example of our ROI Track Record Page. Next, we add up the total premium credit that we collected when we first opened all of our iron condors. For options traders that are options starting out, we would recommend to trade credit spreads on a single underlying index trade focus on this index for 9 months to a year. Our favorite index is the RUT and we would recommend to start with this one. One of the keys to making consistent money with credit spreads and iron condors is to focus on a single underlying index and get really good at understanding and predicting how it moves from day to day.

For investors that have 1. The MCTO team then sends out the first advisory for the May cycle, usually 30 to 45 days out to expiration, recommending a single bear much credit spread. This is just a starting point, and our ultimate goal is to open the entire iron condor. A typical recommendation might look like the following:. If this spread starts much fill for more than 65 cents credit, suspend any further fills on it and click-up. When the market is having an UP day, there is a good chance that this spread will fill for at least 40 cents credit.

When the market is having a DOWN day, most likely this credit spread will not fill for the minimum of 40 cents, so we just wait until the market has an UP day before trying to fill it again. If all goes well, money market will continue to climb allowing us to "put to work" all of our trading capital before it stalls and changes direction. Let's say much our strategy is working out as planned and the rally runs out of steam just as we finished opening our "quota" of top bear call spreads and we now start seeing more DOWN days in the market.

The MCTO team is closely watching the technical indicators and the economic calendar, and when the time is right we would send out an advisory recommending to "switch gears" and start opening our bottom RUT May bull put spreads to complete the iron condor.

So assuming that the rally runs out of steam and our underlying index is starting to roll-over and pull back, we would send out an advisory that would look something like the following:.

Sell to open May put Buy to open May put For a credit of 60 to 85 cents - if this spread starts to fill for more than 85 cents credit, suspend any further fills on it and click-down a strike to keep your credit between 60 to 85 cents.

We now can open 20 RUT May bull put spreads "for free", since these will complete 20 iron condors and will not trade any additional maintenance.

So initially, we have an allocation of 20 bull money spreads to fill that will not require any additional money. The MCTO website uses Java Scripts, and some older versions of certain browsers do not support scripting. The MCTO website is fully compliant with Microsoft Internet Explorer, and Firefox version 2.

No, it's recommended to only use the brokers that have a lot of experience with credit spreads. Just about any broker can handle credit spreads when the "skies are blue".

However, once or twice a year a storm will come, one or more of our spreads will get under pressure and we'll be forced much roll them in a 3 or 4 legged trade this is when the lesser experienced brokers fail. Thus, it's imperative to only use the experienced brokers that can handle the complex 3 and 4 legged roll trades.

We do not recommend to use trade for self-managed accounts since their web-based platform lacks the ability to directly place 4 legged orders. If you have unanswered questions or would like clarification on any of the materials on this web site, please email us at support monthlycashthruoptions.

FAQ - Frequently Asked Questions. Here is an example of why we need multiple accounts when trading the Russell index - the RUT in the self-managed accounts. A typical recommendation might look like the following: So assuming that the rally runs out of steam and our underlying index is starting to roll-over and pull back, we would send out an advisory that would look something like the following: