|
|
- Who developed these strategies?
The strategies have been used for years by professional floor trades and trading firms.
- Where does the option pricing come from, which exchange?
Software takes the best market from all exchanges.
- What if my brokerage firm won’t allow me to put “this” position on?
Your broker may have requirements with regard to minimum account size and margins required for
implementing some positions. Check with your broker regarding their requirements. However, most of the strategies
created by the software are hedged position with limited risk. Many brokerage firms do not look at the entire position,
but assess risk based on each leg of the position. Make sure that your brokerage firm assesses risk based on the
overall position, not simply the legs.
- What are the risk margins associated with the position?
Your brokerage firm determines this. Margin requirements vary from firm to firm. Option specialty
firms are more likely to assess risk based on the risk associated with the overall position, not simply each leg of the
position, this reduces the margin requirements. You should also check with you broker, as some strategies you may
not qualify for.
- I’ve heard that the majority of options expire worthless, why should I waste my money?
Only about 50% of options can expire worthless. For every call option that is in-the-money there is an out-of-the-money
put option that expires worthless and for every put that expires in-the-money there is an out-of-the-money call that expires worthless. Many investors purchase out-of-the-money calls or puts as a speculation mechanism.
Many of these options finish out-of-the-money and if the investor fails to sell them for a profit or loss they will expire worthless.
- When should I close out my hedged position before expiration?
When the underlying has reached your target price.
When you have changed your sentiment.
When the premium no longer exists, i.e. the option is so deep-in-the-money, or so-far-out-of-the-money that they
are no longer affording you the required protection. In this case, you may want to roll into another option that will limit
your risk more appropriately.
When the protection is no longer needed and/or the underlying stock position closed out.
- Can I add my current options positions into the software?
No
- How can I include my futures contract positions?
At this time your futures contracts may not be included in the program.
- Does it make sense to buy options on low priced stocks?
That would depend on the amount of risk that you are willing to assume and the price of the options.
If you were willing to assume 10% risk and a move from the current price to zero would exceed your risk parameters
then you should buy options, depending on the price of the options. The price of the options must take into account
how long you are looking to protect the position. If you are looking to position for a period of time that exceeds the
cost of the protection then you may not want to purchase options.
- Does the software recommend which side of a trade to leg into first?
No. However, we suggest that you leg into the “hard side” first. For example, if you are seeking
to put on a bear spread for a stock that is declining rapidly we would suggest buying the put first at the price of that side
of the position is increasing in cost and probably harder to execute (due to higher demand).
- Can the software scan for attractive covered call positions?
No, the software is not intended to scan the market for covered calls.
- How does the software compare to OptionVue, Optionetics, MetaStock, etc.?
RiskCompass is an easy to use, proactive risk management solution, which mitigates risk. The other
firms offer complex analytics, charting features, and detailed option chains. Usually they only quantify risk not offer
alternatives to mitigate the risk. RiskCompass can work in conjunction with these products.
- Can I use the software with any data provider?
The software includes a link to a data provider, which is already included in the monthly license fee.
By doing this we have reduced the monthly cost to all users. If you already have an affiliate data provider, then
you may purchase the software independently.
- What system requirements are necessary to operate the software?
The software is designed for Windows 2000, Windows 98 or Windows NT4 (with Service Pack 6a).
- Does the software work for Europe or Asia?
The software’s data feed is currently for U.S. market equity and option prices. We are working on a
version for international markets.
- How many trades do I have to do to make up for the monthly cost?
Could be 1 trade. Your payback will depend on strategy selected, your trading history
and market volatility.
- What type of trader/investors is the software geared for?
The software is intended to be a proactive, personal risk manager. Both the short-term trader and
long-term investor can effectively utilize it.
- Do you have a version that let’s me do calendar spreads?
Not at this point. We may offer this enhancement in a future version.
- How much technical support is available?
We provide technical support, which ensures you, can download and operate the software effectively.
We will walk you through the process and troubleshoot any issues.
- Is technical support available 24/7?
Technical support is available during market hours, 5:30am through 2pm PST (Market Hours).
- Can I manually adjust the # of contracts and pricing?
Yes, you can manually adjust the pricing and # of contracts in the software.
- Can I add my own strategies to the software?
No, you cannot automatically add strategies to the software.
- Why am I limited to these strategies?
The strategies included in the software are the most effectively strategies employed by profession
market makers and traders for decades.
- Can I purchase the software up front instead of monthly?
You can purchase the software for 6 months, which maximizes your discount.
- How do you ensure my data doesn’t pass across the Internet (security)?
No data passes from your computer to our servers other than the initial software download and a
monthly test to ensure your software license is up-to-date.
- How do I evaluate my position if I get legged out of one side?
The strategies implemented are multi-strike and trade for one price as a net debit or credit.
They will not be legged into, unless you specify to your broker that you want to trade these strikes independently.
|
