We are pleased to announce that we will start offering auto-trading effective February 8, 2014. This post will provide 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 will be 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 will be auto-traded?
We will begin with auto-trading Steady Condors, Anchor Trades, and the Ratio Diagonal Strategy (currently the SPY Ratio Diagonal). 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. The Diagonal Strategy will be available to Anchor Trades members only.
What is the account size for auto-trading?
The account size for Steady Condors is $40,000-120,000 (1-3 units), for Anchor Trades $50,000-120,000 and for the ratio Diagonals $20,000-120,000. For larger account sizes, we recommend using our Managed Accounts.
Which broker will 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/contract with no ticket charge, and we are optimistic about further reductions in the future as monthly contract volume grows. Auto-trade commissions are based on the volume of all accounts so everyone will benefit from future reductions regardless of account size.
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 institutional platform.
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, so they might consider Steady Condors as two services and charge $100/month.
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.
Please see full details here.