From time to time, I get questions about Stock Market Insurance Trader. I will answer them in blog posts like this. If you have questions, feel free to send in an email, or add a comment to this blog post. I’m always happy to help.
I’m new to your website and just looking around. Where can I find out more about your book and the Insurance Agent Trade?
Well, you could buy Stock Market Insurance Trader. It’s available on Amazon/Kindle. If you just want to read a summary of the book, I’ve prepared a free report that will give you the highlights. If you have some experience with trading stock and stock options, it may be all you need to start profiting right away.
Much of the book deals with selling Put spreads below the stock, counting on the stock to rise (or at least not fall too far). You also mention selling Call spreads above the stock, counting on the stock to fall. Can you do both at the same time, counting on the stock to stay in the range in between?
Yes. If the Put spread and the Call spread are done in the same month, it is called an Iron Condor. It’s a great trade that can boost your return, but trade carefully, and get out of one side quickly if the stock takes off.
I love the book, and I wondered if there was further training that expanded on what was in the book.
Yes. Absolutely. Look at the Courses page and you’ll find a recording of a SMIT Live! training session. Also, if you’d like Personal Coaching, that is available as well. Contact me if you are interested.
I noticed that your book is primarily about selling Put spreads underneath a stock betting that the stock will go up, or at least not go down much. Do you ever use Call spreads above the stock, betting that the stock will go down?
Yes, that’s a good strategy too, but I find that Call spreads need to be of a shorter duration and are a bit less likely to work out. If you see a stock falling, you can give it a try. But particularly in an uptrending market, I like Put spreads better.
Stock Market Insurance Trader focuses only on trading individual stocks. Do you ever use this strategy on ETFs?
Yes, absolutely. My favorite universe of ETFs is called the Sector Spiders. You can learn more about them at http://SectorSPDRS.com. Basically it divides the S&P500 stocks into 9 buckets and gives you an ETF on each of them. I like to find which part of the S&P500 is doing the best and open an Insurance Agent Trade on that fund.
Can you use the strategy from Stock Market Insurance Trader in a Roth IRA?
Yes. You can do Insurance Agent Trades in Roth or regular IRAs, as long as your broker allows it. Some do, some don’t. First, you’ll need a self-directed IRA, an account where you get to pick the investments. Second, you’ll need to be able to trade options. In order to trade option spreads, you need what is called Options Level 2. Not all brokers allow this for IRAs. But many do. Find one that will allow you to “trade Options Level 2 in self-directed IRA.” That’s the magic phrase.
What stock brokers do you recommend for trading Insurance Agent Trades?
I use Schwab and thinkorswim. I have also used TradeStation and OptionsXpress. All have their good points. Schwab does not allow spread trades in an IRA, so I have my IRA at thinkorswim. OptionsXpress and TradeStation do allow spread trades in IRAs. There are many other good brokerages that will work just fine. thinkorswim is my favorite.