Find answers to your options trading queries with QuantumTrades FAQ. Clear, concise solutions to enhance your trading journey. Explore our FAQ section for a seamless and informed trading experience.
FAQ
Have a question? You’re covered.
Are you registered with the SEC?
We are enrolled in FINRA & we are SEC [securities exchange commission, USA] approved Registered Investment Advisor [RIA]Do you need to transfer money?
No, Money stays in customer’s brokerage accounts, you just have to link account in our platform.What are my risks?
Here are some of the risks of using wheel strategies:- Stock selection risk. The success of the wheel strategy depends on the underlying stock performing well over time. If the stock price falls, you could be assigned the stock at a loss.
- Market risk. The wheel strategy is not immune to market risk. If the overall market falls, your stock holdings could decline in value, even if the underlying stock is a good company.
- Liquidity risk. If the underlying stock is illiquid, you may have difficulty selling your shares or covered calls. This could limit your ability to generate income from the wheel strategy.
- Margin risk. If you are using margin to fund your wheel trades, you could be exposed to additional risk if the stock price falls.
- Choose high-quality stocks with strong fundamentals. This will help to reduce the risk of the stock price falling.
- When choosing stocks for options trading, it is best to select stocks that have weekly options. This will help you to benefit from time decay, which is the gradual decline in the value of an option as it approaches expiration.
- Use a margin account only if you are comfortable with the risk. If you are not comfortable with the risk of margin calls, you should use a cash account. Manage your risk carefully. Set stop-losses on your stock positions and covered calls to limit your losses.
Why options vs stocks. Options are risky ?
Options can be a more efficient way to generate income than stocks, especially when used in a covered call or cash secured put strategy. This is because options give you the right, but not the obligation, to sell an underlying asset. This means that you can collect premium from selling the option, even if the underlying asset price does not move in your favor.What brokerages are supported ?
As of now we support Interactive Broker & TDAmeritrade. Soon we will be launching Schwab & E-TradeSoon in few weeks, we will be able to release them with more features.
What happens when stock gets assigned at lower price ?
Wheel strategy is combination of cash secured puts & covered calls. When stock assigned it automatically does covered calls and when stock exercised, it writes cash secured puts. No additional effort manual effort needed. Zero minutes of attention required during market hours.Is this free?
First one months free[trail] & after trail period based on your subscription tier selection accordingly Base price & per contract price will be invoiced.Do we have to share passwords?
Not at all, customer login to QuantumTrades & add account by authorizing in TDAmeritrade official website & authorize QuantumTrades.
Incase of Interactive Broker, customer need to login Interactive Brokerage & link us as Registered Investment Advisor from Interactive brokerage profile setting. More details can be found in onboarding-guide.
What types of accounts are Supported by platform ?
We support all types of Accounts Regular, Joint, LLC, Corp, etc. except, 401k/HSA are not due to the nature [options are not supported] of the accountsCan QuantumTrades withdraw money from my brokerage Account ?
QuantumTrades can not withdraw from your brokerage account, but generates invoice based on subscription tier they select after trail period.
How are you different from Robinhood, TDAmeritrade ?
We are very different, we are not another brokerage. We are wrapper/brain which is automated & personalized built on top of your existing brokerage.Is this Tax free? Who generates me tax documents
We are brain/wrapper build, order execution is still done within brokerage. Hence 1099/ other tax documents are generated by TDAmeritrade/other brokerages.How are we different from other Robo trading providers like Fidelity, etc?
We are fundamentally similar to other players in our approach to investing. However, we offer you the freedom to select the stocks you love and customize your risk settings at the individual ticker level. We also focus on low-risk options strategies with regular gains based on the stocks you select. Other players directly invest in stocks, which could have higher risk and lower returnsWhat is the impact of TDAmeritrade Charles Schwab migration?
- We understand that you may be concerned about the recent changes to Schwab APIs. We want to assure you that we are taking this matter very seriously and are actively monitoring the situation.
- Schwab has confirmed that they will be keeping the APIs as is, with as few changes as possible.
- We will be migrating to the new APIs as soon as they are live. We will notify you in advance of the migration so that you can make any necessary preparations.
- We are also working in parallel with Schwab and E-Trade to support our customers and to reduce single point of failure.
Here are some of the risks of using wheel strategies:
- Stock selection risk. The success of the wheel strategy depends on the underlying stock performing well over time. If the stock price falls, you could be assigned the stock at a loss.
- Market risk. The wheel strategy is not immune to market risk. If the overall market falls, your stock holdings could decline in value, even if the underlying stock is a good company.
- Liquidity risk. If the underlying stock is illiquid, you may have difficulty selling your shares or covered calls. This could limit your ability to generate income from the wheel strategy.
- Margin risk. If you are using margin to fund your wheel trades, you could be exposed to additional risk if the stock price falls.
Overall, the wheel strategy is a relatively low-risk strategy, but it is not without risk. It is important to understand the risks involved before you start using this strategy.
Here are some tips to help you minimize the risks of using wheel strategies:
- Choose high-quality stocks with strong fundamentals. This will help to reduce the risk of the stock price falling.
- When choosing stocks for options trading, it is best to select stocks that have weekly options. This will help you to benefit from time decay, which is the gradual decline in the value of an option as it approaches expiration.
- Use a margin account only if you are comfortable with the risk. If you are not comfortable with the risk of margin calls, you should use a cash account. Manage your risk carefully. Set stop-losses on your stock positions and covered calls to limit your losses.
Be patient. The wheel strategy is a long-term strategy, so don’t expect to get rich quick. Name of game is consistency & receiving regular premium
Options can be a more efficient way to generate income than stocks, especially when used in a covered call or cash secured put strategy. This is because options give you the right, but not the obligation, to sell an underlying asset. This means that you can collect premium from selling the option, even if the underlying asset price does not move in your favor.
We understand that you may be concerned about the recent changes to Schwab APIs. We want to assure you that we are taking this matter very seriously and are actively monitoring the situation.
Schwab has confirmed that they will be keeping the APIs as is, with as few changes as possible. This means that you will not experience any major disruptions to your trading activities.
We will be migrating to the new APIs as soon as they are live. We will notify you in advance of the migration so that you can make any necessary preparations.
We are also working in parallel with Interactive Brokers and E-Trade to support our customers and to reduce single point of failure.
As of now we support Interactive Broker & TDAmeritrade. Soon we will be launching Schwab & E-TradeSoon in few weeks, we will be able to release them with more features.