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Hi Mark, I am Howe from Singapore. As I am very new to trading not to mention Options Trading, Its important for to learn as much as possible.
To let you have a better understanding of my limited knowledge, please let me describe what are things I know.
I have took a trading course around Feb 11. Basically, I have learn technical analysis using candlesticks patterns/breakout patterns, fibonacci retracements, VIX, Tick and Trin to determine which direction the underlying will move. I will also use related sector index to see if there is an similar patterns.
Then I will decide what would be my target profit and stop loss before I enter a trade if there is any good indication. So far I have been scalping on paper trading using USD$3500 capital for about close 2 months, profiting about USD$2000.
My area of interests would be:
1. Learning and applying non directional options strategies like eg. Put/Call spreads, Iron Condor and Butterfly. Most people knows how to enter a trade with these strategies, however they have problems exiting the trades if something goes very wrong or how to profit from these strategies before the contracts expires. I am one of them. The other thing is I do not know when to apply these strategies effectively, like eg. when the underlying is consolidating, should I use Iron Condor, Butterfly, Spreads or etc. The reason why I would like to know is I can enter a trade with minimum risk.
2. Learn other methods of trading eg. Swing Trading. Currently, I am scalping counters like JPM, MS, BAC and GS purely based on support and resistance. I would like to learn more methods so as I can be more versatile in my trades.
Sorry for this lengthy post. Hope you can advise me on which membership I need to sign up in order to be able to learn these topics. Many thanks.
Hello Howe,
You raise many points in your note, and I will address each of them.
First, I want to thank you for including your background information. That is very important information and allows me to provide an answer that is suitable to you.
1) You have not ‘learned’ technical analysis. That is a difficult skill to develop and takes far more than one course. I know that when I say that – you are torn between believing me and believing the person who taught the course.
You learned the basics. You learned what to look for in the charts. However, that is all at a very basic, elementary level. I assume you understand that if using these charts were that easy, then no one would ever lose any money when trading. The charts are merely the beginning and it will take a lot of time for you to be able to make good use of them. I am not telling you that the education was worthless – only that it is insufficient.
By all means, use what you learned. But don’t count on it as if it is ‘THE TRUTH.’ Learning to read the charts is going to take time and experience.
2) You may believe that you can determine in which direction the underlying will move, but believe me you have not. Ask your instructor – “how good are these charts? How often can I expect my prediction – based on my chart readings – to be accurate? Should I make large bets based on these charts?”
At this stage of the game, I would expect your accuracy percentage to be about 50%. In other words – no better than random. However, I am not a chart expert, I do not use them, and you may decide to ignore this warning about their ability to predict direction >in the hands of a novice chart reader.
3) I am glad that your methods have been making money when scalping. It may turn out that your talents are best used to trade stocks. One word of warning: Options are not stocks (as I am sure you already know) and must be traded differently.
4) I can help you with the concept of managing those non-directional positions. How to size the trade properly; how to estimate when risk is approaching an uncomfortable level – other than by using the amount of money lost as the ONLY decision-making factor. Yes, it’s important to control risk. Sometimes we adjust – or make a change to the position, rather than exit. I can help you understand when one is preferable to the other.
I cover such topics as taking profits and exiting. In short, I can give a thorough course on trading iron condors, credit spreads, and to a lesser extent,buttterflies (which are really the same as iron condors – except that the option sold has the same strike price in the butterfly and different strike prices in condors).
5) The problem with this is that this material is best learned via the courses and I am way behind in making them available.
I can send to you written information (book and specific blog posts) – and then reply to your questions. If that is okay with you, then you can join as a Gold Member. [Bronze Membership doesn't provide any quality premium information].
I will give occasional talks – but the topic cannot always be one that is best-suited to you, unless others also want to hear about iron condors etc.
I know there is a big time difference, but if you can attend the live meetings – held at least four times per month, you can ask questions and learn other stuff about trading options that is not specific to your request. But it is information that will help you to develop needed skills.
6) I will have a course on iron condors (Additional but reasonable, cost. At $37 per month, I cannot offer those courses). However, I do not know when. these take far longer to produce than I had imagined.
7) I cannot teach you anything about traditional ‘trading skills’ used by scalpers or swing traders. It is my strong belief that options are not the best vehicles for those traders.
The best thing about options is that they were designed as risk-reducing instruments. They are not designed as tools for the quick in and out trader. Options allow a trader to measure and manage risk. Think of it. There is nothing else that allows a quick, reasonable accurate estimate of risk. And not just market movement. There are also other risks such as time decay of option positions, risk of incurring more (or less) volatility in the market place. Plus other risk factors. With options, you can reduce or eliminate any specific risk factor. That makes them unique in the investment world, and it is not a good idea to waste all of that to scalp. . You can do that just as you have been doing with other vehicles. there is no need for options.
Options are different ad offer many benefits – and risk management is at the top of the list.
I can er what you need in the options area. I wish I had more courses for you. However, it’s only 437 per month – and you can have a full refund of the first month’s fee if you decide this is not for you. Just request that refund via e-mail within 30 days:
premium (at) mdwoptions (dot) com
Hi Mark,
I have questions regarding using SPX versus SPY as well as determining the limit/credit price to input and choosing appropriate strike prices with consideration for volume/open interest when initiating a condor trade in the ‘track that trade’ you have considered.
I receive your earlier email response about the easy adjustment with 20 lots for SPY versus 2 lots for SPX. I suppose 20 lots is easier to adjust because you might be just adjusting part of the position and possibly even multiple times, provided commissions are not a major issue. This also means for easier adjustment, more lots might be better when one initiates the trade provided one has the relevant capital when using the more expensive SPX in reality (SPX being more worthwhile in terms of commission charges). I wonder if I am correct.
I have difficulty with trying to determine the limit/credit price to put in. (Kindly see bid ask values for SPX below) I am thinking it will not be advisable to use (2.50-2.10) for the put spread and (8.00-8.20) for the call spread especially when the call spread is negative in value. Should I start with the mid of each bid-ask spread to do the calculation? Or is the last done price a good starting point? Lastly, if the volume is thin, is it still advisable to continue with a particular strike price? How important are open interest/volume in determining the strike prices to use and is there an advisable minimum value for them? Hope you may be able to advise with some basic calculations.
Thank you.
Last Bid Ask Vol
1. 1240 1.64 1.25 2.10 62
2. 1250 2.60 2.50 2.90 1277
3. 1410 8.60 8.00 9.10 7682
4. 1420 7.45 6.30 8.20 39
Lim W.Y
Hi Mark,
What platform do you use? I have been paper trading on TOS and wondered what do you use to train your members.
Thanks,
Jason
Jason,
I have been using Interactive Brokers for paper-trading. I don’t like it, but use it because I’m familiar with the platform. In fact, I have not yet found a paper-trading account that’s any good for my purposes.
TOS is the most realistic, but they give fills that are too optimistic. The danger there is making customers too overconfident.
Regards.
Hi Mark,
I am a reasonably seasoned iron condor trader but still working to perfect my knowledge. I have questions like what adjustments would I make with 30 days left vs 12, should I go further out for iron condor in low IV environment, should I trade SPY or SPX. Consequently I was excited to see your Gold Membership. My concern is my ability to partake in the live sessions, which seem like the one of the most valuable aspects of membership. If I am unable to participate in the live sessions, do you feel your program would be beneficial for me? And if so what resources would be available to me?
Thanks
Mark
Hi Mark,
Aren’t we all? Perfection is quite a target!
First, the sessions are available on video. But that is not the same as being there with the ability to get involved in the conversation (headset is necessary to participate verbally. But most prefer to communicate via keyboard. Microphones don’t work as well).
I’ll respond via e-mail.
Regards
Are your videos archived? How do I access them?
Jackie,
Yes they are.
Blog post, explaining where everything is.
http://www.mdwoptions.com/Premium/map-to-premium-content/
Please let me know if this works. for you
Mark,
I’m interested in becoming a gold member on your site. My hesitation is that most of the site is not functioning very well. I first entered as a bronze member and was unable to view most of the free bronze member material. Despite a negative experience with the site I am impressed with your “job description” and thoughts about option trading.
I attempted to join as a gold member, but when I hit the final submit button, I got an error page.
The site needs some bugs worked out of it. I look forward to that time so I can join.
-kevin
Kevin,
I’ve been making changes almost every day this past week. Trying to make navigation simple.
If there is any specific change that you [or anyone else] would like to see – to make navigation easier, please let me know.
Truth: The information is all here. I thought it was easy to navigate. Apparently I was incorrect.
Thanks for the comment.
MArk
Mark,
We are trading the underlying for liquidity providing that pays rebates. We want to consult with you to use options for hedging when market makes moves because even moderate moves build up with significant inventory of underlying.
The straightforward idea for hedging is to buy ATM calls and sell underlying for delta neutral hedge. We can handle automated continuous adjustments to the underlying.
However, outright buying of ATM calls creates huge vega risk. We want to discuss specifics with you to see what you suggest to reduce vega. Our thoughts are to use short ratio butterfly so that it neutralizes vega but leaves delta to hedge our underlying position. But perhaps you have some better advice.
I will be happy to sign up for your Gold membership but can’t find the link to pay or register.
Also, please consider a 1 on 1 consultation for 30 to 60 minutes of your time?
Sincerely,
Wayne
Wayne,
I replied to your separate e-mail message. I feel out of my depth when dealing with forex products. I have never traded them.
Hi Mark:
I was very interested in attending yesterday’s Tradeking webinar: Iron Condor and Volatile Markets, unfortunately I had a scheduling conflict.
It it possible to outline the approach you spoke about in the webinar? Is it possible to get a copy of the presentation?
Thank you very much for your assistance.
Bill
P.S. I’m very familiar with the basics of the iron condor.
Hi Mark:
Got your email reply and looking forward to when TK releases the webinar.
Thanks for your prompt reply.
Bill
Hi Mark,
I am trading a 10 contract iron condor on the spy etf rather than 1 contract on spx index. I find this is working quite well as I can adjust easily without risking too much of my account. I have been also simulating many adjustments on this live trade. This method has helped me follow your excellent lessons and visualize on a real trade with many simulated adjustments. When and if I adjust for real I believe I will have a good feel for making a favorable adjustment.
Thanks,
Jim Elmore
Katmandu,
There is NO DOUBT that it is far easier to adjust a 10-lot SPY position than a one-lot SPX position. That makes it worth the extra commission cost.
The truth is that I can guide you with suggestions for adjusting, and offer ideas that make it easier for you to consider alternatives, but the bottom line is that you will learn what works for you by experience. If you want to discuss a specific situation that you face (or faced), feel free to do so.
Good trading
Hi Mark,
I was wondering if it is possible to send you an attachment. I took a screen shot of my trade and it might make it easier to discuss as I take it to completion. The file would be a .png picture file.
you could answer this by email if convenient. I was not sure if this was the proper forum to discuss this topic.
Thanks,
Jim Elmore
Kat,
Sure send it to premium (at) mdwoptions (dot) com
If you want to discuss the trade in the forum, you an attach the image to the forum entry.
Regards
I look at a blog every day that comes out about 1 hour before the market opens. They report the market direction and whether the movement is “sharp” – as in sharply up, or the opposite if applicable. They refer to pre-market activity. Just who is privy to this info? Obviously, they are, because they are always right. Perhaps you could address this in today’s class.
Regards, Vern
Done.
See video for live meeting dated 120117