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Washington, DC 2021
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Kevin
2:35
Can you ask her how a non-day trader should do princess trades?  definitely she is watching the gambler's count, but what about time of day?  I can rarely sit and watch the 1 day BTM chart.
Mentor Mike
2:24
It would vary, but if you're a member of the MMP she posts her trade journals at the end of each week
William
2:23
Question for Maggie – how many different trades does she have on at any one time? Thanks
Mentor Mike
2:23
Yes those can typically be quicker in and out... maybe only a day or two.  So your timing and management on a Princess trade needs to be focused
Kevin
2:22
I tried to send this earlier, but it didn't seem to go - sorry if it's repeated.  I have tried princess trades, but do you think Maggie would say they are only for someone with more of a day-trading style?  Does she have certain times of the day to watch and see the line in the sand breached?  could alerts be used?  I've never used alerts.
Mentor Mike
2:22
Yes you'll adjust the protection higher, similar to the Money Press
Beau C
2:22
Mike, Not to circle back, but regarding the MIT. If the stock is to run up will you adjust the protective put up also, or will you accept the extra margin?
Mentor Mike
1:58
The hotel always uses a "3rd Party" for their internet service... it was a PAIN for the hotel to get through to them and sort out the issue, but they finally got it figured out for us!  Sigh.
Matt Thomas
1:57
Mike, much better network today.  Whatever you did, write that down for the future!  :) thanks
Mentor Mike
But most call it "the portfolio margin trade"  ;-)
1:52
We call it our Master Income Trade... or MIT.
John
1:51
Most of Preston's strategies have names like Money Press or Crowbar.  Does the strategy using covered calls with portfolio margin have a name?
Clyde
12:46
Nice presentation Preston...
Mentor Mike
12:33
Breaking for lunch until 1:45 PM Eastern Time!
12:32
You can also use some of the same criteria as we use to find a Money Press
12:30
We look for stocks with weekly options, that have a decent trend, that we don't mind owning for awhile.  And a dividend payer is a nice cherry on top
Jeff N
12:30
Do you have specific metrics around the PM account strat ... and how to specifically build these positions? Thanks
Mentor Mike
12:29
1,000 shares of MSFT would cost around $295,000
Matt P
12:29
Mike, am I missing something or don't both these trades use less than $100K, so you could do them in a $100K retirement account (assuming we buy the puts first when we put this trade on? What am I missing?
Mentor Mike
12:29
Yes absolutely
Adam
12:29
So average option approval that your brokerage typically gives you is not the same as portfolio margin approval.  Total separate approval
Mentor Mike
12:25
No that is different.  Portfolio Margin requires a process to get approval and sometimes they'll have you take a test, submit an application, etc.
Guest
12:25
is equity margin the same as portfolio margin?
Mentor Mike
12:25
Yes approximately.  You can usually get your cash to about 10x at the max leverage.  WE RECOMMEND starting SLOW and working up as you get more comfortable.  Please ease into it.
Adam
12:24
so w a hundred k account like this w bluechip stocks you could do a million of stock?  W about 10K of exposure per stock?
Mentor Mike
12:18
You have to pay the full price for the put protection.  Then the difference between your cost basis on the stock and the put protection is the other cost/cash out.  So total those two amounts to see the total cash outlay you'd need if your account has portfolio margin enabled
William
12:17
Mike – for the portfolio margin example on JPM, how do you calculate the Cash Out part of the equation? Thanks
Mentor Mike
12:16
You could place it all in one order on most brokers, but otherwise you can buy the puts, then buy the stock, then sell the calls last if you need to break it all up... that would be the order to do it in
Guest
12:16
Mike in what order are the legs placed?  Buy the stock, Buy the put, sell the weekly call.  One leg at at time?
Mentor Mike
12:15
You have to go through your 100k first, then anything beyond that 100k is where they will start charging you margin interest.  So it just depends on how much you have going on in your account
Rich
12:15
How big is the margin loan in this example?
Mentor Mike
12:14
If you've got a nice gain on the stock and you've been in the trade for close to a year, you may want to try to avoid getting called out.  If you're trying to get some of the gains into the capital gains bracket, but usually we aren't in something that long
J McCathern
12:13
In looking at Portfolio Margin, is it better to buy back the calls and sell the following week or let the stock get called away then go back and sell naked puts? I am assuming this would have some tax/capital gains issues..
Mentor Mike
12:13
Yes... or you can do it all on one order form too.
John
12:13
Do you buy put first, then stock….
Mentor Mike
12:13
That is the total cost to put the trade on, if you have portfolio margin enabled
William
12:13
Mike – what is the $18k that Preston is referring to on the JPM example
Mentor Mike
11:43
Unfortunately you can't.  With any IRA account you can't use margin/leverage.  Even basic margin (2:1 to buy stock) you can't use in an IRA
Matt P
11:42
Mike, can you do portfolio margin with a retirement account?
Kevin
11:42
yes.  it's great, and I appreciate both the review and the new items.  thanks for explanations on the chat.
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