Automatic trading, also known as “auto trading,” is one of the strategies you can use to trade stocks or options without as much personal involvement. Below is some basic information about auto trading to help you decide whether this approach is right for you.
What is Automatic Trading?
Automatic trading is an approach to stock or options trading that allows your broker to carry out trades on your behalf. The broker’s trading activity is determined by a third-party newsletter provider’s recommendations. If the provider recommends selling a specific option, for example, the broker takes action without any prompting from you within the guidelines you previously set for your account.
Benefits of Auto Trading
Auto trading offers many potential benefits for investors. Some of these benefits include:
Less research and fewer headaches. – With auto trading, your third party newsletter provider will do all of the research and decision making for you.
Fewer missed opportunities. – Because trading takes place without your involvement, you are less likely to miss opportunities because you were otherwise engaged.
Ability to control certain aspects of transactions. – Even though you will be relying on your third-party provider to make your trading decisions, you will still be able to control certain aspects of the process, including the maximum amount per trade.
Lower rate of “emotional” decisions. – Because a third-party, neutral provider will be responsible for your trading decisions, you won’t be at risk of making hasty decisions based on your emotions at the time.
Opportunity for significant earnings. – With the right provider and circumstances, you will have the opportunity to earn significant profits through auto trading.
Keep in mind that, although auto trading offers a number of benefits, it can be risky as well. In order to use this strategy effectively, you need a reputable service and successful newsletter provider.
How Can I Invest Automatically?
Before you can start auto trading, you must first choose an auto trading service and a newsletter provider. Once you have signed up with the service of your choice and have a broker that provides auto trading services, you can begin making trades.
eOption does not advise, consult or assist any advisor with respect to the content, recommendations or strategies contained in any advisor or trade alert published by any advisor.
Options involve risk and are not suitable for all investors. Prior to trading options, you must be approved for options trading and read the Characteristics and Risks of Standardized Options. A copy may also be requested via email at email@example.com or via mail to eOption, 950 Milwaukee Ave., Ste. 102, Glenview, IL 60025. Online trading has inherent risks due to loss of online services or delays from system performance, risk parameters, market conditions, and erroneous or unavailable market data.