Setting up Your Trading Account

Transcription

1 NeUventure on Wall Street Setting up Your Trading Account 1. Go to your brokers website home page. 2. Mouse over Client Services, then click on Applications and Forms at the top of the home page. (Note: the following is a method for printing forms, filling them out, signing them, and faxing them in. If you would prefer to register online, you can click Open an Account on the right side of the home page, and you can register online. However, you will still need our example forms to complete the process correctly.) 3. Under Account Opening Forms and select Individual (Note: You can choose Joint if you want your spouse or business partner s name on the account also; you may choose Partnership, etc. for any type of entity you may be trading through; you may choose Custodian if you want your child to be able to trade with you, etc. Individual or Joint are the easiest ways to set up to start with.) 4. When the file comes up on your screen you will see a document called Account Opening Instructions. Click File Print and it will print all 8 documents at once. You will only need to fill in 4 of them: a. Account Opening Instructions b. Privacy Notice c. Account Application d. Customer Agreement e. Option Application (also, Option and Spread Trading by Retired Persons and Option and Spread Trading in a SDIRA if you are going to trade options and do spreads in your IRA) f. Margin/Short Account Agreement g. Margin Disclosure Statement h. Account Transfer Form

2 The ones in bold (c,d,e,f above) are the originals you will print, fill out and fax to Regal. Along with this document, entitled Setting Up Your Trading Account we have attached EXAMPLE forms for the four you need to fill out. Do not send in the example forms, but just refer to them as you fill out your printed originals. 5. Filling out the Forms Fill out all areas marked with words and/or with a star. Note: Where you see Account Number just leave it blank because they will not assign you a number until they receive these forms. They will fill in the number for you after they receive the forms. Page 1 Account Application (1.) Fill in top 2 sections as per example provided (2.) Income Estimate this (you don t have to spend hours adding up all your bank accounts, etc., a good, honest estimate is fine) based upon your combined income from you and your spouse s jobs, other income sources, etc. Make this as high as you can including every possible income source you have. (3.) Net Worth Add up everything you own that is of value, except the house you live in right now. This includes cash in bank accounts or savings accounts, CDs, retirement funds, cars, land, rental property you own, art work, furniture, equipment, everything you own that would create money if you sold it. You can estimate this number (i.e. don t take a lot of time to calculate it, just estimate it). (4.) Liquid Net Worth This will usually be a smaller number than the one in Net Worth. This includes the same type things, but only cash in bank accounts, savings accounts, CDs, etc, and other things that you own which you could sell and turn into cash quickly (i.e. within 30 days). This can also be estimated. (5.) Section 2 does not have to be filled in for an individual account. Page 2 (1.) Section 3 Take a look at the example form we provided. Section 3 includes investment objectives and risk tolerance choices. Read them carefully. Make sure you are comfortable with the risk level you choose. 2

3 (2.) Check the closest tax bracket to your actual (you can estimate it if you don t know it). Fill in the number of dependents that you claim on your IRS tax forms (i.e. total number of family members living at home); also marital status. (3.) Risk Tolerance For purely educational purposes, keep this in mind. If you do not select Speculative/Highest Risk then you will probably not be allowed to trade options (Seminar II skill sets) and/or spreads (Seminar III skill sets) later. Check the box you see checked on the example form at the top of section 3, IF you want to be able to trade options and spreads later, and IF YOU ARE COMFORTABLE WITH THE RISK LEVEL ASSOCIATED WITH THIS CHOICE. (4.) Investment Experience If you already have experience trading stocks or options, then fill in the maximum number of years experience. For example, if you have traded stocks in your mutual fund or retirement fund, you can put down stock trading for that many years. If you have experience trading calls and puts (options), or spreads, you can put down how many years options experience. If you have no experience, don t worry, just put zero, but be sure and list NeUventure on Wall Street Seminar I, II, and/or III and the date completed, depending upon which one(s) you have graduated from. A place for this information is found on page one of the Options Agreement under course/publication. Most brokers will count it as if you have experience because you have taken our courses (call us at if you have a problem with this). (5.) Payment Instructions Fill out as shown in example (6.) Money Market Sweeps This gives them permission to allow you to earn interest on money that you have in your account, but not invested at any given time. Check one of the two we marked these are the safest. (7.) Banking References Fill in as marked (need at least one). Fill in the rest as marked (8.) Source of Funds Fill in as appropriate. Certification of Taxpayer ID Number Fill in as on sample, or as appropriate (9.) Section 4 Sign and date at bottom 3

4 Customer Agreement Fill in top as shown. Joint Account Agreement Fill in as shown Option Application Fill in top, Investment Information, as marked. Make each answer correspond with the numbers you marked earlier on the Account Application (i.e. Number of Dependents, Income, Approximate Net Worth, Liquid net Worth should match the numbers on the previous form remember you can estimate these). Investment Experience Make this match the same things you placed on the Account Application. Notice that these are listed in a different order than on the Account Application Form, so be careful filling this out, but make it match. Option Experience You will be granted certain year s experience equivalencies by most brokerage companies based upon which NeUventure on Wall Street Seminars you have graduated from. After Seminar I, please refer to the example form which has AFTER SEM. I circled at the top. Fill in the Option Application portion according to this, unless you already have experience trading options. If you have experience you can list your experience, and ask for Level 2. Otherwise, you will be granted Level 1, which allows you to trade stocks but not options. After Seminar II, you need to re- do the option agreement. You only have to complete the ONE PAGE of the Option Application (go to the brokerage company s website and reprint the Option Application form you only need the first page). 4

5 Use our example form which has AFTER SEM II circled at the top. After you complete this and submit this to your broker (via fax) you will be granted Level 1 and Level 2 status (you can now buy puts and calls). After Seminar III, you will have to repeat this process and use our example form which has AFTER SEM III circled at the top. After you complete this and submit this to your broker (via fax), you will be granted Level 1, Level 2, and Level 3 status (you can now buy puts and calls, write covered calls, sell puts, and do spreads). Investment Objectives and Risk Tolerance Check each of these as on the example if you wish to trade options however, if you do not agree with the risk, then answer according to your conscience. But, for educational purposes we must inform you that in order to be allowed to do options trades, you must check Speculative/Highest Risk. Strategies and Objectives Fill out as in the example (Note the difference AFTER Seminar I, AFTER Seminar II, and AFTER Seminar III). Also, answer according to your own desire. Sign and Date Option and Spread Trading by Retired Person(s) Fill in as shown on the example (only if you are retired). If you are trading options in an IRA, please ALSO complete the next form Option Trading in a Custodial Account Fill in as shown on the example if you are trading for your child, and wish to trade options in the account 5

6 Margin/Short Account Agreement Fill in as shown on the example. Note: Even if you believe you will not use margin, you still need to fill this out so that when you are ready to do spreads you will be allowed to do so. Account Transfer Form I feel it is easier to skip this form. Just do the following: (1.) Fax in your other forms. (2.) The next day call to see if they have your account set up yet. (3.) Ask them for your account number. They will give you an account number and a password. (You can later change the password to whatever you like.) For now, however, write these down in a safe place and keep them with you at all times so that if you need to place a trade, or call your broker, you can give them the account number. (4.) Subscriber and Display Service Agreements Once you have completed the process and logged on for the first time, you will be asked to sign several agreements before you can get into your online account. These are called subscriber agreements and display service agreements. Basically they are there to cover the companies rear ends which supply all the services for you, and you cannot trade without signing these. Read them if you like. They all pretty much work the same way. For example the first is called: NASDAQ Subscriber Agreement After all the legal verbiage, you will have a place to verify that you are not a professional, licensed trader. You are not, so you check Yes I am a NON- professional... They will also ask you to fill in your address, profession, etc. (to prove you make a living doing something besides being a broker for example). If you are self employed, just put self employed in the box for profession. Several 6

7 of the other agreements also ask for your address, employment, etc., and you check the little boxes to cover their rear ends. Do you qualify as a non-professional user as defined in paragraph [1] of the agreement? Yes No Then there is the... AGREEMENT FOR MARKET DATA DISPLAY SERVICES You will be asked to mark a little box at the end of Section 1... End of Section 1 ACCEPTED AND AGREED: I, the "Subscriber" to which the preceding terms and conditions refer, acknowledge that I have read the preceding terms and conditions of this Section 1, that I understand them and that I hereby manifest my assent to, and my agreement to comply with, those terms and conditions by "clicking" on the following box:...and at the end of section 2... End of Section CERTIFICATION - By clicking on the following box, Subscriber hereby certifies that he or she falls within Paragraph 9's definition of "Nonprofessional Subscriber" and that the personal and employment information that he or she has included in Paragraph 11 is truthful and accurate. ACCEPTED AND AGREED: I, the "Subscriber" to which the preceding terms and conditions refer, acknowledge that I have read the preceding terms and conditions of this Section 2, that I understand them and that I hereby manifest my assent to, and my agreement to comply with, those terms and conditions by "clicking" on the following box: Then there is the... 7

8 AGREEMENT FOR MARKET DATA DISPLAY SERVICES (American Stock Exchange Non-Professional Subscriber Agreement) End Section 1 ACCEPTED AND AGREED: I, the "Subscriber" to which the preceding terms and conditions refer, acknowledge that I have read the preceding terms and conditions of this Section 1, that I understand them and that I hereby manifest my assent to, and my agreement to comply with, those terms and conditions by "clicking" on the following box: End of Section CERTIFICATION - By clicking on the following box, Subscriber hereby certifies that he or she falls within Paragraph 9's definition of "Nonprofessional Subscriber" and that the personal and employment information that he or she has included in Paragraph 11 is truthful and accurate. ACCEPTED AND AGREED: I, the "Subscriber" to which the preceding terms and conditions refer, acknowledge that I have read the preceding terms and conditions of this Section 2, that I understand them and that I hereby manifest my assent to, and my agreement to comply with, those terms and conditions by "clicking" on the following box: Then there is the... OPRA Quote Agreement OPTIONS PRICE REPORTING AUTHORITY ELECTRONIC FORM OF SUBSCRIBER AGREEMENT CME Subscriber Agreement TERMS AND CONDITIONS OF USE OF DOW JONES INDEXES SM 8

9 ...All these are very similar. Just fill in what they ask for, and always check the boxes as a non-professional. Once you complete the last one, it will open into your trading account, and you have access. (5.) Wire your money from your bank account, to Regal/Eoption. You can send $500, but $2,000 or more is better. After you have an Eoption Account Number assigned, you can have your bank wire money into your trading account. The wiring information for Eoption is as follows (you can find wiring info for any other brokerage company on their website)... ABA # Bank Name: J.P. Morgan Chase (270 Park Avenue, New York, NY 10172) Account Number: F/A: Penson Financial Services FFC: [Your full name] [Your Eoption Acct. Number] (FFC stands for for further credit to. You usually do not need the bank address.) Usually you need to walk into your bank the first time, and do this in person. Often you can fill out a form and sign it, allowing you to do this on the phone next time (you should request this). There is usually a small charge for wiring the money, so you have $25 or so extra in your bank account above and beyond the amount you wish to wire. The next day, call your broker. If you are using Eoption use and select 3 for customer service. Ask if the money is in your account yet, and if you are good to go. 9

10 Normally you leave your money in the trading account and let it keep growing. However, if you need to withdraw money, you can call customer services, give them your account number, and ask them to mail a check to you. For $20 or so, they will send it next day. (6). Checking and Visa Debit Cards If you wish to go to the trouble, you can get checking, and even a Visa debit card. Go to the eoption.com home page, or any brokerage home page, and mouse over Client Services, then click on Applications and Forms. Then click Cash Management Forms. The Priority Account Application is for checking. The Priority Plus is for checking and DR card. You could also print and send in an ACH form which allows you to call them and have money sent ACH to your bank account. You probably will not need checking at first, since you are primarily investing and re- investing and building your account. The ACH would be enough for occasional transfers of money to or from the account. Or, you can do without this, and just call and have them send you an occasional check. However, after you have built your account up to $75,000 of more, you might want the checking. If you need further help setting up your brokerage account, call us at , or e- mail Katie, at Katie@investingforcash.com. Sincerely, NeUventure on Wall Street Staff Revised 03/30/11 10

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