Welcome to Michael Carr’s Peak Velocity Trader … an exclusive options-trading service dedicated to pinpointing massive moves in momentum.
After spending 10 years perfecting this system in his own account, he was able to develop a four-line code that selects stocks at the exact moment they are ready to take off — or, as he calls it, stocks that are hitting their “peak velocity.”
Every month, this system will pick about three to four of the top momentum trades for you to profit from.
In fact, this system has the potential to make a million dollars for you in 18 months. … even if you never traded a day in your life.
To help you get started right away, take a moment to read through the frequently asked questions below.
Have a question that isn’t listed here?
Simply fill out the contact form at our Customer Service Center here, and one of our representatives will get back to you as soon as possible.
Your Member’s-Only Benefits
Q: What does Banyan Hill membership include?
A: Here’s what you can expect to receive as an exclusive member:
- Peak Velocity Trader Trade Alerts — Every time the system signals the start of new momentum trend, Michael will send you an email alert giving you everything you need to take advantage of the opportunity. You’ll know why the trade was triggered. You’ll know how long it’s expected to last. You’ll know the specific option trade you should use to capture as much profit as possible. And you will get an alert to close a trade the moment the system indicates a trend has likely reached its peak.
- Sovereign Investor Daily and Winning Investor Daily — Six days a week, you’ll receive our very best investment strategies (and picks), market forecasts, asset protection plans and personal liberty ideas from our two daily publications. Twice a day, the experts we trust most will bring you actionable solutions to enrich your personal and financial life.
Subscription and Account Information
Q: I just joined. As a new member, when will I receive a password for the member’s-only sections?
A: Once you have subscribed, you will be emailed temporary login information, followed shortly thereafter by your permanent username and password. Be sure to store this information in a safe place, as you will need it to unlock the many benefits your membership has to offer.
Q: I am already a member and have the correct password, but am having trouble logging into the members-only sections. What should I do?
A: Have you entered your username and password exactly as you received them, including case-sensitive characters? Also, make sure cookies are enabled on your browser. If you’ve tried the above and you’re still unable to log in, please click here to access our login helper. And don’t hesitate to contact our customer service team for assistance. Our representatives are standing by and ready to assist you.
Q: Who do I contact with any further questions?
A: For help or information, you can fill out a contact form or call 866-584-4096. Our regular business hours are 9 a.m. to 8 p.m. ET, Monday through Friday.
Q: How do I sign up for the text alert service?
A: Click here to sign up for our complimentary Peak Velocity Trader text-alert service. When you sign up, you’ll start receiving a text message on your cellphone each time we send out a trade alert. There is no cost to register.
- Simply enter your name, zip code, email and phone number. Then respond to the text message you receive so we can confirm your registration.
(Answered by Michael)
Q: Do I have to trade options?
A: If you wish to maximize your gains so you can rake in a consistent series of triple-digit winners, then yes, you have to trade options. Options provide incredible leverage. For many of the trades in the Peak Velocity Trader service, we are looking for only a small move in the underlying stock — between 5% and 15% — but that small move translates into gains of 90%, 100% and even 200% when we use options.
What’s more, options allow you to devote a smaller portion of your overall portfolio to a position. If you wanted to buy 100 shares of Apple, it would cost you upward of $10,000. On the other hand, one call option contract with three months of time at roughly the same price level as the stock would cost you less than $1,000.
In other words, the option contract gives you control of 100 shares of Apple and allows you to participate in the movement of the stock. But you’re now risking only a fraction of your portfolio on one position. You can now better protect and diversify your investments than if you’d devoted $10,000 to one stock.
Q: Do I have to open an options account?
A: Yes, but it’s not difficult. If you already have a brokerage account, you might need to request authorization to trade options. However, the process is very simple and often takes less than five minutes to complete. Check with your brokerage firm to see if they will allow you to upgrade your account online.
If you are opening a new trading account, you need only to check a box to indicate that you want options trading authorization. Either way, you will need to complete a simple one- to two-page form that will inquire about your goals, trading strategies and trading experience. For Peak Velocity Trader, the only trading strategy you will be using is the purchase of calls and puts.
If you have any trouble getting approval for an options trading account, speak to your broker and inform them that you are aware of the risks involved with purchasing options.
Q: What level of an account do I need?
A: You will typically need “Level 2” options trading approval (levels can vary depending on what brokerage you’re using), which allows you to purchase calls and puts. It’s one of the safest strategies because your risk is limited only to the money spent purchasing the option. You’ll never be required to add more money to the account should a position move against you.
Q: Which brokerage firm should I use to trade options?
A: We encourage you not to use a full-service brokerage firm because you’ll pay significantly higher fees to get in and out of trades. Overall, most brokers charge a set fee for each options trade (usually around $5 to $9) and then a variable fee per contract (about $0.50 to $2 per contract).
Below, we have listed 10 of the top-rated options-trading brokers as well as some of their commission fees. Keep in mind that many of these fees may be slightly higher or lower based on your trading frequency.
Q: Why do you have “limit” orders?
A: Limit orders are a way of setting the maximum price you are willing to pay. If the option is infrequently traded, it will often have a “wide spread” (the distance in price between what someone will pay to purchase the option versus what someone is willing to sell the option for). As a result, you risk overpaying.
With that in mind, I have carefully calculated the maximum range you should pay for an option, compared to how far I expect the stock to move. Remember, my goal is to hit a triple-digit gain on the position. By setting a limit order range, we ensure you pay a fair price for the option without undercutting your ability to hit that triple-digit win.
If the option’s market price is above the recommended limit price range, you should not purchase the option. Otherwise you’re “chasing the trade,” and that’s something we don’t want you to do.
Let’s look at a quick example:
Say we decide to trade a December $80 call option at the recommended limit order of $3.50 (which is at the end of our range). To get a 100% gain, the underlying stock would need to rally 8.8% to $87 ($3.50 x 2 + 80) so that the call will be worth $7.
Now, what if you chase the trade and pay $4.50 to buy the options instead? You need the stock to rally to $89 ($4.50 x 2 + 80) for the option to reach a value of $9, for a 100% gain on the position. In other words, the stock has to rally 11.3% for you to get a triple-digit gain.
Set the limit order — and remember, even using the limit price at the end of our range gives you a great value. If it comes back down to our price, great. If not, we move on to the next trade. And don’t worry; you’ll have plenty more opportunities to make big gains.
If you haven’t seen it yet, I created a great video that walks you through placing an options trade with a broker. Click here to watch the video, How to Trade Options.
Q: How much should I buy in each trade?
A: First, it’s critical that you do not have your entire trading portfolio dedicated to options. You must stay diversified so you are not only protected against unexpected market volatility, but also so you’re well-positioned to profit from any significant moves higher. You should still have your staple investments while dedicating a small portion of your total portfolio to options trading.
Second, you need to plan accordingly when trading the Peak Velocity Trader service. We have an average of four to five positions open at any given time. However, there will be times when we can have as many as 10 trades open at once or as few as two or three positions open. If you are allocating $10,000 to this service, you might consider devoting $1,000 per trade.
This will help build your confidence and experience. And it is always best to do some of your own research, even if you are using a service like this one, because the risk/reward for a certain position might not be at your tolerance level. Either way, we’ll help get you going in the right direction.
Ultimately, the decision is up to you.
We recommend buying an equal dollar amount for each trade. But you should only trade the number of contracts you feel comfortable with.
I suggest purchasing at least two contracts for each trade, because I frequently suggest selling half the position to lock in profits, while letting the other half “ride” for bigger gains down the road. But if you can only trade one contract, no worries. Just sell that contract when we recommend selling the first half of your position.
Whatever strategy you apply, stick to it religiously. You never know when a loser will come along, and if you’ve put too much of your profits into the wrong trade, you could erode your returns.
In the end, it’s up to what you feel comfortable with. For the purposes of our portfolio, though, we value each holding as being equally weighted.
Q: Do you use stop-loss orders?
A: Stop-losses are a great way to limit losses with stocks, but options are a different matter.
We don’t use stop-losses often for one reason: Options are incredibly volatile. They can make quick, violent swings based on temporary or even irrelevant news. So an option’s stop-loss can be triggered even if the underlying stock is performing the way we want it to. That means we could be stopped out of a great trade that would eventually bring us profits if we had waited just a little longer.
Mainly, I will only send you a stop-loss recommendation when an event threatens to capsize a seasonal trend just to make sure you are preserving capital.
Naturally, if you wish to set stop-losses on positions to match your trading tolerance level, that is certainly your prerogative. But as a strategy, it is not something we do when we initiate a position.
We do, however, have internal profit-managing measures. It’s called our “defense system,” which you can read about here.
These include exiting a position after it has closed for more than a 40% loss, exiting if it’s closed 40% below its high while we’ve held the option — and more. These are not orders you have to make on your own. I will monitor the positions and alert you whenever one of our sell signals has triggered.
Q: Do you use trailing stop orders?
A: Not all brokers allow you to place a trailing stop. More importantly, a trailing stop is calculated using the highest price of your asset while you’re holding it — meaning the trailing stop follows the movement of the option. If the price rises, so does the trailing stop. Since options can swing widely day-to-day, we could get thrown out of a position before we want to. So we don’t hold one with a broker.
Q: What risk tolerance is needed for Peak Velocity Trader?
A: Peak Velocity Trader is for risk-tolerant investors who are able to stomach losing 100% on some trades. We don’t frequently lose that. But if a position is a quick loser, it could become a 100% loser and expire worthless.
The 100% losers are part of the game when it comes to options. But our strategy has shown time and again that we can easily absorb those when we’re cranking out such large gains elsewhere over and over again. Plus, our profit-managing measures save us from most big declines.
I just mention this because I want you to be aware of the possibility of an option expiring worthless.
Q: What is the average holding period?
A: In general, a specific trade will last less than two months. Some options will move quickly, maybe because of a certain earnings report that has a history of moving shares. In those situations, you’ll book profits fast, sometimes within weeks or even days. In other cases, we may roll over positions and sell one option in a stock to buy a new one with a later expiration.
Shorter-term options cost less and it is usually less expensive to buy three one-month options rather than one three-month option.
Q: Should I reinvest my gains?
A: In general, we think it’s best if you do not reinvest your gains. With options, there is always the risk that the underlying stock moves sharply against you in a single day and your position suffers a 100% loss. However, as you develop confidence in the service and with trading options in general, you might consider reinvesting a small portion of your overall gains.
Q: There was no volume on one of your recommendations until after the alert went out. If all of that volume is from Peak Velocity Trader subscribers, isn’t that problematic?
A: No, because of changes in market structure driven by high-frequency trading, volume on an option no longer matters as much. All contracts in liquid stocks will trade in line with their fair value under the put-call parity formula and the liquidity of the stock now determines whether or not an option is tradable. I always pick options that are tradeable for us.
Q: Can you send trade recommendations after the market closes or before the market opens?
A: We don’t generally put out recommendations before the market opens or after it closes. Options are way too volatile for that. And the overnight spreads — the difference between bid and ask price — can be enormously wide, giving us a horrible indication of the market.
If we put out a recommendation overnight, news could occur after hours or before the market opens that radically shifts the value of the options up or down, and then we may have investors putting in wrong orders and potentially getting filled at bad prices.
So we don’t typically price options before or after market hours.
We do have a text-alert service — it’s free — that lets you know when a new recommendation has been sent. If you haven’t signed up for that, I encourage you to do so. You will know instantly when our alerts are released. Once you’ve clicked “submit,” just remember to check your phone for the final step. We immediately text you directions to get your confirmation.
Q: If my order doesn’t get filled, what do I do? Will you send an update on the trade?
A: For our official position to get filled and placed into the portfolio, the option price has to be within our buy range from the time the email leaves our office until the time we decide to cancel our orders.
If the price is in our buy range, even for a little while, then at least some of you are able to get in, and that’s when we have to start tracking the position officially. We try to set the buy limit slightly above the most recent high price for the particular contract. That way, we expect more investors to have an opportunity to get into the position.
So, let’s look at this in practical terms. We have option XYZ trading at a bid/ask spread of $2.70 by $2.90.
So we recommend paying up to $3 per contract in a dispatch that goes out at 11:30 a.m. Our team begins watching that contract at 11:30 to see how it’s trading, paying particular attention to trading volume. We can see as trades are filled and at what prices they’re filled.
In this particular example, if we see hundreds or thousands of contracts filled between $2.70 and $3, we know our readers are getting in. But then the position closes that day at $3.10. Our official price is $3 — even though we know trades were happening well below that price, and we start tracking it from there.
Unfortunately, there may be times when some people don’t get in at the recommended price for any number of reasons.
So, we’ll include a small update on a new trade in the following dispatch. We’ll let you know if we did or did not get in. If we got in, but you were unable to because the price moved before you could get filled, we’ll let you know if you should hold onto your limit order for a while longer.
Q: For a new member, do you still recommend entering recent open positions?
A: There are two factors to consider in this question:
- When was the buy date? Generally, if it’s been over a week since the buy date, then we recommend sitting this one out.
- How far away is the option price from the recommended buy price? If the option is in the red, meaning we have a paper loss, there could be an opportunity — but that opportunity would be at a lower strike-price, since that would give you a greater chance to profit. Conversely, if the option’s price is well above the recommended price, then there’s probably no reason to buy the option because the price will be more expensive and your returns will be limited.
Q: What if I have other questions?
A: If you have a question that wasn’t answered, be sure to check out the Trading Manual or the Options Trading Tutorial videos that can be found here. In addition, we have a team of well-trained, highly knowledgeable customer service representatives ready to answer your questions about the service and your subscription.
You can send us an email by clicking here, or call us toll-free at 866-584-4096 during the business hours of 9 a.m. to 8 p.m. Eastern Time.