September « 2007 « Investing Adventures

Saturday, September 15, 2007

Online Brokerage Review – OptionsXpress

Filed under: Brokerage Review, Financial Website, Investing Resources — Jorge @ 10:11 am

Here’s a review on an options-based discount brokerage, OptionsXpress. OptionsXpress prides itself on catering to the broad market including options, futures, and bonds to name a few.

Fees/Commissions: OptionsXpress has a tiered fee structure. Starting with their options schedule, their fee is broken into two groups: 35+ trades per quarter and 0-34 trades per quarter. Taking the 35+ trades per quarter, OptionsXpress charges a flat rate of $12.95 per trade for up to 10 contract trades. Every contract trade after is $1.25. If you trade 0-34 options per quarter, OptionsXpress will charge a flat $14.95 for up to 10 contract trades, and $1.50 thereafter

OptionsXpress’ stock fee schedule is also tiered. 9+ stock trades per quarter runs $9.95 per trade for 1,000 shares (per trade). For every share above 1,000 per trade, OptionsXpress charges $0.01. If trading less than 9 stock trades per quarter, the fee runs $14.95 per trade (up to 1,000 per trade) and $0.015 per share above the 1,000 limit per trade.

Other fees from OptionsXpress include no charge for broker assisted or limit order trades, $14.95 min / $1.50 per contract in a complex options trade (up to 4 legs), $29.90 minimum for a covered call trade, $14.95 plus any additional loads or fees for mutual funds, $5 / bond with a minimum of $14.95, $3.99 / futures contract plus exchange fees, as well as other fees for options assignment or exercise. Margin rates range from 6.5% to 8.75%.

Investments Offered: OptionsXpress offers stocks, options, futures, mutual funds, and bond trading. Some options are not available unless you meet their minimum requirements. Futures trading, for example, requires 3 years of trading experience plus a minimum account balance of $25,000.

Platform Features: Extremely organized and chock full of features. OptionsXpress offers up to date options chains, stock prices and free (yes, free) Level II quotes. The actual platform is fairly simple but the information that it contains is extremely valuable and useful. OptionsXpress also has various proprietary screens and research.

Security: OptionsXpress only has a login page. They do not use, at least from my experience, any sort of trading password found with competitors such as Tradeking or Zecco. OptionsXpress is also an SIPC member.

Ease of Use: OptionsXpress has a very easy to use trading platform. Everything is labeled accurately and easy to find. OptionsXpress also has convenient features including trading directly from their Level II platform.

Support: I have yet to use OptionsXpress’ support features so at this time I have no comments available.

Pros

Favorable fee structure for heavy options trading
Free Level II quotes
Easy to use platform
Very responsive trading platform

Cons

Expensive equities trading even with tiered fee structure
Lack of double layered security found with competitors

Summary: If you’re a heavy options trader or even a futures trader, OptionsXpress may be a good option for you. At $1.25 per contract ($12.95 minimum per trade), it appears to be one of the cheapest in the game if you achieve their active trader status (35+ contracts / quarter). Although I do not have access to their futures platform, the ability to trade around the clock makes it desirable for other futures traders. OptionsXpress also has an increasing number of mini contracts, or e-mini contracts as its called. Their search feature is extremely useful. The trading platform is well designed, easy to use, and extremely organized. Free Level II quotes is valuable beyond belief. I would like to see their equities fees brought down a bit but I wouldn’t use OptionsXpress for anything beyond options and futures trading. That being said, OptionsXpress caters to a smaller portion of the trading community, albeit very well.

Comments (7)

Thursday, September 13, 2007

When do you declare defeat?

Filed under: Miscellaneous — Jorge @ 5:42 am

Here’s a question for you all out there. When do you finally declare defeat on a stock and capitulate? I’m a current owner of Level 3 (LVLT). I do expect it to recover as the fundamentals haven’t changed. I plan on buying down until $4.00. Assuming nothing changes and your stock continues to dive for no reason, how long do you continue to fight and buy down or hold? After a certain amount of time and effort, do you just declare defeat and sell? I’m curious how others deal with perceived stinkers of a stock!

Comments (0)

Wednesday, September 12, 2007

It’s Time … For a Special Portfolio Progress!

Filed under: FOMC, Portfolio Progress — Jorge @ 4:30 am

I’ve turned a profit!

Total Deposits: $1,841.47
Current Portfolio Value: $1,919.00
Profit as of September 12, 2007: $77.53
Profit (Loss) as of September 9, 2007: -$28.42
Profit (Loss) as of September 3, 2007: -$126.14
Profit (Loss) as of August 26, 2007: -$130.76

So what turned my portfolio around? I purchased some EMC Oct 18 calls at $1.40 per call. If you remember, each contract would cost 1.40*100, or $140. I purchased two contracts at the $1.40 price and quickly sold it two days later at $2.00 a contract, leaving me with a profit of $0.60 per contract, or $120 for my total purchase (I only had two contracts open as a result of my small capital investment).

As of today, I’ve made a 4% return in the market. A 4% return in 3 months may not be grand, but it’s definitely a start. Quick recap of this week’s news so far:

Monday (9/10): FOMC Presidents around the country weighed in on possible rate cuts and how deep those cuts may or may not be next week during the FOMC meeting. Market ended flat for the day on a relatively quiet news day.
Tuesday (9/11): 6th year anniversary of the 9/11 attacks. Ben Bernanke spoke in Germany regarding the world economy. Not much was said in regards to the U.S. market and the potential for rate cuts. FOMC is now in a self-imposed silent period until their meeting next Tuesday. Market jumped 1-2% yesterday based on the possibility of a rate cut.

Comments (2)

Tuesday, September 11, 2007

Watching Grass Grow

Filed under: FOMC — Jorge @ 3:35 am

Felt more exciting than yesterday’s market action. Hopefully today will see some more lively action either in the positive or negative side of things. On a bright note (if you feel this way), William Poole has announced his retirement from the St. Louis Federal Reserve Board yesterday. Normally that would be something to cheer about. The problem comes from the fact that he’s been serving as St. Louis’ president for almost 10 years. The FOMC has a 10 year term limit and as such he’s forced to retire. His retirement is effective March 2008.

Comments (0)

Sunday, September 9, 2007

Portfolio Progress – September 9, 2007

Filed under: Equities, FOMC, Portfolio Progress — Jorge @ 12:19 pm

This past week was somewhat uninteresting until Friday. Here’s a quick recap:

Thursday (9/6): Apple (AAPL) released the new iTouch as well as slashing prices on their current iPods and iPhone. Apple’s stock sank 5 points on the news primarily as a result of the iPhone’s price cut. Investors felt the iPhone wasn’t living up to the hype and adjusted the stock’s price accordingly.
Friday (9/7): Apple (AAPL) released a statement dubbed the “iSorry” giving all iPhone buyers who purchased their handsets without rebates a $100 gift certificate for use on any Apple product. Apple’s stock sank another few points on the news that the $100 rebate would result in a loss of $100 million in sales. However, the $100 gift certificates would result in about 1 million Apple purchases. Apple’s stock may be prepared for a rebound next week so keep an eye out. The jobs report was released on Friday as well resulting in a 240+ point loss due to an unexpected loss in jobs across the country. The report gives the possibility of a FOMC rate cut happening next week. The question now becomes whether the rate cut will be a 25 or 50 basis point cut.

Current Portfolio Value: $1,613.05
Profit (Loss) as of September 9, 2007: -$28.42
Profit (Loss) as of September 3, 2007: -$126.14
Profit (Loss) as of August 26, 2007: -$130.76
Profit (Loss) as of August 23, 2007: -$117.15

This week went well. I had some XTO Sept 60 calls in place in the event natural gas would spike as a result of the hurricanes nearing the U.S. XTO’s price spiked just enough to cash those calls out before XTO’s price dropped in yesterday’s horrible action. My portfolio’s in place next week for a nice rebound, including a couple of calls on EMC. Should the calls pan out, I’ll expect my portfolio to go into the black by the end of the week. Let’s hope! Have a great week making money!

Comments (5)

« Newer Posts — Older Posts »