<p>Complete beginner question: Do you all use an online service like etrade to buy stocks?</p>
<p>Mathilda - here’s a good link with comparisons of different brokerages:
<a href=“http://online-stock-trading-review.toptenreviews.com/”>http://online-stock-trading-review.toptenreviews.com/</a></p>
<p>I have accounts at Scottrade and TD Ameritrade.</p>
<p>I think the best type of account depends on your individual needs – as a complete beginner, I think you might value features like customer service or ease-of-use over the commission rate for trades. It also depends on what sort of trades or investing you want to do. </p>
<p>I probably wouldn’t open an account at TD Ameritrade today because it’s base commission is among the highest, but at the time I opened my account things were different. Plus its not just commissions, there are sometimes fees for other services that change the picture. For example, Scottrade is $7 per trade, but charges 1.25 per contract for options – TD Ameritrade is 9.99 per trade and 0.75 per option, so someone trading a lot of options would come out ahead at TD Ameritrade. TD Ameritrade also offers a good variety of commission-free ETF’s, so I might be able to get a free trade there that I would have to pay a commission for at Scottrade.</p>
<p>I originally opened an account at Scottrade because I was moving my SEP-IRA from Merrill Lynch and putting most of my money in mutual funds, and Scottrade offered a huge array of commission-free mutual funds… but I don’t buy mutual funds any more. Now I prefer ETFs, because they are essentially the same, but trade like stocks so it is easier and faster to get in and out of them. </p>
<p>I don’t trade at high enough value for it to make a huge difference to me in the end for the commissions-- if I was a very active trader I’d might be looking at TradeKing or OptionsHouse – but then there are other factors to think about as well-- such as how quickly trades execute and what other services and information each brokerage offers. For example, it seems that if I place a trade at Scottrade it executes almost immediately, whereas there seems to be a couple of minutes lag time at TD Ameritrade … which doesn’t mean a whole lot to me, but could result in substantial losses to an active trader trying to lock in a specific price on a volatile stock.</p>
<p>Calmom, is the lag time at td ameritrade the time it takes to notify the investor of the trade?</p>
<p>Trades should be executed quickly in most cases. Not that notification should take any time. That should not happen either. </p>
<p><a href=“https://www.fidelity.com/trading/execution-quality/execution-guarantee”>https://www.fidelity.com/trading/execution-quality/execution-guarantee</a></p>
<p>Dstark – I have no idea really. I don’t trade with the frequency or the amounts where it matters to me. In fact, I very often simply place limit orders at night when the market isn’t even open. It’s actually pretty rare that I am online and in a hurry (though I have placed one or two orders bumping up to the time that the market closes) I probably wouldn’t even notice except that it seems that Scottrade fills things so quickly. </p>
<p>Also, both of brokers have different trading platforms that you can use. You can use the regular web site, or Scottrade has a second program called “Scottrade Elite” , and TD Ameritrade has 2 special platforms-- Trade Architect and Think or Swim. I think my impression of the instant-fill probably is when using Scottrade Elite. But truthfully, most of the time I don’t bother with launching the special platforms and simply place the order via the regular web sites. Both also have mobile apps, but I don’t use them. I use some mobile apps to check my portfolio & other market data - I like wikinvest – but I prefer to make transactions on my laptop-- and definitely do not want to make it easier for me to make impulsive decisions. I make much better investing decisions when I take things slowly and plan ahead. The main concern I have is that I have stop loss orders set most of my holdings, and in a high volume, rapidly falling situation, a few minutes could make a big difference. </p>
<p>But my trading style is more along with placing limit orders and letting the computer do its thing on the other end whenever it can. Even if I’m trading during the day, I’m far more likely to place a limit order and then come back a couple of hours later to check on it. I do have a day job to attend to. </p>
<p>I’d just add that neither of the brokers I use has an execution guarantee like the one you linked to at Fidelity.</p>
<p>Rather, they both say essentially, “we’ll try really hard”
See: <a href=“Market Order Execution | TD Ameritrade”>https://www.tdameritrade.com/tools-and-platforms/trader-offering/order-execution.page</a>
and <a href=“Scottrade | TD Ameritrade”>Scottrade | TD Ameritrade;
<p>I don’t think I would be using either broker if I was doing the kind of trading, at the sort of volume, that you are talking about. But I am no where near that.</p>
<p>I was just concerned that it takes so long for an order to be filled or for the investor to be notified. </p>
<p>If I am paying the offer or selling the bid, I want to know if I am filled. The trades really dont take long to fill. </p>
<p>If I put in limit orders away from the market, I dont necessarily watch. I just wait to be notified by email. </p>
<p>I am not trading like I used to trade. That is too much work. :)</p>
<p>I traded 3 times today.
Yesterday… Zero.</p>
<p>I usually just put on a position and wait. </p>
<p>Today was option expiration and I did not want to lose some of my at&t stock so at times I had to pay attention today. </p>
<p>
Putin didn’t fool me and a lot of people either. Just can’t stand this half naked guy on a horse that often appears on my TV somehow.</p>
<p>@Dstark
Well it could just be the trading platform and the way that a “fill” order is displayed. I also have issues on the main TDAmeritrade site sometimes with cookies and page refreshes - that is, sometimes I go to a page and I have to do a page refresh to get current info. It could be a browser issue – I use chrome and some web sites don’t play nicely with chrome. I believe that the Think or Swim platform designed for traders who want something really responsive, but I found that to be overwhelming. Way too much info on the page at the same time for me. </p>
<p>
Well if I had written a call against stock I wanted to hang onto… I’d make a decision before the close of the trading day and buy back the call if necessary. It’s got no time value on expiration day, so if it’s not clear where it is going to end up 20 minutes out, I’ll eat the commission and move on. I wouldn’t wait until the last minute to try to place a trade I cared about, because even if the brokerage can act on the order instantaneously, that doesn’t mean that my computer and internet connection are flawless. Actually I’d more typically close the position several days ahead. </p>
<p>Calmom, you are correct that if you wait until the last minute you can run into problems getting filled. I did not wait until the last minute. I bought some stock an hour before the close and some stock several minutes before the close. I did not buy the calls. The stock was trading a penny wide (or less) while the options were trading wider.</p>
<p>For example, lets say the stock was 34.88 bid and 34.89 offer. The 34.5 calls were trading wider. Bid <a href=“mailto:.36@.41”>.36@.41</a> offer. Equivalent to 34.86 bid and 34.91 offer in the stock. So…in this case…if I traded the options, I would have to pay more for than the offer in the stock to close the position. The difference between the bid and offer in the options changed throughout the day but I would see option markets like this. The market in the options was thin and the volume was light. </p>
<p>Just because the options are going to expire with no premium does not mean you can buy the options at that price. </p>
<p>With the stock well above the strike, it wasnt worth it to me to pay a little more for the options. The odds were very high the calls were going to close in the money.</p>
<p>I am trading for small margins. I did not know where the stock was going to close. I was thinking of rolling out the options and if the premiums were higher and the was stock closer to 34.5, I may have done that instead of buying the stock. The premiums didnt seem worth rolling to me plus as the day rolled on I decided I did not want to be short calls against my stock position anymore. I will see if that is the correct position over time. I may change my mind on Tuesday. :)</p>
<p>There are programs out there where you can tie your bid or offer in an option to the bid or offer in a stock. ThinkorSwim may have this capability. Schwab may have this capability on one of their platforms. So…I could set up a trade on some platforms, for example, buy 10 at&t 34.5 calls for parity with the bid on the stock and with a .30 top.</p>
<p>This means I would not pay more than .30 for the option and would pay no premium. No guarantees I would get filled of course. </p>
<p>I am not telling anybody to trade like I am trading. I realize that people trade differently and have different needs and wants. Traders have different risk tolerances and different financial situations. Some traders want to spend a lot of time watching markets. Some don’t. People should trade in the manner that fits their financial goals, their psychology, etc. Options are not for everybody.</p>
<p>I am not trading the way I used to trade. I am not optimizing anything. Occassionally, I will point something out in this thread. Otherwise, we are trading war stories here. We each have our own stories. The war stories don’t have to have anything to do with options either. :)</p>
<p>I did get assigned on the at&t 34.5 calls. :)</p>
<p>“Putin didn’t fool me and a lot of people either. Just can’t stand this half naked guy on a horse that often appears on my TV somehow.”</p>
<p>Well that’s not a surprise. For some reason there are lots of Russians in my industry who I work with. They universally agree with Putin. One guy who happens to have been born in the Ukraine during WWII likened it to the US and Canada which he felt should be a single nation.</p>
<p>
Putin has 87% approval ratings in Russia and this is why I’m not surprised at this comment.
I did read in SeekingAlpha that the Ukraine government also has lots of thugs too. But I was reminded by my husband whose great grandfather came from Germany and whose grandparents/parents fought in WWI and II that’s how Germany started invaded Austria because there were also lots of German in Austria and they were protecting the Germans.</p>
<p>
What’s the advantage? Bigger rate of return?</p>
<p>In my short term trading account, I had no intention of holding long to anything and I usually made a good chunk of money in 15 minutes, in and out like that.
But on my intermediate account, I trade long term options, so like the AAPL options that I’ve just closed, I made 60% of the option price in less than 2 months. This allows me to not have to watch it all the time. I had every intention of purchasing the stocks but in the end I decided to let go because I still have more AAPL options so I can take a little bit of profit off.</p>
<p>The only trade that I made was yesterday: I bought 9/5 200 - 199.5 puts and sold 198 - 182 puts for a net gain of $1.40 LOL!</p>
<p>“The only trade that I made was yesterday: I bought 9/5 200 - 199.5 puts and sold 198 - 182 puts for a net gain of $1.40 LOL!”
DrGoogle, nice on aapl.</p>
<p>My rate of return is low. The probability of success is high.
How much can you make selling a straddle for .40? And you have to put up capital to do that trade. </p>
<p>I reserve the right to do variations on doct’s trade. :)</p>
<p>I’m looking at GOOGL options now. Just out of curiosity, there is Sept Put for 300 with a premium of $12+. How could this be? I’m sure GOOGL will not drop to $300 by the end of this. But this option has no volume. What’s up with that?</p>
<p>The bids are 0.00. </p>
<p>Oh, this must be one of those left over pre-split?
<a href=“Symbol Lookup from Yahoo Finance”>Symbol Lookup from Yahoo Finance;
I’m surprised the premium is not more. Something odd.</p>
<p>Nothing odd. </p>
<p>Those options are worthless. </p>
<p>I get it now. The premium confused me.</p>