Picking the Best Online Trading Broker For Cost and Quality

Whether you are just beginning online trading, or you are a more experienced investor, picking the right online broker is a very important part of your success as a trader. When you are just starting stock investing, you should weigh the cost factors more heavily. As you gain more experience, you will learn what features are important to you, like trading tools, customer support, live broker assistance or the availability of branch offices that you can visit.

As a new trader, look at the category of discount brokers. Don't let the term "discount" scare you. There are some very big names in this category that have built a solid reputation for serving the needs of individual traders. Names like E*Trade, TD Ameritrade, TradeKing and Scottrade.

But can you get quality along with your choice for a cheap online broker? The answer is a resounding YES! Here are some of the quality awards and recognitions for these brokers:

E*Trade - Rated the #1 Online Broker by SmartMoney - The Wall Street Journal Magazine and received 4 out of 5 stars by Barron's annual ranking of the best online brokers.

TradeKing - Rated #3 among all online brokers in 2008 and "Best" in Customer Service by SmartMoney - The Wall Street Journal Magazine as well as their #1 Discount Broker in 2006 and 2007. Also top-rated among web-based brokers by Barron's.

TD Ameritrade - Rated #4 overall in 2008 by SmartMoney magazine and ranked "Best" in quality of trading tools.

Scottrade - In the current survey (October, 2007), Scottrade was ranked Highest in Investor Satisfaction with Online Investing Services by J.D. Power and Associates for the seventh time.

So there it is, you have several good choices for a low-cost and high-quality online trading broker as measured by independent industry experts.

Download my free guide, "7 Steps to Online Trading Profits" for the full cost comparison of these online brokers at http://www.beginningonlinetrader.com/

Daniel B. Johnson is vice-president of a wireless communications company based in Dallas. He maintains a successful online trading career on a part-time basis to earn an additional income stream.

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Options Trading Explained - Is Options Trading Really For You?

As an investment professional who has extensive experience dealing with stock options, I am often approached by friends and family members who want to learn more about options trading.

After all, the prospect of making quick money is alluring. Although many of my colleagues are institutional traders who have made an obscene amount of money for their trading desks either selling or buying options, I kept on refusing to teach my enthusiastic cousin in college the fundamentals of options trading.

Why? Because options trading is not for everybody. In fact, I would go as far as saying it's not for the average investors as they don't have the required knowledge and mindset. Without first learning the basics, you'll be hard put to make any real money in the world of options.

Misjudging the market direction or choosing the wrong option strategy might even cost you thousands of dollars. My cousin is, for example, financially unprepared to deal with the potential losses. He doesn't have the market acumen to spot trends that might affect the value of options.

Unlike stocks, options will expire and there is always a possibility that all your contracts expire worthless on the expiration date.

You can make tens of thousands of dollars in options trading. Using football as an analogy, if you are fast, well prepared and have a burning desire to win, you will. However, you must still know the rules of the game very well. To be truly effective, you need to know what are the drivers of option prices. If you are willing to invest the money and time to educate yourself it is entirely possible to make massive profit in the options market. However, most people I met don't want to spend the time to learn the rules of the game, they just want quick money.

In my opinion, options trading is not suitable for retirees, as the investment goal of retirees should be capital preservation and current income. Bonds and Treasury notes are more appropriate. If you're in your 20s to 50s, options can give you the financial leverage you need.

Most retail investors lose money trading options while institutional investors pocket the big profit. Success comes from experience, instead of risking your own money, I will give you all the help you need to be successful in options trading. The sooner you begin, the faster you'll get where you want to go.

Institutional investors can make $1,000,000s trading options, yet most individual investor lose in the options market. Find out why at ibankinsider.com.

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The Truth About Most Option Trading Seminars

Are you about to pay thousands of US Dollars to attend an option trading seminar this weekend?
Whether or not you have decided to join that weekend seminar, I hope I can help you make a more intelligent decision here.

A Grim Experience At An Option Trading Seminar

I had a friend who joined a weekend, 2 days, option trading seminar (a very well-known one by the way), promising that every participant will walk away with enough knowledge to profit at any market condition and be on their way to their first million just by option trading. He paid USD$3000 for the 2 days seminar and walked away feeling all hyped up but totally confused as to how exactly to start option trading.

He was then told to sign up for an advanced course for another USD$5000 for 4 days. That 4 days seminar taught him little more than option trading basics and how to open a trading account but still completely no idea whatsoever as to how to read the market and pick stocks on which to trade options in the first place. He was then asked to buy a USD$6000 laptop containing a magical software that will tell him exactly what to trade daily. That software turned out about a hundred opportunities a day… again, he is totally confused.

After paying a grand total of USD$11,000, my friend had completely no idea how to start trading options consistently and you guessed it, he ran into another USD$11,000.00 in credit card debt which he is still paying 24% per annum of interest on. (Not to mention losing another USD$5000.00 on losing trades produced by that “magical software”)

The Truth About Most Option Trading Seminars

The truth about option trading seminars these days are that they are conducted by people who claimed to have made millions from option trading but are really making millions by conducting seminars like that.

Here’s a math from an internationally acclaimed option trading “guru” who charges USD$2500.00 for her 4 days seminars:
Cost Per Head : USD$2500.00 Average Number of Participants : 120 Average Number of Seminars Per Month : 2 Average Gross Takings Per Month : USD$600,000.00 Average Gross Takings Per Year : USD$7.2 MILLION! See how these option trading “gurus” are really making their millions?

What Option Trading Seminars Really Teach

Sadly, most option trading seminars have nothing magical nor proprietary to teach. Most of these option trading seminars simply teach people what option trading can do and how to do some of the common option trading strategies which anyone can learn completely for FREE on option trading sites like OptionTradingpedia.com.

These fake option trading “gurus” then use a lot of hype and motivational techniques to make all participants think that they have indeed stumbled upon a gold mine.

What Option Trading Seminars Are Not Teaching You

Option Trading, like all kinds of trading activities requires foremost for the trader to be able to pick the right stocks that behave within the predetermined limits of the strategy in the first place. You will lose money if you do a bullish option strategy on a stock that stumbles eventually and you will lose money if you do a neutral strategy on a stock that suddenly surges.

The ability to pick the right stocks is the real key to any kind of trading, including option trading and that is exactly what you will not learn in most of these option trading seminars. This means that most of these option trading seminars really have nothing proprietary to teach anyone at all!

To make up for the gap, these fake option trading “gurus” make participants sign up for stock picking programs or buy expensive software which eventually still led to nowhere. Being able to pick the right stock for option trading is an extremely tricky task which the best in the industry are still trying hard to do consistently!

Everyone who learnt option trading must then begin the long and arduous journey of looking for a reliable way of picking stocks for option trading consistently. That is a long and wide journey which includes learning about fundamental and technical analysis, different scopes and methods of trading options and things like that… things that really do have proprietary knowledge and which is ok to pay a fair price for.

I am sad to see so many people who loves to learn about option trading fall prey to these option trading seminars and to pay thousands to learn things that can be learnt for free. That is why I started the OptionTradingpedia.com where I provide all the information and knowledge all beginners need to know what option trading is and how to trade options and I sincerely hope that the public can help me to help yourselves by spreading the good news around.

Jason Ng is the Founder and Chief Option Strategist of Masters 'O' Equity Asset Management ( http://www.mastersoequity.com/ ). He is a fund manager specialising in options trading and his Star Trading System has helped thousands. For Free Option Trading Knowledge, please visit http://www.optiontradingpedia.com/ .

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Options Trading FAQs

Options trading involves, buying securities such as currencies at a particular time, with a hope to resell it later at a higher price. The profits or losses incurred are determined, by these price changes that are in relation to the price fixed, at the beginning of the contract. Options trading generally deals with trading treasury bonds, stock indexes and foreign currencies. Speculation in options trading is on the rise with the availability of technology and services.

As the options market is very volatile, traders prefer to opt for a fully managed account with the brokers. The most frequently asked questions (FAQs) are, what are the types of options trading products, how can people begin trading, and where can they find help regarding their trading strategies.

Standard options contracts that are traded over-the-counter and are generally referred to as plain vanilla forex option products. They have very good liquidity for major currencies. The brokers who offer this product are known as plain vanilla forex option brokers. However, many option brokers offer plain vanilla forex option only over the phone and not online.

Another type of options trading is exotic option trading. They are termed as exotic as these options usually deal with currencies that are not traded too often. These products are also known as non-vanilla, and their structure may be quite different from the standard option. These exotic options do not offer much liquidity and are generally designed to suit individual needs.

Options brokers offer the investors a quick and inexpensive way, to trade from the comfort of their homes or offices, day and night. For beginners, many online websites of these brokers offer, demo or trial accounts that help the investors, practice their trading skills. These accounts also help increase the understanding of the functioning of the real time trading market.

There are many different options trading products available. It is very important to understand all the risk factors, associated with all of them before choosing a suitable one. Options brokers help the investor select the product that will give them best returns.

Options Trading provides detailed information on Options Trading, Stock Options Trading, Futures Options Trading, Options Trading Software and more. Options Trading is affiliated with Options Trading.

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Japanese Candlesticks Are Calling For a Bounce in Index Prices

The Dow Industrials Index has been in a fairly steady slide since it made a double top in May.

The Dow has already spiked down beneath its March low, which may turn out to be an important waypoint. The S&P 500 has tagged along in quite the same overall pattern. The declines in the NASDAQs, the S&P 600 SmallCaps, and the Russell 2000 have been more chaotic. All of them are at or near lows of about two months ago.

The patterns that we are seeing today in the Candlesticks and in the various Indicators for the Dow Industrials and for the S&P 500 suggest "indecision" and the possibility of a trend reversal.

The price patterns in the NASDAQs, the S&P 600, and the Russell 2000 are much more persistently downbeat. They are "leading the pack," as they often are wont to do.

No Candlestick pattern, or Indicator, or group of Indicators, is foolproof. However, based on the historical record we know that certain patterns are generally reliable in their prediction of the direction of price trend. We could be fooled this time, just as we have been fooled before; but the patterns are so clear and so prevalent across several Indexes that the odds seem to say that prices will bounce from approximately this point, or from moderately lower levels.

If they do rise, how far are they likely to go? Again, on the basis of historical precedent prices may be expected to retrace between 38% and 62% of the previous major decline. If history holds true this time, we might expect to see the Dow top out at between 12,270 and 12,600. The strength of the decline since last October may rule out anything much more than a very modest bounce. Likewise, the "drag effect" of the NASDAQs, the S&P 600, and the Russell 2000 may put an early stop to any rise in the Industrials and in the S&P 600.

Today is the first day of the two-day meeting of the Fed's Open Market Committee. We expect to hear the result of its deliberations tomorrow afternoon. Any spark of good news might tend to set the market off in an upward direction. There is ample speculation in the marketplace about the likely course of interest rates. The Fed is caught between a desire (on the one hand) to increase interest rates in an effort to tamp down inflation, and (on the other) to lower them as an attempt to light a fire under the housing market. Unfortunately, there is a degree of mutual exclusivity there; the Fed (and the country) cannot have it both ways.

Regardless of the outcome of the meeting, it does appear that the odds are increasing in favor of the proposition that we can reasonably expect to see a bounce in Index prices quite soon. We shall see.

William Kurtz June 24, 2008 http://www.candlewave.com/

The author is an experienced investor; a retired attorney and corporate CEO; has passed the NASD Series 65 Investment Adviser exam; and is the creator of the "Candelaabra" technical analysis system for use in all financial markets. He publishes free investment advisories three times per week at http://www.candlewave.com/ Come look! The latest issue is ready and waiting for you.

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Options Trading

An option is a contract that gives the buyer the right (but not the obligation) to buy or sell a specified quantity of a given asset, at a specific price, on or before a specified time. Unlike futures trading, the purchaser of an option is not obligated to buy or sell at the exercise price, and will only do so if it is profitable; if the option is allowed to lapse, the purchaser loses only the initial purchase price of the option (the option money).

The strike, or exercise price, of an option is the specified, pre-determined price at which an asset can be bought or sold if the option buyer exercises his right to do so on or before the expiration day. The price paid by the buyer to acquire the right to buy or sell is known as a premium.

The one who is obligated to buy (in case of a put option) or to sell (in case of a call option) the underlying asset in case the buyer decides to exercise his option is known as the option seller, or writer. His profits are limited to the premium received from the buyer, while his potential losses are unlimited. The premium fluctuates in response to the current market value of the security or exercise price, the time period between the strike and the expiry date, and the supply and demand in the market. The one who buys an option, which can be a call or a put option, is known as the option holder. His profit potential is unlimited, while losses are limited to the premium paid by him to the option writer.

Options Trading provides detailed information on Options Trading, Stock Options Trading, Futures Options Trading, Options Trading Software and more. Options Trading is affiliated with Options Trading.

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