My Online Stock Option Brokers (Part 2)

Go to �Part 1�.Interactive Brokers (IB): Fewer steps for placing a trading order, and hence it�s faster in order placement procedure. Very good for those who are already familiar with trading order placement. Fee and Charges for Options Transaction: USD 0.75 / contract.Minimum commission charges per order is USD 1.Hence, when you buy only 1 contract, they will charge you USD 1. And when you sell to close your position, they will charge you another USD 1.For more details, you can check out here. Minimum initial deposit to open an account: USD 5,000. For IB, after you apply for account opening, you need to get their approval first before you can open an account with them. After your application is approved, you can then proceed to fund the account. Please note that for IB, your account will...

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My Online Stock Option Brokers (Part 1)

In the previous post, I pointed out some factors you should consider when you�re choosing online broker for you.To help you find some more info for consideration, I�ll share with you here what I know about my own brokers. I personally use OptionsXpress (OX) and Interactive Brokers (IB). Hope the following info can be quite helpful.OptionsXpress (OX):Good for beginners. The system guides you step-by-step what you need to do when you�re placing a trade.Nice charts. They provide real-time streaming chart (powered by Prophet.Net) and real-time streaming quotes & option chain for free. I like their charts. It�s clean and easy to use (e.g. apply indicators / studies). You can use the charts once you apply to open an account with them.They have a lot of great tools like Options Pricer, Historic...

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List of Some Online Stock Option Brokers

Here is the list of some online stock option brokers. Hope this can help you doing the research. :)(Clicking on the following links will bring you directly to the options info page).* Interactive Brokers* OptionsXpress* Thinkorswim* Scottrade* TD Ameritrade* E*Trade Financial* Schwab* Fidelity* TradeStation* Trade King* Trading Direct* MB Trading* Zecco* OptionsHouse* TradeMonsterI�m sure this list is not complete. Please feel free to inform me if you know other online options brokers that are not listed above. I will add it in the list. Thanks. :)Update 1 Jun 07:Steven of Value Blog Review has done a great job. He did a research and made comparisons of option trades� prices for contracts in various sizes (1 contract, 10 contracts, and 50 contracts) for various discount online stock option...

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How To Choose An Online Stock Option Brokers

To start trading options, you will need to find an online brokers with option trading facility and open an account with them. Online brokers usually offer relatively lower commission charges, so it�s good for keeping the trading cost low. High commission charges can slowly eat up your capital without you realizing it.There are many online option trading brokers out there. Finding the right online broker to meet your needs or requirements could be a quite difficult and daunting task.Basically, there are some factors you will need to consider: Commission / other charges.Minimum initial deposit to open an account.Website performance (e.g. website�s loading speed especially during peak hours, whether the order placement procedure is easy and not complicated or confusing so that you won�t be prone...

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OPTION PRICING: How Is Option Priced? (Part 2)

In Part 1, we know that there are 6 factors that affect option's price: option�s strike price, stock price, time to expiration, implied volatility, interest rate, and dividend.Nevertheless, the impact of interest rate and dividend are often considered negligible as compared to the other factors. Most of the time, for each level of strike price, an option�s price will move due to the movement of underlying stock price, volatility and time.The Black-Scholes formula can be used to calculate the theoretical value of an option based on the above factors. What is the use of knowing an option�s theoretical value? By knowing the option�s theoretical...

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OPTION PRICING: How Is Option Priced? (Part 1)

Option price does not always move in conjunction with the price of the underlying stock. As such, it is important to understand what factors contribute to the movement in the option price, and what effect they have.There are 6 factors that affect option price:1. OPTION STRIKE PRICEStrike price determines whether an option is In-The-Money, At-The-Money, and Out-Of-The-Money.The more deeply In-The-Money (ITM), the higher the option price will be, as it carries more intrinsic value.The further an options is Out-Of-The-Money (OTM), the lower the option price will be.2. CURRENT STOCK PRICEThis factor has opposite impact on call and put (assuming all other factors kept constant):When stock price increase, Call premium will increase and Put premium would decrease.When stock price decrease, Call premium...

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Option Chain

Option Chain is a list of option prices of a particular underlying stock for various strike prices, expiration dates, and option types (calls or puts). This is where option traders get the current market price of an option during trading hours. The prices in the Option Chain will change throughout the trading day based on the stock price movement, volatility and time.A sample of option chain can be seen below.Picture courtesy of Optionsxpress.THE COMPONENTS OF OPTION CHAIN: Option Expiration Month: The months on top of the table.Strike Price: The prices at the center (vertical).Calls are at the left of the Strike Price, and Puts are at the right...

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Finally The Blogger Problem Is Solved!

After being in an �agony� for over one week, finally the posting, editing and layout problems in the Blogger are resolved! In fact, these problems are not due to Blogger system, but because of the internet service provider issues. Thanks to the suggestions from people with the same �fate� in Blogger Help Group that now we have a solution to this problem. Even though it�s only a temporary solution, I am happy enough so long as I can blog properly now. Have a good d...

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My Plan For This Blog

I am still on the way in developing the series on options trading basic summary. Just bear with me if you find the postings are still theoretical and �dry�. I intend to make these series as a summary of important points you need to note on the basic of options trading. I also want to help those who wish to learn option trading even from scratch to give them some idea about options trading.Subsequently, I plan to share on how to get started (e.g. finding online brokers, setting up real-time streaming charts, virtual trading, etc.). This is for the benefit of those who start from scratch at all, and still have no idea how to start trading.Afterward, I will move on to discuss some basic on stock trading (e.g. fundamental & technical analysis, stock research, etc.), money management, trading...

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Another Problems With Blogger

I�m having another problems with the Blogger. I couldn�t make any posting. My �Create Post� template looks weird. The horizontal task bar is transposed to vertical bar. Luckily, I manage to find the solution to this problem from the Blogger Forum, so now I can make this posting. But I am still having a problem with my �Layout� template in the Blogger. The �Add Page Element� is now missing. I am still trying to find the solution to this problem. Anyway, I will do more postings soon to catch up. Have a nice d...

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Problems With New Version of Blogger: Cannot Publish A Long Post

I encounter some problems with new Blogger. Don�t understand why I cannot publish a long post. Every time I publish quite a long post, the system will give me a warning like �Cannot connect with Blogger��� At first, I thought there was a problem with connection or Blogger is doing maintenance. But this problem seemed to continue for a few days, until I realized that actually it�s because I was trying to publish a long post. When I made the post shorter, I managed to publish it. I guess, based on the experience I had, the max word count I can publish in one post is only 285. That�s why, if you notice, I got to split some postings with more than 285 words into Part 1 & Part 2, while actually it�s not really necessary. Quite irritating�I know from the Blogger Forum that many people are experiencing...

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