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Has anybody used optionshouse for stocks and options? What about their mobile app for smartphones?
I have a Ameritrade account with a small # of shares - is it possible to transfer those shares to a new broker? If yes, is the fee substantial? My thought is that since the stock trade option at optionshouse is low ($3.95) compared to Ameritrade ($9.95), I can get the shares over and sell them from the cheaper broker to build some initial investing $.
Let me know please if anybody has done the above or how to proceed?
Thanks.

Just trying to get to good first!

good2qr8,

You wrote, Has anybody used optionshouse for stocks and options? What about their mobile app for smartphones?
I have a Ameritrade account with a small # of shares - is it possible to transfer those shares to a new broker? If yes, is the fee substantial? My thought is that since the stock trade option at optionshouse is low ($3.95) compared to Ameritrade ($9.95), I can get the shares over and sell them from the cheaper broker to build some initial investing $.
Let me know please if anybody has done the above or how to proceed?

Your question is more about TD Ameritrade.

TD Ameritrade charges a $75 ACATS out fee. You'll have to decide if it's worth it to you to do the ACATS transfer.

The real advantage to an ACATS transfer is avoiding the tax burden of recognizing a capital gain when you're just going to buy the same thing at the next broker. It can also be beneficial if you hold a number of positions.

Given that you have a small account, it may not be worth the ACATS fee. TD Ameritrade does not charge you anything other than standard transaction fees to liquidate your account and transfer the cash elsewhere. The ACATS fee is just to cover the bookkeeping necessary to transfer shares held in street name from one broker to the next ... and as a small disincentive to closing an account.

BTW, some brokers (like TD Ameritrade) will credit you the ACATS out fee charged by the broker they are receiving funds from. I actually transferred an IRA from Scottrade to TD Ameritrade this year and the broker made a point of telling me that if Scottrade had an ACATS out fee, they would have credited it back to my account if I just told them about it - above and beyond the incentive bonus they were offering for rollover IRA funds. You may not get such a "warm reception" ultra deep discounters though.

- Joel

Yes.
I have an account at OH. They're fine. I could care less about any kind of mobile app, so can't speak to that. People to who these are important always strike me as somebody who is getting ready to lose a whole lot of money.

I opened my OH account last year when they had a promo for a free 24" monitor.

Most brokers will reimburse the ACAT fee as long as the account is $5000 or so. But I agree, if it's a small account I would just sell the stocks and do the transfer myself with cash.

Thank you rayvt and Joel. I really appreciate your feedback. It sounds like it is not worth transferring the samll # of shares for the fee (it does not add up for sure in my case).
rayvt - the reason for the mobile app was to use it in case of any emergency (though as a Fool, it should not come to that I agree).
In my mind, I am a real newbie and want to get something started and so Options is what I thought I would start with.
Thanks for the replies and any suggestions/advise always welcome.

I hope you meant the broker Optionshouse, and not the investment in options.

'cause if you are a investment newbie and planning to start your investing with options, you'd be better off just piling $100 bills in your yard and touching a match to them. The end result will be the same (losing all your money) -- plus you'll have a video to post on youtube.

Ouch! Options is that bad huh? I was thinking of the basic calls to try to buy stocks at a slightly lower price. Maybe I am thinking wrong - but I really appreciate your advise. I am going to be cautious till I know what is going on.

Options go from low risk income producers (selling covered calls) to very high risk, complex speculation. Many an option genius has blow up. You need to understand stocks first. Once you do, you can tiptoe into options carefully. While I acknowledge the risks, making a blanket statement that options are too dangerous to even think about is not helpful advice. But it is not something for novices to play with.

Denny Schlesinger

I was thinking of the basic calls to try to buy stocks at a slightly lower price.

Okay, you have been reading the wrong people. Here's a free bit of advice. Go to the library and check out all the investing books written by Wade Cook, et. al. Every great strategy he writes about, you do the exact opposite. Covered calls, buy stocks just before the ex-dividend date, sell puts (which is what you use "to try to buy stocks at a slightly lower price"). Every one of these DON'T DO IT.

You might as well go into a bar and ask, "Can anybody here teach me how to play poker?" as to mess with options. You'll learn a whole lot, real quick. You will *not* like the lesson.

Hey good2gr8,

This is a quote I stole from someone else, but I feel its appropriate for you regarding Options trading.

"Options is a good way to make a small fortune .... provided you start off with a very large fortune"

Rich
Arizona

Thanks every one once again for your feedback. I will continue to study Options but not venture and will focus more on actual stocks trading.

Rayvt,

You wrote, Okay, you have been reading the wrong people. Here's a free bit of advice. Go to the library and check out all the investing books written by Wade Cook, et. al. Every great strategy he writes about, you do the exact opposite. Covered calls, buy stocks just before the ex-dividend date, sell puts (which is what you use "to try to buy stocks at a slightly lower price"). Every one of these DON'T DO IT.

I would agree about options. They're not for the novice investor.

I think the best place for options is in a large portfolio where you're trying to hedge a fairly risky bet. At that point they're like buying insurance. Unfortunately, options seem to be fairly expensive insurance and the smaller the bet you're trying to hedge, the more expensive it is.

- Joel

I think the best place for options is in a large portfolio where you're trying to hedge a fairly risky bet. At that point they're like buying insurance. Unfortunately, options seem to be fairly expensive insurance and the smaller the bet you're trying to hedge, the more expensive it is.

- Joel

You make it sound like one can only buy options. One can also sell them. The more expensive they are the more the reason to sell than to buy.

Warren Buffett is in the insurance business. I think he is on to something! LOL

But I certainly agree, options are not for novices. First you need to understand stocks and only then should you continue on to options, if at all. My problem is only with "blanket" statements like "DON'T DO OPTIONS, THEY ARE RISKY. YOU'LL LOSE ALL." That's bull!

Options can be used as hedges as you point out, they can be used as gambles and they can be used to produce income. Investor's choice

Denny Schlesinger

captainccs,

You wrote, You make it sound like one can only buy options. One can also sell them. The more expensive they are the more the reason to sell than to buy.

True. In fact I started to write about how I thought selling cash-covered puts might be safer/better than selling covered calls. But then I decided I was rambling and not adding to the conversation.

Also, Options can be used as hedges as you point out, they can be used as gambles and they can be used to produce income. Investor's choice

True. But then I'm a skeptic about the risk/reward proposition of selling covered calls. I suppose if you're holding some "dog" of a stock (one who's price changes little) that's paying a nice dividend, you could make this work reasonably well. But what stock would that be? I've had no luck finding a good candidate that I'd really want to own.

- Joel

In fact I started to write about how I thought selling cash-covered puts might be safer/better than selling covered calls.
If it's not worth doing, it's not worth doing well.

And CC's or selling CS puts are just not worth doing. A program of picking up pennies in front of a steamroller always looks like a success, right up until the point that the steamroller arrives. You collect a stream of piddling premiums and then get your face bitten off.

But people will never learn. Everybody wants to believe that there's a low-risk free lunch just sitting there for the taking that nobody else has discovered -- despite the myriad books and articles about the technique.

FWIW, I had a long string of success in selling cash-secured S&P500 index puts. Until the very last time, when I was getting ready to open a position, and asked myself why I was risking $17,000 to make $195 (minus about $10 of commissions).

True. But then I'm a skeptic about the risk/reward proposition of selling covered calls. I suppose if you're holding some "dog" of a stock (one who's price changes little) that's paying a nice dividend, you could make this work reasonably well. But what stock would that be? I've had no luck finding a good candidate that I'd really want to own.

- Joel

As they say, your mileage might vary. I've had good and bad experiences selling cash secured puts and have adjusted my parameters accordingly. Since the time I figured out how to calculate the real return of covered calls, I've done very well with them.


I've had no luck finding a good candidate that I'd really want to own.

You have to price quite a few deals to find the ones worth doing.

Denny Schlesinger

Biggest threat with options is its expiry.

Heh. And the biggest threat with a gun is the bullet. Which is kinda the whole point. That one thing encapsulates essentially the entire risk, and it's coming up quickly and cannot be ducked.

Biggest threat with options is its expiry.
I feel a Monty Python moment coming on....

What about the spread? (AAPL Aug 615 call 8.20/8.30)
Well, expiry and bid/ask spread.

And the price spikes? (AAPL Aug 615 call at 8.20 up 5.18 from prev close or 158%)

Well, price jumps AND spread AND expiry. But other than those what have the Romans done for us? Oops, I meant "...where is the risk?"

Options are high risk, much riskier than stocks. That's okay, it's the nature of options -- people who know about it and know how important risk management is, can do just fine. However, newbies know none of that stuff and so are going to invariably lose their shirt.

Rayvt,

You wrote, Options are high risk, much riskier than stocks. That's okay, it's the nature of options -- people who know about it and know how important risk management is, can do just fine. However, newbies know none of that stuff and so are going to invariably lose their shirt.

No. Not invariably. A few will get lucky and make a killing. Then they think they're experts or have a talent or worse yet, they think they understand the options market better than everyone else.

- Joel

No. Not invariably. A few will get lucky and make a killing.

Ha! I've seen that movie. Even had a starring role. You're a frigging genius ... right up to that moment when the steamroller arrives. (Luckily I got the message before my account got totally flattened. It got squashed pretty bad, though.)

Rayvt,

You wrote, Ha! I've seen that movie. Even had a starring role. You're a frigging genius ... right up to that moment when the steamroller arrives. (Luckily I got the message before my account got totally flattened. It got squashed pretty bad, though.)

Around the end of the '90s I had a number of arguments with some fellow on TMF (or maybe it was on a Yahoo board) that couldn't spell and who may or may not have had English as his first language. He kept insisting that "we just didn't understand how to pick stocks" and that he did. That he was a genius at it in fact and was making a killing. He kept scoffing at us and our discussions.

After the tech bust, he quit posting. At least he disappeared from the forums I frequented.

- Joel

Maybe he made such a killing than now he only talks to Kings and Princes, not to lowly Fools! LOL

Bloody foreigners! Can't even speak proper English.

Denny Schlesinger

Agree with you there brother. However newbies also gotta start somewhere. That is why I suggested the simulated trading to begin with. One can trade with fake money for 3-6 months and then start playing with small amount of real cash and build confidence. With proper risk management in place and small bets, you will know if options are for you or not. But just flat out staying away from them just because "they are risky" is beyond my comprehension. That is all I meant to say :)

Good luck trading