Help In Choosing An Option Broker
Reliable Options Broker
Here’s a question from a member about how to choose the right option broker and my response:
There is something that has me wondering. If you do a trade such as Iron Condor that has multiple components (4) or a vertical spread (2) can you change or adjust just one or two of those components? You’ve talked about adjusting one side of an Iron Condor by using a butterfly I think. Anyway, it made sense to me. But how does the broker know, when you do the adjustment, that you are adjusting a particular trade and not putting on an additional trade. Maybe it is different depending on your broker. I actually did the aapl iron condor that your wife put on, just for fun and because it looked like a sure thing. I called my broker, Etrade, to ask how I’d make an adjustment with the butterfly if it came to that. He said I’d have to call him and let him do it, at no extra charge. Is this the case with all brokers or should I be able to do it online?
I realize that Etrade is not an OPTIONS BROKER, but that’s who I have for now and they have most of the tools that I understand and it is easy to make a trade, at least so far. And they are a lot cheaper than thinkorswim as far as I can see. I’ve started the account process at thinkorswim and at Trade King but haven’t funded either yet. I won’t put money into either of them until I’m sure I understand their order processing program. It took me hours to figure out the process at thinkorswim today on their paper trading program. I have no idea how I’d make an adjustment on an Iron Condor. I guess my big problem is that ... I don’t know what a real options broker is capable of and what kind of service I should expect from them.
I like charts of the underlying stock, ETF, or index. Etrade has a great chart and I can overlay an options chain and the order entry window all in one frame. It’s great. Trade King doesn’t offer charts unless you have $25K with them. Thinkorswim, well the order entry process isn’t near as easy as Etrade, but everyone seems to rave about it. I’m paying Etrade $7.99/trade plus $.75/contract. I think that’s about half thinkorswims rate.
I’ve done a lot of research of brokers and have read the blogs on your website. I’m just really in a quandary about brokers. I’m happy with Etrade so far. I’ve done covered calls, put credit spreads and some LEAPS with them with no problem. Oh yes and your wife’s Iron Condor which I’ve already gotten out of with a small profit. I want to be able to do the trades exactly as you recommend, adjustments and all and I think I can make it work on Etrade without the commission killing me. (Am I missing something on commissions?) I think I will stick with Etrade for another month or so and continue to try to figure out thinkorswim and Trade King. The only thing Etrade lacks is the different options calculators. But I’m thinking that I may not need those if you’ve already figured that out for me. (But it would be nice to see where you get your numbers.)
I’d appreciate your input on this and I promise I won’t bug you like this too much. I know you must be busy enough with so many other thing, not to mention the next great trade.
Best Options Brokerage
I think you are doing fine. You have chosen two good brokers to open accounts with. Play with their papertrading modules and see if you feel comfortable. Your broker is like your partner. Take the time to make sure you have one you like working with.
TOS has people that will personally walk you thru the whole platform for free. The same for their new Trade Architect. I signed up for both because I think it will help me more than even the videos.
Is the $1.50 per option and no other fee only for the Autotrade?