Ok, so I have been behind on posting, I apologize(which I am likely doing so mostly to myself).
So, we left off I was long the Q's, that following day before earnings I was down flirting with my loss limit during the day, but sure enough at the end of the day I was only down less than 1%, well within my risk tolerance. I figured MSFT would post good earnings and lift the market and particularly the Nasdaq. This did in fact happen, however the gap up only gained me 500 initially, however this was on 20 contracts. That decayed however so I got out even as I figured that is as high as we would go for the day and it would just sit from there and I'd lose money so I sold at break even and decided to buy puts on the Q's instead. I bought 100 contracts and the options gained 10 cents at the time up 1,000. The stock started to stop and trended sideways, then started back up, it broke the down trend line so I then exited, after the previous experiences I am trying to be more patient and wait for confirmation of broken trade before exited rather then setting a sell limit.
This time that worked against me however I did get out with 500 gain. However, lets take a closer look. That 500 gain was actually only 330. Ameritrade charged 9.99 per trade and .75 per contract. Which means they took 170 dollars home on my work and in the proces took 1/3 of my profit. Obviously 330 is nothing to be upset about but I could have exited multiple times at different prices but Ameritrade also only allows me to trade options in 5 cent
increments. So what could have been a 800 dollar gain is cut even smaller.
This is getting me thinking about different brokers because some places charge significantly less money and if I am trading more that will mean more profit and less loss in the long run for me. If anyone has good suggestions for low priced option brokers please let me know. One guy I know said there is a place that charges 9.99 for 50 contracts, which would have let me keep way more of my profit. My only fear is going with something less reliable and reputable, so I'll have to do some research.
Right now I am only long 10 Jan calls on YUM, waiting on my other two favorites GOOG and AAPL to pull back, that have had trouble getting over 675 and 185 as of late so that may be a price to watch. I have a few bearish plays on the radar thanks to Jeff and the other OA's but haven't decided on which to go with. Time for good old fashioned research.
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4 comments:
Here is a suggestion for a different broker...zecco.com
I believe it is something like 4.50/trade and .50/contract.
That should cut down on your expenses.
Dan
Thanks Dan, I'll definitely check them out! I appreciate it that would definitely cut down the expenses. It would be smart of ameritrade to cut their costs because I have a feeling options will get more and more popular but people will go for diff sites.
Ben
Hey Ben,
It is educational for me to watch what you are doing - thanks for taking the effort.
You may already have an arsenal of tools that you use. If I didn't have InvestTools, I would sure use the ThinkorSwim platform as they offer many tools, particularly Prophet Chart. It is not as robust as IT but it does offer a lot of the same functionality. The desktop app is the only way to go as the web-based platform is too slow and does not offer the same features. Their pricing structure is at https://www.thinkorswim.com/tos/myAccounts/displayRates.tos.
And by the way, I am now only down 2.15%!
Happy Trading!
Jim
Thanks Jim, glad it can help you.
Congrats! that is great, I am still stalled at 20% down. I haven't taken too many positions lately. I feel too compelled to take all these bullish trade setups and don't have good bearish ones to balance it out. I don't want to get caught too biased now.
keep up the great work and tell me how to make my money back like you ;-)
Ben
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