Buying/Selling Options

[pcgeek86]

So, a couple more questions that have come to mind:

a) IB will allow the selling of put options, correct? Isn't it kind of odd that Scottrade doesn't allow you to do that?

b) Is there a limit from the SEC concerning intra-day options trades, as with intra-day equity trades? I would guess that due to the fluctuation I've seen on some options prices, I probably would not hold them for much longer than a day or two, depending on whether or not the equity price goes in my favor.

 

[smilingsynic]

Quote from pcgeek86:

So, a couple more questions that have come to mind:

a) IB will allow the selling of put options, correct? Isn't it kind of odd that Scottrade doesn't allow you to do that?

b) Is there a limit from the SEC concerning intra-day options trades, as with intra-day equity trades? I would guess that due to the fluctuation I've seen on some options prices, I probably would not hold them for much longer than a day or two, depending on whether or not the equity price goes in my favor.

Yes, IB allows the selling of puts. In an IRA, IB allows cash-secured puts.

I never heard the pattern day-trade rule applied to options. See CBOE on margin rules on options (the rules are supposed to change in 2007).

 

[smilingsynic]

Quote from jeffalvinson:

No I do not work for I.B., but I am willing to bet you if you ran a survey poll for traders with 4 or more years experience trading, at least 50% of those traders would say their broker is I.B.
The monthly account fee is only $10.
You will make up for that with one option trade compared to Scottrade (look at my example again in my last post).
I.B. gives you a live trade station that is actually displaying what is happening in with all markets active real time.
Orders are routed to any of several exchanges.
You look at the live ask price, click the ask and you own in a split second.
You look at the live bid price, click the bid and its usually sold in a split second.
Automated 'Bracket Orders" (buy/sell/stop all in one order) require no attention at all. You walk away and let the tradestation do your job for you. That removes human error and human emotion from the trade.

IB also allows options to trade in penny increments (more narrow spread).



I have used them since 2000. I wouldn't even consider using a different broker.


Jeff

 

[Maverick74]

Quote from Linda Options:



Options as a strategic Investment (by Sheldon natenburg)

Collars (for hedging stocks) by randomwalktrading.com

The option Trader Handbook by Phillip Budwick
hope that helps

Linda, you lose all credibility when you can't even match the correct author's name with the title of the book. And you should be embarrassed for recommending that crap $500 book on collars.

 

[pcgeek86]

Quote from Maverick74:

Linda, you lose all credibility when you can't even match the correct author's name with the title of the book. And you should be embarrassed for recommending that crap $500 book on collars.

Do you have any book recommendations or other areas I could learn? At the moment, I'm going off of what I can find on various websites such as MorningStar.com and Investopedia.com. Both those sites and others have been most helpful to me while learning about the stock market.


@Linda: Thanks. I'll check out that book on Amazon. I can't really afford expensive seminars ATM :-|

 

[El OchoCinco]

The 3rd book Linda recommends is @#$%ing awesome!

 

[Wayne Gibbous]

nahhh, i've read it and it is WEAK!

just kidding with ya philly!

 

[daytrader85]

Quote from jeffalvinson:

No I do not work for I.B., but I am willing to bet you if you ran a survey poll for traders with 4 or more years experience trading, at least 50% of those traders would say their broker is I.B.
The monthly account fee is only $10.
You will make up for that with one option trade compared to Scottrade (look at my example again in my last post).
I.B. gives you a live trade station that is actually displaying what is happening in with all markets active real time.
Orders are routed to any of several exchanges.
You look at the live ask price, click the ask and you own in a split second.
You look at the live bid price, click the bid and its usually sold in a split second.
Automated 'Bracket Orders" (buy/sell/stop all in one order) require no attention at all. You walk away and let the tradestation do your job for you. That removes human error and human emotion from the trade.

I have used them since 2000. I wouldn't even consider using a different broker.


Jeff

I don't know if IB still does this, but don't they also have cancellation fees on option trades? 10 cents or something every time, right?

 

[pcgeek86]

Quote from daytrader85:

I don't know if IB still does this, but don't they also have cancellation fees on option trades? 10 cents or something every time, right?

What is a canceled option?

 

[smilingsynic]

Quote from pcgeek86:

What is a canceled option?

If you cancel an ORDER for an option, IB can access a fee. IB is merely passing on the cost to its custoimers, who cancelled the order in the first place.