Options Brokers/Software

[swingstar]

Hi all

Just wondering what brokers people use for trading options? I've been using E*TRADE for a while but just ventured over to CommSec and am blown away by their Professional Trader 2 platform.

I use The Bourse for technical analysis, but it's quite expensive for real-time data. I'm thinking of downgrading my Bourse subscription to only end-of-day data and still use it for analysis, and use PT2 for entering/exiting trades. PT2 is free if you do one or more option trades per quarter.

What do you guys use?

 

[cuttlefish]

I've been using Protrader 1. I've downloaded protrader 2 on my home PC but have found a few limitations and haven't used it to trade so far (still using protrader 1 to trade). I'm not convinced that the protrader 1 options spread/depth data is always real time, sometimes I seem to notice delays, not sure how it is in protrader 2.

But overall its a good platform to be getting for free. Protrader 2 has the theoretical pricing tool in it which is pretty handy (even though there's free ones about anyway). But i've found a lot of things that annoy me about protrader 2 as well. The good thing is you can have both of them installed and use whichever is appropriate at the time.

 

[swingstar]

Thanks for that. That's a worry regarding depth, but I'll check that out against my E*TRADE account when I trial it.

 

[NettAssets]

Have you heard anything new about a launch date for E-Trades new platform SwingStar

 

[swingstar]

Yeah I know about their new website. They have two trading platforms but they don't look as solid as PT.

 

[NettAssets]

The new site isn't supporting options yet.
I haven't used PT2 but the mock up of etrades platform looks a bit like what I have gathered of pt2
Put your strategy in and it builds risk graphs and all the fancy stuff.
Hope its better than the phone although their phone service is pretty darn good.

 

[sails]

Swingstar, I use both OptionsXpress and Morrisons Securities for trading options. Pros and cons with both, so it really depends on what you need, how you trade, how often you trade, etc to get the best to suit individual needs.

NettAssets, I have an idle options account with Etrade, so really interested if they come up with a useful trading platform - but they would need to be more competitive with their fees than they are now!

 

[swingstar]

Just a question regarding PT2, does it have intraday data/charts?

 

[cuttlefish]

Protrader 2 for stocks has live intraday charts, live course of sales, live market depth.

with options they have live course of sales, live spread and depth. (though sometimes for the options I think there might be delays).

 

[bullspread]

Hi Swingstar

Take a look at OptionsXpress for online option trading. Their commissions are very reasonable and if you were to get exercised (not sure what startegy you use), you only pay a fixed stock brokerage fee, as opposed to most other brokers who will charge you a percentage. I have used protrader however it is limited in the strategies that can be implemented with it such as credit/debit spreads.

I use Metastock for all my charting and download all my data from academyofwealth.com.au. I used to pay for data in the past but found the costs were always going up. There are several free data providers but I found this place to be reliable.

Cheers
BullSpread

 

[sails]

Bullspread, I've been finding OptionsXpress very slow going lately. Seems like just buying puts or calls now has to be processed manually. I can understand that spread (combo) orders need this, but in the past it would appear that my orders would go straight through for long options.

This is particularly frustrating around closing time when they seem to take forever just to get the order into the system. Have you (or anyone else) had similar problems?

Apart from this, I agree with your coments that they are great on price and understand that flat fees for assignments are essential for option spread traders. However, their website is painfully slow (compared to WebIress) and very messy trying to get option chains into initial order forms.

Thanks for the website for free EOD data - currently using Yahoo but they have their pros and cons!

 

[cuttlefish]

In relation to the protrader platform I got an email in response to a question saying:

"Each Option order is placed manually by our dealers and usually goes on the market quite quickly. However, it is possible at times for there to be a delay of upto a few minutes."

So do other brokers have straight through connections to the options trading systems, or is this just a limitation of the backend systems used for options tradings and so a common situation regardless of which broker you use?

What screen do the market makers have sitting in front of them? I'm assuming most of what they do is fully automated.

 

[sails]

Cuttlefish, Morrisons use WebIress for online trading and it has straight through processing for opening and closing long options and it's almost instantaneous - just like trading shares.

The problem is that if you want to write an option, it requires a phone call and is charged at phone rates which ends up being double the cost of the same order at OptionsXpress. WebIress has no facility to handle combo (spread) orders. So I use both brokers for different types of trading.

I guess other brokers using the WebIress platform would also have the same straight through processing available for long options.

 

[omad]

I'm thinking about opening an account with OptionsXpress, are the volatility charting tools available for the Australian market?

Thanks.

 

[sails]

Omad, only very basic info for Aussie options on OptionsXpress. Their volatility charts, intraday charts, etc only work on the US. The charts they provide for the Aus market is a simple bar chart with a 21 day MA and volume.

I did hear from one of their reps at a trade expo recently that they were planning to provide WebIress for the Aussie market, however when I emailed them they said this was not planned.

IMO, the biggest advantage with OX is the fees (depending on quantity as their fees are based per contract rather than on a dollar value) and the ability to place 2 legged combo orders on line.

 

[omad]

Thanks Sails, I am trying to decide which online broker to use and the tools on the OX website look great, shame they are not available for the OZ market.

How do you find WebIress, does it have all the tools you need? Combined with Hoadleys is it pretty much all you need for the OZ market?

One more question regarding WebIress, in the option monitor screen there is a volatility reading at the last column, is that the IV for that particular option?

Thanks again!

 

[sails]

Thanks Sails, I am trying to decide which online broker to use and the tools on the OX website look great, shame they are not available for the OZ market.

How do you find WebIress, does it have all the tools you need? Combined with Hoadleys is it pretty much all you need for the OZ market?

One more question regarding WebIress, in the option monitor screen there is a volatility reading at the last column, is that the IV for that particular option?

Thanks again!

Yes, I mainly use WebIress and Hoadley. I also thought that the tools at OX would be available for the Aus market, and was disappointed to find out it after joining and getting access to the site that it was not so.

Apart from daily charts, everything in WebIress updates dynamically. IV charts are available on daily/weekly/monthly timeframes. I like the easy access to all option (and warrant) chains and the drag and drop ability (which OX doesn't have!).

When placing trades, I use live market depth for the relevant option/s so I can see exactly what the bids and offers are doing, what prices are being traded, etc. Market Depth has a "detail" button to view level 2 market depth which used to be dynamic, but the ASX changed the rules some time ago. Option and warrant codes can also be put into live watchlists so it's easy to keep an eye on those of special interest.

Re the last volumn "volty" - the help file in WebIress states it is "the historical volatility of the underlying stock" - but I don't think that is correct as the amount is different for each monthly series and differs for puts and calls. I think it is most likely the IV for each monthly series, which is how I have been using it. Will make some enquiries...

I had WebIress when I first started trading options, so it's indispensable now, particularly as I do a lot of shorter term trading with options. Not recommending it as you may find you don't need these features for your style of trading.

Hope this helps!

 

[omad]

Yes, it helps heaps. Thanks for the detailed reply. I've got a quick question regarding Morrison Securities, on there website they say that WebIress is free if you do more then 10 trades a month, if I buy a call or put and then sell it, is that classed as one trade or two?

Also with WebIress, they have an option evaluation screen, do you use this or do you stick with Hoadleys? If you do how do you find it?

Sorry for all the questions, its good to actually be able to talk to someone who uses both brokers to way up the pros and cons. I think eventually I will open an account with both as the ability to do spreads on line is a desirable feature. My trading style is mainly short term calls and puts but depending on volatility can involve longer term spreads.

Thanks again.

 

[sails]

Yes, it helps heaps. Thanks for the detailed reply. I've got a quick question regarding Morrison Securities, on there website they say that WebIress is free if you do more then 10 trades a month, if I buy a call or put and then sell it, is that classed as one trade or two?

That is charged and classed as two trades. One thing Morrisons don't spell out on their website is that you have to phone in any written option orders (sell to open's) which is charged at a higher price than trading online. If you decide to place a spread order with them over the phone, both legs of the trade are charged at phone rates. Also exercise fees on the underlying share are percentage based which can add considerable expense compared to OX.

Also with WebIress, they have an option evaluation screen, do you use this or do you stick with Hoadleys? If you do how do you find it?

Sorry, forgot to mention that in the last post - and yes, I do use it. It hasn't always been reliable when the underlying share is going ex-dividend, so I check that the "value" in the top left hand corner is very close to the live MM's bid/ask prices found in market depth - then I feel it is fairly safe to use, but go back to Hoadley if it looks a bit doubtful.

I like the option valuation window for a quick overview of the greeks for that individual option and the values in the middle section can also be modified to get an idea of what may happen to that option under different conditions. Suggest you check out the help files for more info (just type "configuring option valuation" under the search tab).

It is useful when planning to trade just a long call or put - also if deciding whether to spread or not as you can just quickly subtract the deltas to get an idea of the net deltas in the spread. I still use Hoadley extensively for strategies, but there is use for both these tools.

You can double click on a code in the options monitor and it automatically brings up the evaluation window which is a nice feature.

Sorry for all the questions, its good to actually be able to talk to someone who uses both brokers to way up the pros and cons. I think eventually I will open an account with both as the ability to do spreads on line is a desirable feature. My trading style is mainly short term calls and puts but depending on volatility can involve longer term spreads.

I do all my spread trading in OX for these reasons, and in fact, now that Morrisons have increased the number of trades to 10 per month to get Iress free, it's just about cheaper to pay the fee for WebIress as I get the frequent traders discount with OX.

OX is not perfect either I've had all sorts of hiccoughs with the frequent traders discount. Also their website can sometimes be painfully slow and option codes have to be typed in manually for new orders. (Once the order is done, then that code doesn't need to be entered again and it is real easy to roll, close, etc)

One thing that really annoys me is being referred to a "manual DTR" when it is just a single option trade which is close to the money with plenty of market depth - and then it can take so long just to get the order to the market. Seems to happen more often near closing time. Frustrating if one is trying to take a bid or offer that has popped up near the mid price - this is one time I will use WebIress to do the deal instead of OX.

Just my

 

[omad]

Sorry to bug you again sails, I have been going through the WebIress help(after I eventually realized I needed to turn off pop-up blocking ) and couldn't find out if you can chart historical volatility. Is this possible with WI?