Now that the new OptionsHouse trading platform has been out for a few months, we’d like to spend some time talking about some of the new features.

And what better place to focus on than the place where the magic happens: the order ticket.

There are three new features that we believe will make it easier for customers to get the information they need to place the right trades at the right time.

Spread Market Bar

If you trade spreads, it’s important to know what the market is for each individual leg, but it’s even more important to know what the bid and the ask are for your spread as a whole.

That’s what the new spread market bar is for. Continue Reading

The much-ballyhooed Apple Worldwide Developers Conference was held Monday, and Steve Jobs was there in his ever-present turtleneck to offer the keynote address.  As expected, among the product team’s major announcements was a new operating System – OS X Lion – and the iCloud service that will sync a user’s personal information (email, contracts, calendars, iBooks, song purchases, and more) among Apple devices and the web. Example – buy a song on your iPad and it will be available to download on your iPhone without having to plug anything in.

This week, however, Apple shares have dropped 3% in a solid demonstration of “buy the rumor, sell the news.”  In the two weeks leading up to this meeting, the stock rose roughly 4% and has sharply backpedaled beginning in early-afternoon trading on Monday.

Perhaps investors were hoping for an iPhone 5 announcement or were underwhelmed by the unveilings they did hear. Either way, the reaction is making Apple investors wince, at least for a little while. Continue Reading

We’ve recently fielded customer questions relating to a very specific – but not uncommon – situation.  Let’s imagine you want to buy a new stock for your portfolio.  At the same time you place the buy order, you’d like to set up sell orders to exit the trade if a target is reached (to the upside – yay!) or a stop-loss price is hit (to the downside – meh).

Maybe you want to close the position if the stock price gains 10% or sell out of the position if it drops 10%.  Of course these target and stop levels are up to you to determine and depend upon your personal investment goals and risk tolerance. In the hypothetical example below, we will set a target and a stop of 10%.

This is optimal money management, right? Establish targets and stops from the outset and respect these levels? But how can you physically place this kind of order in one fell swoop?  With an OTOCO, which stands for Order Triggers an Order-Cancels-Order.  Yes, that’s a bit of a mouthful.  But this type of order can be used in the situation described above to place a stock order with predetermined levels for both a target and a stop-out point. Continue Reading

Today we’re excited to announce another set of new enhancements to the OptionsHouse trading platform. The goal of these enhancements is to clarify some things and to make important information easier for our customers to access.

Omnipresent Buy/Sell Buttons and Net Delta

It’s a mouthful—I know. But the subtle changes we’ve made to the universal quote line at the top of the platform go a long way.

There are now two small buttons (one to buy and one to sell) that allow customers to place stock trades without having to go through the action menu that comes up after clicking on the blue price number.

Also available in the quote line is a quick look at your Net Delta.  This allows traders to immediately view their equivalent share exposure in the populated symbol.

Account Number Visibility

Your account number is important—it’s the fastest way for our customer-service department to identify you and your account and help you with any issues you may be having. Continue Reading

Since the new OptionsHouse trading platform debuted on March 8, we have received lots of great feedback from our customers.  These emails and phone calls – hundreds of them – have been invaluable.  They’ve alerted us to bugs, provided thoughtful suggestions, and given us a new way of looking at parts of the platform.

Speaking of a new way of looking at things, we’re excited to announce that we have responded to the most frequent feedback item – the look of the platform. Many of you missed the “day” mode (or the white background) of our standard platform and some of you also struggled with the small default font size on the new platform. Continue Reading

The IRS deadline for 2010 IRA contributions is April 18, 2011 (this Monday). In order to make a contribution to your 2010 OptionsHouse IRA, your IRA account must be opened and funded by the specific deadlines below.

Deadline for Opening Your IRA Account:

Submit your completed and signed online account application, IRA Simplifier, and any additional required documentation to OptionsHouse by 3:00 p.m. Central Time on Friday, April 15, 2011.

Download the appropriate IRA Simplifier:

Traditional and SEP IRA Simplifier

Roth IRA Simplifier

EDU IRA Simplifier

Deadlines for Funding Your IRA Account:

To ensure that your 2010 IRA contributions are posted on time, you must fund your account by the following deadlines. When funding your account, you must also provide a completed IRA Deposit Slip.

ACH–

You must have established an ACH relationship with proper instructions on the contribution type and have initiated the ACH transaction no later than 3:00 p.m. Central Time, April 15, 2011.

WIRE–

OptionsHouse must receive your wire transaction no later than 11:00 a.m. Central Time, April 18, 2011.

Check–

Your check to OptionsHouse must be postmarked no later than April 18, 2011.

Cash Journal (transferring funds between OptionsHouse accounts)–

If transferring funds from an OptionsHouse account to an IRA account, we must receive your Cash or Securities Transfer Form no later than 3:00 p.m. Central Time, April 15, 2011.

In order to open and fund your IRA, you must provide the appropriate account documentation and funding information by the deadlines listed above. Any IRA account with documentation or funding received after these deadlines will be completed on a best-efforts basis.

If you have any questions about making a 2010 IRA contribution, contact OptionsHouse Customer Service by calling (877) 653 2500 (option 2), sending an email, or logging in to live chat.

OptionsHouse released the first generation of its iPhone app early last month (see this blog entry for all the details).  After listening to your initial feedback through email and during last week’s iPhone webinar, we have released the first update – Version 1.2 – now available in the iTunes store.

This second build has added a lot of what customers have been requesting. Some of the improvements include:

-Swipe gestures: With a swipe of the finger, toggle between option-chain fields such as bid/ask, open interest/volume, delta/gamma, and more.  You can also now swipe to cycle through charts or to quickly delete a leg from your order ticket. Continue Reading

About 18 months ago – On October 20, 2009, to be specific – I posed the question, “Is it Time to Re-Weight the Nasdaq 100?”* At that time, Apple (NASDAQ:AAPL) shares had a 15.6% weighting in the 100-stock index (and by default, the Nasdaq-100 Trust).

At the time, I noted:

“…the relative outperformance of Apple (AAPL) shares in the past six years has created a situation that may be a call to action by the owner of the index, Standard & Poor’s, to re-weight Apple shares in the index as Apple has now become the 1000-pound gorilla … S&P may see the need to reduce the Apple weighting in the NDX and the related exchange traded fund … to equalize the components. If this happens, indexers will be forced to lighten the number of shares they hold in Apple stock. So in essence, Apple could theoretically be penalized for its own success.”

In the ensuing 18 months – as Apple’s stock price rose from $200 to around $340 – its weighting in the index grew as well, moving to 20.5%. While the iPhone parent’s market cap has swelled to twice that of Google (NASDAQ:GOOG), its weighing in the NDX is now five times as great. Continue Reading

Well, March was an eventful month.  We had the world’s third-biggest economy suffer a massive earthquake and tsunami followed by an ongoing nuclear emergency.  If that was not enough, the massive unrest in the Middle East has continued to spread.  NATO is bombing the Libyan Army currently.

Finally, the problem children of Europe are seeing the CDS on their debt spike to new highs.  We got an initial sell-off, but since Japan has seemed to stabilize, the SPDR S&P 500 ETF (SPY) is now higher than it was on March 11 – the day of the earthquake, and within spitting distance of its February highs.  Likewise, after a quick spike in the CBOE Market Volatility Index (VIX), we are now back to a VIX reading around 18. Continue Reading

Many traders think of calendar spreads (or time spreads) as “theta plays,” or strategies benefiting from the passage of time. This idea is an oversimplification at best. Time spreads are complex option trading strategies involving several independent influences on an option’s price including time, implied volatility, and direction.

While these spreads have a lot going on, the ultimate success or failure of time spreads is a function of the relationship of the underlying stock price to the strike price at the expiration of the short-term option. Time spreads are trading strategies that can offer an interesting alternative to a more traditional directional play.  Let’s look at an example of one of these relatively advanced option trading strategies. Note that the tickers used are for the purpose of illustration only and do not constitute trading recommendations.  Prices are hypothetical. Continue Reading