glad to have found AFB—what options platform do you use and why?

  • Posted: 19 January 2011 03:16 AM

    hi there

    i’m new here, and just wanted to introduce myself.

    i dabbled in aapl options in 2007-2008 and sadly lost a fortune.

    i chalk that up to many reasons.  i was impatient and greedy, and worse—not knowledgable in the mechanisms of how to really offset my risk.

    in the end it was the masacre of october 2008 and i was doing naked long calls and i stood there like a deer in headlight frozen unable to initiate any call sell.

    even prior to that i was doing crazy things—- i think you call me a “gunslinger” here grin.  long calls often in the front month and often right up to options expiry.  i didn’t understand about IV and learned the hard way about volatility crush at OE, etc..

    well i think i was a bit insane lol.

    i am glad that this board exists and only wish i had found it earlier and had people to bounce my foolish ideas off of back then

    i wish i knew about it back then.  i was reading bullishcross blog in 2007 and just didn’t realize this was the mothership of sorts of all the blogger analysts.  shocked to have just realized this last month.

    i’ve got a lot of questions for people here, i am thinking a good place to start is what trading platform do you like and why?

    i had been trading using Interactive Broker’s java applet on OS X.  I liked IB because the comissions were dirt cheap, and the fact that they ran on a Mac.

    I also liked its live Option Chain screen, and its kind of hidden Volatility curve screens.

    What I didn’t like was that it was in Java and so the menus were not standard and kind of clunky and things were very buried.  The sheer power and complexity of IB was staggering.  I only scratched the surface of what IB could do, only buying Calls to open and selling them to close.  I never figured out the UI for an option trade with more than one leg, I think they called it a Basket maybe, but I never got around to trying it, and I was/am no expert in multi leg trades.
    In my opinion, IB is clearly geared to experts and I think their lower comission is evidence of that.

    Also, the fact that IB had an API and tons of different front ends was very interesting.  I think i tried one called ButtonTrader or NinjaTrader, can’t remember.  It was all just slightly too much for me and I went back to the IB java interface.

    Later I found Think or Swim—this program seemed much more tuned to a beginner.  Frankly, I was astonished to find such a highly polished app existing on the mac.  I never got around to funding that account, but the sexiness of the app was compelling.  I felt like i could truly begin to learn about the different types of protective option plays by using their software.  I also appreciated the ShadowTrader audio feed, I would actually keep that feed up while I was trading in IB.

    What I didn’t like about Think or Swim was the very large comissions relative to IB.  However what I am starting to think—and I’d like to get some opinions of this—is that maybe that is the price to pay for both a) the learning opportunity that ToS might provide b) the ability to execute multi-leg option trades efficiently.

    Don’t get me wrong, i have a distinct feeling that IB could do all this.  In fact, IB had a complex keyboard binding system designed to allow commands to be efficiently executed.  Its just that with IB, I always felt a bit over my head, in the sense that I knew I was only tapping 1% of the IB feature set, yet I didn’t know how to go about gaining mastery of the other 99%.

    Also I should mention that I dabbled in Investor R/T Mac, because it was Mac based.

    I found it interesting, but clunky in the sense it was all old carbon? code and GUI from the mac classic days.  it was also exceedingly complex, just like IB. 

    And it was expensive, I recall having to essentially lease the software monthly, and pay for a datafeed access separately.

    What was really neat about Investor R/T Mac was you could design a custom graph for anything you could dream up, with dozens of custom variables and all the techinal indicators you could imagine or invent.

    That was part of the essence of the problem you see—because I was/am a newbie, I wanted some pre-canned technical screens.  Something I could just turn on, with a set of common indicators that everyone else uses. 

    Perhaps, something like TradeStation on the PC.  TradeStation was interesting to me in the sense that they have a custom programming language,  with a large library of shared user invented indicators.  Something to jumpstart me and get me in the swing of things.

    I don’t think Think or Swim has that type of custom language or shared library, but even so, perhaps they were closer to what i was looking for now. 

    Also I should mention i even tried some PC apps under emulation.  One i used for a little while which I did like was called MedVed’s Quotetracker.  It had API access to IB, but I never trusted it for that, and just used it for its data.

    OK, well thats the small version of my story, and seeing how you got this far, if you’d care to share any thoughts, love to hear them.

         
  • Posted: 19 January 2011 04:03 AM #1

    Welcome to AFB. You sound to better qualified than most to evaluate trading platforms.  And it sounds as though you want to sit in front of a screen day trading and making enormous profits.

    I’m no expert on this, but here’s my take on what you’ve said. Most people seem to settle for TOS (Thinkorswim) as the best options trading platform. As regards commissions, TOS used to be very flexible in negotiating a commission structure. I don’t know if that’s changed since. In particular they used to match your previous broker if you wanted.

    Your post seems to indicate an emotional element to your trading. My advice is- get your excitement somewhere else, and treat your trading as a purely intellectual activity. That’s easy advice to give, but very hard to follow (for me too).

    One of my reasons for using options is that it lets the market makers do the fast trades for me.

         
  • Posted: 19 January 2011 04:36 AM #2

    sleepygeek - 19 January 2011 08:03 AM

    Welcome to AFB. You sound to better qualified than most to evaluate trading platforms.  And it sounds as though you want to sit in front of a screen day trading and making enormous profits.

    I’m no expert on this, but here’s my take on what you’ve said. Most people seem to settle for TOS (Thinkorswim) as the best options trading platform. As regards commissions, TOS used to be very flexible in negotiating a commission structure. I don’t know if that’s changed since. In particular they used to match your previous broker if you wanted.

    Your post seems to indicate an emotional element to your trading. My advice is- get your excitement somewhere else, and treat your trading as a purely intellectual activity. That’s easy advice to give, but very hard to follow (for me too).

    One of my reasons for using options is that it lets the market makers do the fast trades for me.

    I use OptionsXpress because it is so easy to use.  That said I can set up some pretty sophisticated strategies without a lot of hassle.

    I don’t use any of the “tools” because I think they are geared towards high volume traders that rely more on technicals than fundamentals.  I’m a fundamentals guy through and through.

    Starting with $500 in 2004, my account now generates profits in the 7 figures annually.  I get get rates on my commissions, but would never choose a broker because of that.  The commissions are peanuts compared to what you can make being smart.

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  • Posted: 19 January 2011 04:52 AM #3

    If you’re worried about commissions, you should not be trading options. That’s the least of your worries.

    I opened my TD Ameritrade account about the same time you got wiped out… end of sept, 2008.

         
  • Posted: 21 January 2011 12:51 AM #4

    sleepygeek - 19 January 2011 08:03 AM

    Welcome to AFB. You sound to better qualified than most to evaluate trading platforms.  And it sounds as though you want to sit in front of a screen day trading and making enormous profits.

    I’m no expert on this, but here’s my take on what you’ve said. Most people seem to settle for TOS (Thinkorswim) as the best options trading platform. As regards commissions, TOS used to be very flexible in negotiating a commission structure. I don’t know if that’s changed since. In particular they used to match your previous broker if you wanted.

    Your post seems to indicate an emotional element to your trading. My advice is- get your excitement somewhere else, and treat your trading as a purely intellectual activity. That’s easy advice to give, but very hard to follow (for me too).

    One of my reasons for using options is that it lets the market makers do the fast trades for me.


    your response is quite perceptive and i thank you for your honesty.

    i did spent 2008 staring at the trading screen day trading, and the day trading part is not something i’d like to repeat.  i was a terrible price to pay physically, and emotional, it was far too stressful.

    looking back i believe i fell into the classic day trading trap of boredom and mistakenly feeling i had to be in the market.  you are right, a large part of me wanting the emotional roller coaster despite the stress it was causing.  i do not want to repeat that.

    i hope to learn from the other AFB members, the *discipline* required to trade without emotion.  the ability to decide and lock in in entrances and exits ahead of time, and to know how i will react in each situation.

    i hope to be able to learn how to do this in such a way that i can set up my trades at night, and over the weekend, so that i could hold my attention elsewhere during the work week and not feel the need to modify my trade due to current market conditions.  there should be no unexpected conditions.  that is how i want to learn to trade to the market.

    regarding TOS, that is what i wanted to know, if there was a group consensus as to trading platform.  being in the majority and being able to ask questions as to how best use the software is far more important to me that commission prices.  especially since i plant to stop day trading per se, only executing my vision at nights. 

    when you say one of the reasons you use options is because it lets the MMs make fast trades for you—do you essentially mean that you are entering multi-leg trades in advance, and then let things run their course?

    one of the things i’d really like to study in more detail are the different options types, to become fluent enough that i will know the proper type of option play to encode my vision of the market.

    thank you much for the welcome.

         
  • Posted: 21 January 2011 01:46 AM #5

    Gregg Thurman - 19 January 2011 08:36 AM

    I use OptionsXpress because it is so easy to use.  That said I can set up some pretty sophisticated strategies without a lot of hassle.

    I don’t use any of the “tools” because I think they are geared towards high volume traders that rely more on technicals than fundamentals.  I’m a fundamentals guy through and through.

    Starting with $500 in 2004, my account now generates profits in the 7 figures annually.  I get get rates on my commissions, but would never choose a broker because of that.  The commissions are peanuts compared to what you can make being smart.

    Thank you gregg.    i have heard of optionsXpress and wondered if people liked it.  i assume that is all web based?  do you have any experience with ToS also?

    it would be nice to hear a comparison if there is anyone here who has used both.  I wonder if people would also categorize ToS as “so easy to use”?

    I was impressed with ToS’s GUI although perhaps it was overkill.  i was also impressed that sleepygeek thought most AFB’ers used it.  i would imagine it could be nice to sometimes be in the majority.  i’ve been a deep apple fan and product owner since the apple ][ now for…wow… 27 years.  being in the majority is not something us apple fans are used to.

    i’ll keep an open mind and am interested to know if there are any compelling features one product has over the other.

    congratulations on an incredibly impressive run from $500 to 7 figures in 7 years.  i am humbled by that and will keep an eye out for your options strategy posts should/when you share them. 

    do you have a sense of roughly how many trades you’ve executed over the years to get to this point?  and would you care to give a general sense of what your trading style is? say, for example, has your styl mainly involved covered options or protective trades or have you done this the naked risky way?

    also, i see there is a massive option trading strategy thread on AFB.  i do not know the etiquette here, if it is best to keep those types of options questions in that thread.

    cheers…

         
  • Posted: 21 January 2011 01:52 AM #6

    bick - 19 January 2011 08:52 AM

    If you’re worried about commissions, you should not be trading options. That’s the least of your worries.

    I opened my TD Ameritrade account about the same time you got wiped out… end of sept, 2008.

    bick yes, thanks for your reply and i agree with you, at least for non daytraders or scalpers, people who are making 10 to 500 trades / day might still want the lowest commissions they can achieve.

    but i no longer want to day trade, so commissions are as you say the least of my worries now.

    i see TD now owns ToS, so are you and all other TD users now using ToS for trading or is there an older TD options platform left in place?

         
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    Posted: 21 January 2011 03:08 AM #7

    Gregg Thurman - 19 January 2011 08:36 AM

    Starting with $500 in 2004, my account now generates profits in the 7 figures annually.  I get get rates on my commissions, but would never choose a broker because of that.  The commissions are peanuts compared to what you can make being smart.

    OK, I’ll bite. What comprises the bulk of your trading, AAPL options? Call spreads? Near or LEAPS?

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