Saturday, June 8, 2013

Optionshouse...its not just for option trading

Optionshouse is a good low commission online stock trading broker

I am by no means an experienced trader, but I am sure glad that I chose to get me started and even though the company is called optionshouse, it is an excellent stock trading platform.  I've made good use of their very inexpensive $3.95 commission per stock trade.  Let me give you a little run down of how things work if you wanted to start getting involved in trading stocks with  I had some tax return money that I wanted to invest, and initially I was very skeptical because they charged very cheap rates compared to other online brokers like sharebuilder, fidelity, scottrade, tradeking, etrade, thinkorswim, zecco, etc...

First of all, I hope that you use one of my referral links to sign up if that is what you decide to do, and I will give you a $50 bonus (updated 05/18/2013): 
After you click on the link (remeber which one 1-8), then you click on GET STARTED NOW to set up your virtual and/or real account.  I get $150 after 60 days if you use my referral link and start an account with at least $1,000 for a cash account, $2,000 for a margin account, or $5,000 if you want to get 100 commission free trades (that expire within 60 days of account  funding) using the promotion code FREE100.  There are also other promotions available, but you can only use one of them with one of my referral links (  Once you sign up you can share your referral link to get $150 or 30 free trades when referring friends.  To give you more incentive to open an account through one of my links (since you could use the promotion code without using one of my referral links), I will send you $50 after the 60 days through paypal (if you have a paypal account).  Just send me an email (djvpuls at gmail . com with no spaces and using the @ sign) with a note of when you used the link, the date you funded (or will fund) your account, and your paypal account email (to send you your payment).  Then I will send you the $50 when I receive it from optionshouse.  That is a 5% profit for just opening an account with $1000 and letting it sit there (of course you could win or lose some of it playing it in the stock market).  For complete terms of the optionshouse referral offer see:

Initial signing up experience
After you click on the link, setup a user name, put in your confidential information (notice that the site is in https and 128-bit encrypted), enter in your promotion code (FREE100), and agree to the risks of trading stock, you'll be asked how you would like to fund the account.  I chose to do an ACH (Automated Clearing House) deposit which is free and takes at least three business days after your account has been verified.  I don't know if something went wrong or not when I signed up, but my ACH deposit did not get requested until after I requested it through the optionshouse platform.  The platform itself is fun and looks like this:
When you click on the Manage Account blue button at the bottom of the platform a new windows will appear in the platform that will have a Transfer Funds tab at the top.  There you can set up an ACH linked account and transfer funds into your optionshouse account.

I got my 100 free trades, and I had a little over 60 days to use them too.  I opened up a cash account to start with since I was new to the game, but I soon realized that a margin account is the way to go.  The main reason I switched (just had to sign an extra form to do the switch) was that I wanted to short stock.  Yes, will let you short stock after you contact them and answer some questions about your assets and trading experience (they want to make sure that you have money to cover any "day trading margin call" that you might encounter).  Being able to short stock is a big bonus (especially in a bear market).  Every stock has to go down sometime and you can make money off of a falling stock by short selling it.

Stock trading experience
I quickly learned that with a cash account you sometimes have to wait three days for the stock that you sold to clear before buying more stock.  This was a hassle and another reason to change to a margin account.  With a margin account the money is available to trade even on the same day, buy you have to be sure not to exceed your "starting day trade buying power" (which is listed on the platform).  This means that you can't buy and sell a stock on the same day for a price that is over your starting day trade BP, if you do then you will be issued a margin call and will have to deposit some money into your account to cover the difference (I had to do this once).  Additionally, you can only day trade 3 times in 5 business days before your account is labeled as a patterned day trader.  Patterned day traders have to have $25k in their account to continue as a day trader, so watch out for that (they tell you how many day trades you've made before you confirm a trade).  You can also call them and have your account reset once every 90 days.

So here is one strategy that I have used to being almost a day trader.  You can purchase a stock position or two that is above $5.  The margin requirement (how much you can buy using borrowed money) is from 25-40% for stock above $5, and this allows you to make more money.  It is a good idea to buy stocks greater than $5 anyway since they are often more stable and predictable.  I lost quite a bit trying to trade stocks lower the $5 per share.  FYI stocks lower than $2 have an extra charge with them, but all stock trades are commission free for 60 days if you use the FREE100 promotion code.  In making your decision on a stock purchase you'll have to predict the best you can what the stock will do over at least a day.  For example, the image above shows that I short sold some ACOM stock.  The stock dropped during extended hours trading, and then it spiked when the market opened (see image).  I knew it was going to drop again due to a bad quarter financial report and future outlook, so I shorted the stock close to its peak (don't beat yourself up over not selling or buy right at the peak and valleys or you'll go mad) and then it dropped considerably.

I like to use for stock charts
If the stock went up again during the same day, I wouldn't have been able to liquidate my position since that would have exceeded my starting day trade BP (otherwise I would receive a day trading margin call).  Luckily the stock stayed substantially down until the beginning of the next day where I made a 1,000+ profit in one day with about 8k of my money invested (the rest was borrowed/on margin).  These type of trades don't happen all the time, but if you watch a few stocks for awhile, you'll know when to buy or short sell them to make a profit.  Don't just buy a stock because you have stock buying power, wait for the right time when you'll be sure to make a profit.  At first I had this disease; I always had to have a stock position, if I had buying power.  I've found that the stocks tend to make steady declines and sudden inclines, so the declines are more predictable.

Stock trading experience 2
There are good days and bad day in the stock trading days, but hang in there and keep at it.  You'll eventually win everything back.  For example, I just this year my account was up to 19k and then I got cocky and took too many risks and my account droped down to 8k and now it is back up to 16k.  Some of what got my balance back up quite quickly was the netflix (NASDAQ:NFLX) first quarter report on 04/22/2013.  I'm still learning the sways of the stock market, no one can predict them all, but when there is a clear trend jump on fast, wait a day and set some stop orders to limit you from losing money that you have gained.  I'm still a short term trader.  I usually don't hold a stock for more than a month, and if the stock is going down steadily, I sell as soon as I can without being labeled as a day trader since it only costs $3.95 per trade.  If you think you know where the market is going, the long term trader would probably do better than me and not worry as much. benefits
Optionshouse great features for an online stock broker:
  • All the stock orders you'd ever want to make: market orders, stop orders, stop loss orders, limit orders, extended hours orders, orders triggered by a stock price or a date and time, market on open (MOO), market on close (MOC), limit on open (LOO),and limit on close (LOC) orders, 
    • Then there are advanced orders: order cancels order (OCO), order triggers order (OTO), order triggers an order cancels order (OTOCO), and order triggers two orders (OTT).  These different orders allow you to have full control over when you buy or sell your stock even when your not around intently watching stock prices.
    • Order are placed instantly: I have never noticed any lag time.
    • Your order (be it complicated or simple) is expressed in words for you to confirm it before it is placed.
    • You account can be qualified for short selling as well.
  • They have great prices: You only have to pay optionshouse when you make an order ($3.95) and to borrow money (their margin rate is standard).  $3.95 is cheaper than sharebuilder's price to make automatic investments every Tuesday at whatever the market price is then.  I tried sharebuilder as an online broker first and it pales to optionshouse prices.
  • They have good research assets: See specific information about your stock in a snapshot, or see it's technical analysis, analyst opinions, financials, or insider stock trading.
  • The optionshouse platform has watch lists, and it has stock alerts that will email you when a stock hits a certain price.

I haven't listed everything that is available in the optionshouse platform, but the main thing for me as a frequent trader (about 4/day) is the cheap $3.95 commission price.  I recommend setting up a free virtual account so you can play with the optionshouse platform and pratice making some money in the market before putting your own money at risk.

Get involved in stock trading for your future.  You should try optionshouse as a good online broker, but don't take my word for it.  Here are some other sites that give you a review of optionshouse:

Don't forget to use one of my referral links above to sign up and get an extra $50 if that is what you decide to do.

My terms:  If I never receive your referral credit from optionshouse, then I will not send you $50.  You really only have my word that I'll send you the money, but you're not out of any money if you use one of my links anyway, and I only have optionshouse's word that they'll give me money for referring you to optionshouse.  Send me an email with a copy of the referral link you use will get the $50.  Oh and if you argue for more money from me for using my link, you might get it since you read the end of my blog, but the full amount I get is reported as interest income, and I have to pay taxes on it.

If you're not to avid of a stock trader then you might check out sharebuilder where you can get a $50 bonus.  If  you're just interested in make a couple extra dollars before you open the sharebuilder account see where you can make $25 + $50 + $50.

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