First Post on BrokerSense.com

I just wanted to let the readers of this blog know that I made my first post on BrokerSense.com, my new blog focused on online brokers. Entitled Barron’s Takes on Optionetics, I discussed this weekend’s Barron’s story on OptionsXpress’ Optionetics educational division. Barron’s thinks it’s a red flag for the stock, but I feel otherwise.

I’m designing BrokerSense as a portal to help investors and traders pick out the right broker for them. With dozens of brokers boasting hundreds or even thousands of features, it’s a pretty tough task for people to differentiate one from the next - especially beginners. I have a number of research projects underway that will streamline the process.

BrokerSense is fairly bare-bones at the moment, but I’ll be building it out bit-by-bit every day, adding blog posts, industry data, and broker comparisons. And if you’re a blogger/webmaster, I would greatly appreciate links to BrokerSense.com.

full disclosure: I am long OptionsXpress (OXPS) and I bought more this morning.

Jim Cramer’s Getting Back to Even

Just caught this - my old boss Jim Cramer is releasing a new book entitled Jim Cramer's Getting Back to Even. Here is an excerpt from Amazon.com’s (AMZN) description;

In his new book, Cramer offers the most detailed guidance he has ever given on how to invest in a changed market. Savvy investors will not just survive; they will thrive. Cramer begins with six rules for protecting the money you have and making sure that you have the money you need. (Rule Number 3: Skip the first four stages of portfolio grief: denial, anger, bargaining, and depression.) Your portfolio won't fix itself; you have to do that. It's easy to close your eyes and pretend that it all never happened, but you'll never get back to even that way, much less profit from the opportunities that this new market offers to investors who know where to put their money. One key to making investment decisions is to watch what the mutual-fund managers are doing and -- better yet -- to anticipate their moves. Cramer tells you how to do this. Their decisions will move markets, and you want to profit from these moves.

When I started out at TheStreet.com (TSCM), one of the first things I did was read Jim’s autobiography, Confessions of a Street Addict. It is by far and away one of the best Wall Street books of all time – particularly when Jim discussed volatile years like 1991 and 1998. And unlike many hedge fund superstars, Jim isn’t afraid to show his dark side. Best of all – you can pick it up for just a few bucks on Amazon.

I’m eager to see how Jim’s insights on how to navigate the post-crash market, and whether his current bullish view of the economy /stock market is reflected in the book.

To read more about the book: Jim Cramer's Getting Back to Even

Amazon.com and HSBC Not Playing Together Nicely

Just an FYI if you’re a fellow HSBC (HBC) customer shopping at Amazon.com (AMZN):

According to HSBC customer service, the bank has a glitch in their system that is making it reject transactions made at Amazon.com. My Mastercard debit card was turned down for a few small purchases today, resulting in vivid fantasies of my identity being hijacked, along with my life savings. I was worried I’d have to drain some money out of my thinkorswim account!

I was a bit annoyed at first, but I can’t really complain about HSBC. Servers go down, software gets glitchy, and things just break sometimes. Besides, HSBC has never screwed me with stupid bank fees, and I once got a free ride in the HSBC cab.

HSBC said it will reset my account, so hopefully things will get back to normal soon.

Thinkorswim Software Platform Update

Thinkorswim updated its software platform today to version 1446, and a number of new features will be implemented. I’m most excited by the ‘Fly on the Wall’ news feed, the chat room, and the addition of a new user manual under the Help tab.

Here are all the new features:

General:

• 'Fly on the Wall' news feed for live market-moving information
• vertical scroll bars and flex layout control for Market View
• new Market Cast chat room
• icon for earnings announcements, conference calls and dividends on quote lists

Active Trader:

• multi-level OCO orders allow scaling out of positions
• complex OCO order relations linked in trade ladder window
• auto-center delay on price ladder
• new price link "Ave Prc" for conditional orders based on the average execution price on an order

Position Statement:

• group positions by account in Total Account mode
• in-the-money icon for ITM options at any time before expiration (configured via the Setup pane)

Analyze: import/export positions on Analyze tab

Charts:

• resize vertical (y-) axis with click and drag
• scroll vertical axis with Ctrl-Click and drag (Command-Click on Mac)
• different order types and multiple instances of similar order types slash-separated on pills
• trailing stop indicator is displayed at its current stop price
• undo/redo (Ctrl-Z & Ctrl-Shift-Z) feature for drawing tools
• extend vertical time levels through sub graphs
• change order of lower study windows
• preview and rename study sets
• pick and apply individual studies and strategies from a defined set
• new studies: Option Delta, Option Gamma, Option Theta, Option Vega, and Option Rho, and Major Gann Levels
• new alerts studies: CloseLocationValue, EhlersDistantCofficientFilter, ElliotOscillator, LinearRegCurve, MovAvgWeighted, VolatilityStdDev, CCI and CCIAverage
• thinkScript enhancements: AssignPriceColor function, new option-related functions, and MovAvgAdaptive, MovAvgRibbon, RibbonStudy, and TheoreticalOptionPrice are now translated into thinkScript

FX:

• all FX orders that are working on the existing "FX Trading" tab will be imported in to thinkorswim orders and will appear on the Monitor tab
• charts now include last trade price and volume data for all the FX executions for the past year
• 52 week high/low now available for FX

9/11

September 11th is always a pretty rough day for me. I’m a die-hard New Yorker, and NYC hasn’t been the same since. I didn’t lose anyone close to me, except for some high school classmates that were more acquaintances than friends. But I’ll never get over the shock of standing on the 69th Street Pier in Brooklyn and watching those towers collapse.

When I was 15 years old, I landed a job as a delivery boy at Harry’s At Hanover Square, which is located in the Financial District. I only occasionally went to the World Trade Center for deliveries. But when I did, it was always a treat. The view from the 104th floor was nothing short of majestic – it was where I wanted to work when I grew up. It represented success.

Tomorrow, on September 11th, 2009, my father will have heart surgery to clear out a few blocked arteries. Maybe it will keep my mind off the tragic events of 9/11/01, but I doubt it.

Barron’s Top Independent Financial Advisers

Barron’s recently posted a listing of its Top Independent Financial Advisers, as identified by the consulting firm Winner’s Circle. Here are the top 10:

1) John W. Rafal - Essex Financial Services

2) Ron Carson – Carson Wealth Management

3) Waldron Wealth Management

4) Mitchell D. Eichen – The MDE Group

5) Paul Tramontano – Constellation Wealth

6) Kevin Myeroff – NCA Financial Planners

7) Howard Sontag – Sontag Advisory

8) David Lees – myCIO Wealth Partners

9) D.K.Willardson – First American Trust

10) Dale Yahnke – Dowling & Yahnke

These listing are solid-gold marketing for any of the ranked advisers. But can they help any of us? The typical account these folks handle is in the millions, so I’d assume they can’t help you with your $22,000 401/K rollover.

However, I’d like to see Barron’s comingle its Top Independent Advisers ranking with its Top 100 Financial Advisers list to see who would really be on top.

See the rest of the list here

Bought Activision (ATVI) Call Spread

Today I bought a call spread on Activision (ATVI), buying the October $12 call options and selling the October $13 calls against them. This is a fairly small trade, less than 1% of my trading account. If the stock ramps, I could triple the amount I put down. I considered making an outright purchase of put options, but decided to play it less aggressively.

Video-game stocks like GameStop (GME) and Take-Two Interactive (TTWO) have been acting pretty well lately, as have related names like Best Buy (BBY). According to my research, sales of recent new games like The Beatles: Rock Band and Guitar Hero 5 are looking pretty good, and pre-order activity for Halo 3: ODST and the new Call of Duty is through the roof.

And just an FYI – I’m holding my put option spreads on AIG (AIG). That stock is dropping like it has an anchor strapped to it. Rather than cash in, I’m content to ride the price action. In fact, I might build an even bigger bearish position using put spreads at lower strikes.

TradeKing Gets 5-Star Rating

While I’m very happy trading stocks and options through Thinkorswim, I’m considering a second account with TradeKing. I have my doubts that TradeKing’s customer service is as good as Thinkorswim’s, but the commissions are dirt cheap. For options trades, TradeKing charges just $4.95 + 65 cents per contract. My current plan at Thinkorswim charges the lesser of 1) $2.95 per contract, or $9.95 + $1.50 per contract.

TradeKing was also just rated 5 stars by TopConsumerReviews.com, beating out the likes of Scottrade, OptionsXpress (OXPS), Sogo Trade, and Zecco. Not bad for a little guy.

Disclosure: I am an OptionsXpress shareholder

Google’s Gmail is Down Again

Is this affecting anyone else? Google’s (GOOG) Gmail is not letting me in right now, displaying this message every time I try to do something:

This comes on the heels of Gmail’s recent server overload, which left millions without access to their email. I can live with the occasional service disruption, but twice in one week?

That said, Gmail is still light years ahead of Yahoo! Mail, which brings my computer to a grinding halt every time I use it. Firefox just seizes up when I log in. Yahoo’s email search function is also a complete failure. I can search for my girlfriend’s name and nothing comes up even though we’ve exchanged emails just about every day for the past two years. And according to what I’ve read online, I’m not the only person with that problem.

Update – I’m also having some trouble with Bit.ly!

Smart Money Discount Broker Survey – Where’s Thinkorswim?

I just came across Smart Money’s 2009 discount broker survey, which ranks the most popular brokerage firms by categories like commissions, research, and customer service. E*Trade (ETFC) came out on top, with Fidelity and Charles Schwab (SCHW) rounding out the top 3.

However, I noticed that my broker of choice, thinkorswim, did not make it into the survey. You’d figure that the firm ranked #1 by Barron’s would make the cut.

 Interactive Brokers (IBKR) also failed to make the cut. I found that a bit unusual given than thinkorswim is almost certainly bigger than companies like WallStreet*E and SogoTrade. And IB is just enormous – at least with active traders, though those guys probably don’t read Smart Money magazine.

I put an email into the good folks at Smart Money asking them if there’s any particular reason thinkorswim wasn’t included. I plan on giving thinkorswim a ring as well.

Maybe the merger with TD Ameritrade (AMTD) is a factor?

For now, here are the best discount brokers, as compiled by Smart Money. If I learn anything, I’ll post it here.

1) E*Trade (ETFC)

2) Fidelity

3) Charles Schwab (SCHW)

4) TradeKing

5) TD Ameritrade (AMTD)

6) Muriel Siebert

7) Scottrade

8) Firstrade

9) OptionsXpress (OXPS)

10) Banc of America (BAC)

11) Just2Trade

12) WellsTrade

13) ShareBuilder

14) WallStreet*E

15) Zecco Trading

16) SogoTrade

Disclosure: I am an OptionXpress (OXPS) shareholder

Take-Two Starting a Monster New Product Cycle

Minyanville published a new article of mine - Take-Two Entering New Peak Product Cycle. It’s a summary of why I’m overwhelmingly bullish on Take-Two Interactive (TTWO). 

Take-Two is at the cusp of a new product cycle that should generate enormous earnings and free cash flow growth over the next two years. With BioShock 2, Mafia 2, and Max Payne 3 scheduled for release next year, Take-Two should have no problem delivering outstanding growth.

Plus, Grand Theft Auto V should come in 2011, or perhaps even in late 2010, giving the company an enormous boost in profitability. The cash flow from that game alone could be greater than the company’s entire enterprise value. I own Take-Two common stock and vertical call spreads - and I plan on making these positions even bigger.

Read More About Video Game Stocks

Die AIG Die!

No, I don’t want AIG (AIG) to die. I was merely writing in German – I actually said “The AIG The.”

Just as AIG crossed the $41 mark this morning (about 10:40 a.m.) I increased my bearish bet on the stock by adding another put spread.

Yesterday’s trade entailed going long the October $45 puts and shorting the October $43 puts. My trade today was even more aggressive, as I went long the September $41 puts and shorted the September $37’s.

My rationale for going long spreads rather than just making a straight purchase of put options is simple. The implied volatility readings on these things are huge. As of the time I’m writing this, the September $41 puts are going for about $12.50. That’s a heck of a lot of cash to lay out, and to make money, the stock would have to make a big move pronto to offset the time decay of the options.

By shorting a lower-priced strike against my long put position, I reduced my capital outlay. Granted, this caps my profitability, but that’s cool with me. I still think AIG’s stock is set to collapse but discipline trumps conviction – ESPECIALLY with options. I’m just not a Lenny-Dykstra type.