By Steve Papale
They say the Stanley Cup is the most coveted trophy in sports. I am not sure about that but what I do know is the winners of the Stanley Cup get do things they don’t do in other sports. This week after the Chicago Blackhawks won the Cup, the team gets to shuttle it everywhere. It has turned up at bars, homes, restaurants and on sidewalks around town. Half the city has had their picture taken with the cup it seems. Patrick Sharp had one of his kids sitting in it. I really like this tradition. Kind of like the cousin Eddie of sport celebrations.
Since I do a lot of mentoring with newer students I get asked about which broker to use. There are many choices out there these days. From E*TRADE to Fidelity to Schwab and Optionshouse (formerly TradeMonster), OptionsXpress, Interactive Brokers and Thinkorswim they can all provide the execution most of us are looking for. So how do we decide who to use?
I am familiar with 4 of these platforms – OptionsXpress, Optionshouse, Thinkorswim and Interactive Brokers. I can’t speak about E*TRADE or Fidelity but I know we have students or former students who are quite happy with them. Execution is becoming a commodity and as such these platforms perform pretty much the same. But there are a few things you should look at if you are trying to decide who to choose.
First and foremost find out how easy is it to get customer service on the phone during the trading day? If the system goes down or you can’t access your platform you will need to call them directly. How fast they answer the phone and trade your account if necessary can be a big deal. Check this out ahead of time. Not being able to get someone on the phone to close or adjust a position can potentially be very costly. Lots of traders focus on commissions next and it is certainly something to consider. Most brokers these days are fairly close. Unless you are trading large size, the difference between $1 or $1.10 per contract is not a big deal I think.
Other things to look at are ease of modeling and order entry. For example, Interactive Brokers models condors different than most others. You will need to get used to that if you use them. No big deal but something to consider. Some platforms have more charting capabilities while some have real time greeks. Like buying a car, decide on the model that is best suited for your needs and take it for a test drive.