First Trading Experience with OptionsHouse
I opened an OptionsHouse brokerage account a few weeks ago after noticing that it has lowered its online stock trade commission to $3.95/trade. That price beats what I currently get from other popular discount brokers, such as TradeKing, Firstrade, and even Zecco. However, since OptionsHouse requires some paperwork (such as a signed form and voided check, even though it used trial deposits to verify account ownership already) be sent in, the account was delayed several days (they even called me to let me know the account is available, which is nice).
Anyway, the account was successfully funded last week with $1,000 account minimum and I decided to test drive OptionsHouse to get a feeling how it works. I am glad I did it because there is something that I overlooked before opening the account left me a very bad taste of the broker.
I mentioned in my previous post that when I opened the account, it showed all quotes are delayed 20 minutes, which I thought doesn’t make any sense. It turned out that the account has to be funded in order to receive real-time quotes. Since now my account is funded, I indeed get stock quotes in real time.
The stock I wanted to buy yesterday was CIT Group (CIT), which has been in the news quite a lot lately because the government refused to bail the small business lender out. At the time when I entered my order, the stock was traded slightly higher than $1.25 a share, so I entered a order to buy $797 shares of CIT at limit price of $1.25/share. The total cost is $996.25. Since I already subtracted the commission cost of $2.95, the $1,000 in my account was enough to cover both the commission and the cost of the stock.
The next step is to preview my order before submitting it for execution. The preview page allows you to review details of the order. If, for example, you are placing a market order, which does not limit the price of the shares you want to purchase, the price of the stock may have already changed by the time you are ready to submit your order. And if the price has gone up already, you may not have enough fund to cover the transaction. With their real-time quote, it’s quite easy to determine whether an order can be executed or not based on the stock price. You will have a chance to change your order if this is the case. If everything is OK and you have sufficient fund in your account, you will be able to submit your order to have it executed.
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After I reviewed my order to make sure everything was fine, I submitted the order and the execution was almost instant (at least I didn’t notice any noticeable delay of the execution and since it was rather a small order in size, a delay of a second or two probably won’t matter if there is one).
Overall, the first trading with Options House went pretty smoothly. Given that their stock trading commission, now at $3.95 per trade, is the lowest among other discount brokers I have an account with, it makes sense to trade more often using Options House, especially for small orders (i.e., the total amount of the order is small) because that will reduce the percentage of the commission cost of the order.
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