Copyright 2005 William Tan
7 Simple Steps to Financial Freedom and Wealth Building
STEP 4: The Business Setup - Choosing the Right Partner
With advancement in technology, the options trading business can
be easily setup with a few clicks of the mouse. Welcome to the
online world of trading.
Equity trading is a serious business because it involves a lot
of money - your money. It can build wealth and can also destroy
wealth. Either you make money from the market, which belongs to
someone else, or you lose your money to the market, which will
benefits another trader. So please take it seriously because
most traders and investors do not. So if you are serious, would
you trust your business dealings to just about anybody? I hope
not!
A business that does not have reliable partners typically will
not succeed for the long term unless a new reliable partner is
quickly identified. In the options trading business, brokers are
our partners. As such, we would have to identify and be very
selective in appointing the brokerage house to help us run this
business.
With so many brokerage firms out there, it can be quite a tough
and confusing for many of us. In fact, choosing the wrong broker
can be expensive.
So we have prepared an easy way to shortlist these brokers. A
good "business partner" should have:
Attractive commission rates - understand if it is fixed or if it
depends on the number of trades. Low commission does not mean it
is good.
High availability on their website - since almost all
transactions are executed online. Understand contingency as well
when website is down.
Fast Execution - a good opportunity may be gone if not executed
fast.
After Hours Trading - if you like trading longer hours.
Sweep Facility - a good broker would automatically take your
available cash to have it placed in a money market to generate
interest.
No hidden fees - many brokers have all sorts of endless hidden
charges. Do not take this nonsense.
Powerful trading Tools - like streaming real time quotes,
screeners, stock charts, etc.
Wireless trading facility - most of the time for day traders
Ability to execute complex options trades - many brokers provide
options trading but this is not good enough!
A good stock broker may not be a good options broker because
options trading are relatively new. Although stock brokerage
firms offer options trading, they are still behind in many of
the services offered by brokerage firms that specializes in
options trading. Once you understand options trading, which has
more than 20 different trading strategies, stock trading looks
like child's play.
When selecting a brokerage firm, select the best to prevent any
heartbreak later on. We have worked with several options brokers
and, in our opinion, www.optionsexpress.com and
www.thinkorswim.com are the best around. These two options
trading firms meet the requirements above while many have failed
to impress. Before proceeding to the next step, start working
with the right partner. It only takes a short while to open a
new account. This is an important decision.
Stay tuned for STEP 5 - Arm Yourself With Options Trading
Knowledge
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