Optioneer

I have been a bit evasive when it comes to talking about any of the services that I have tested, mainly as I was hesitant to attract any attention to something that I had no idea whether it would really work out well or not. Optioneer is different. Partly due to the ideal that their system and service is based upon and partly due to the training in advance and the explanation of the system long before any commitment is reqiured.

So, I am signing up for the Optioneer service. This is the more expensive service with the dedicated broker I mentioned. If this was not to be a long term plan I would reconsider going this route as I can place the strangle trades myself but cannot trade the markets they use. I would be restricted to using ETF options to emulate the market activity as strangling a stock is a little to "iffy" for a variety of reasons.

Even so, legging into a strangle is not overly complex, nor is closing the trade. They are really two bracketing spreads, as mentioned in my last post.

The downside of doing it myself is that the round trip for each contract is $22 initially. Subsequent contracts in the same execution are $1 per contract. Getting started involves at least four separate trades which adds up to $88 in commissions. Going with Optioneer starts the same round trip commissions at $24... that is a fair difference and the initial startup cost is offset after 62 trades. The monthly data fee is between $90 and $195 (I'll be at the minimum for some time) and I am used to paying close to $200 for decent charting services per month already so I consider the data fee a fair exchange.

In larger trades the Questrade route works out to be cheaper as the $24 Optioneer commission is charged for every full strangle trade unit. If I trade 4 units (4 of each calls/puts bought and sold) their commission is $96 whereas Questrade is $97. There is the break point. Having said that I would be trading different markets altogether, different valued units, Optioneer manages a lot of the data and signals ... so I can hardly compare the two fairly. Apples and oranges.

A quick note about using strangles and data. There is very little need to watch anything intra-day so having live data is a negligible benefit outside of the trading platform. With Optioneer I do not place the trades in the market as I am used to, I send the entire order to the broker and they look after executions for me... that is worth something right there as well. Also they have profit and loss auto exit strategies so I don't even have to decide when to close trades... if I don't ant to.

I am downloading and printing off the necessary forms as I type this.

Like I said, this is a long term plan, as would be any self generated strangle strategy based system. All in all I do not begrudge the upfront fee nor the monthly data fees as I consider this strategy a reasonably sound one and having a lot of the work done for me is a great advantage and I am looking forward to getting up and running.

Jeff.