Zecco:

Price per trade:
$4.50 – Internet based
$19.95 – Broker Assisted

10 free stock trades if you do 25 of more trades per month or if you have $25,000 in your account.
Options: $4.50 + 0.5 per contract

Margin Rates:

$0-$9,999 - 7.75%
$10,000-$24,999 – 7.50%
$25,000-$49,999 – 7.25%
$50,000-$99,999 – 6.75%
$100,000-$249,999 – 6.25%
$250,000-$499,999 – 4.50%
$500,000 + – 4.00% – Call them, it is negotiable.

TradeKing:

Price per trade:
$4.95 (Both internet and broker assisted)

TRADEKING adds $0.01 per share on the entire order for stocks priced less than $1.00. $100 minimum investment per order in OTCBB and Pink Sheet stocks.

Margin Rates:
$0 – $9,999 – 6.50%
$10,000 – $24,999 - 6.50%
$25,000 – $49,999 - 6.50%
$50,000 – $99,999 - 5.50%
$100,000 – $249,999 - 5.50%
$250,000 – $499,999 - 4.50%
$500,000 – $999,999 - 4.50%
$1,000,000 + - 4.50%

In conclusion: If you interact with the customer service, prefer broker assisted trading and prefer a margin account then TradeKing is better.
If you trade penny stocks, want to get 10 free trades and pay cheap commissions then Zecco is better.

Here is the stock watch list for December 28, 2009.

Athersys, Inc. (ATHX: 3.11 0.00%) – Although Athersys failed to reach new highs on Thursday, it did manage to gain $0.24 per share to close at $5.52. It might breakout and go over $6 or pull down to mid $4’s. Watch out for the trend.

Compugen Ltd. (CGEN: 4.85 0.00%) – On December 23, CGEN went from $2.76 to a high of $5.45 and then on Thursday, it pulled back to $4.08. That was a 13% pull back. CGEN ran up because of the same reason as the ATHX – Pfizer deal. If CGEN follows the trend of ATHX, then we might have a run to mid $5’s on Friday.

CitiGroup. (C: 3.82 0.00%)- For me, Citi may not be a BUY for the short term, but it is a big BUY for the long term. It has paid back its TARP money and the United States Government will soon sell their Citi shares. There is no reason for Citi to stay below $4 in the long term. I would suggest to buying Long-Term Equity Anticipation Securities (LEAPS) or long term Options for Citi.

Fannie Mae. (FNM: 1.07 0.00%) and Freddie Mac. (FRE: 1.28 0.00%) – Everyone knows that FNM and FRE are both dead stocks, but they never seem to give up. After the market closed on Thursday, the treasury removed cap for Fannie and Freddie aid. This means, they will receive as much assistance they want to survive. This news might cause these stocks to make a short run up. Watch out for them.

Gannett (GCI: 16.06 0.00%) – Wells Fargo upgraded Gannett to $18, but as advised by TheStreet.com, we are going against the grain and selling GCI.

Penny Stocks Watch list for December 28, 2009:

YRC Worldwide Inc. (YRCW: 0.5192 0.00%)
SIRIUS XM Radio Inc. (SIRI: 0.9108 0.00%)
E*TRADE Financial Corporation (ETFC: 1.68 0.00%)
Zevotek, Inc. (ZVTK.PK)

StocksNewbie recommends Zecco.com(aff.) to trade Penny Stocks.

When people buy stocks, they want the stock price to go up. This is called a “Long” position.

If you want the stock price to go down, you are taking a “Short” position.

So, when you are “shorting stocks”, you borrow stocks from your brokerage company, sell them at the current market price, and get the proceeds. Since you borrowed that stock, you have to give it back. If the price of that stock falls, you can buy that stock back at a cheaper price and give it to your brokerage firm.

Let me give you an example:

Couple of months ago, the shares of Citi Group (C) were selling for $5.00. Say, you got a feeling then that the stock price of C will go down and you shorted 1000 shares of C. You proceeds would have been $5000. Remember that you borrowed these shares and you have to buy them back from the market. Now, as of today, the stock price of C is $3.40. To buy 1000 shares, you have to pay $3400. Your total profit is $5000-$3400 = $1600.

Sir, you have just made some profit.

BUT…there is always a “BUT”. If the stock price had gone up, you would have lost money.

Facts about “Shorting Stocks”.

1. When you open a position, it is called “Short” position. When you close this position, it means to “cover” your position.

2. When you open an online trading account, you are generally not allowed to short stocks. You have to have a “Margin account” and the permission of your broker to short stocks.

3. Shorting stocks can be very risky because your potential loss is unlimited. When you short stocks, you are hoping the price will go down. What if the price goes up and goes up very high. Theoretically, it can go to infinity and beyond. To cover your short position, you may have to spend all your wealth.

I have a margin account at Zecco.com(aff.) and I can short stocks, if I want. It is just a useful tool to have, because you can make money if the stock market goes red.

When you are buying or selling options, you are basically signing a contract. A contract, either to buy or sell a stock at a predetermined price.

There are two types of Options: Calls and Puts.

There are numerous sources online that give detail information about Calls and Puts, but most of them are very confusing. I know I was confused when I was trying to understand “Options”. So, I am going to give you guys a newbie version of Call and Put Option.

First, here are the basics on Options:

1. The smallest unit of “Options” is 1 contract. The number of contracts you buy or sell must be a whole number. For example, you can’t sell 8.5 contract.

2. 1 contract = 100 shares. So, 10 contracts = 1000 shares.

3. Options expire on the third Friday of the month. Well, technically, they expire on the third Saturday, but you have until Friday to open or close positions.

Call Option: It is an option to buy a stock at a predetermined price called the “Strike Price” by a predetermined date called the “Expiry date”.

For Example: Bank of America stocks are selling for $15.00. Say a buyer bought a Call Option of Bank of America (BAC) with a strike price of $16 expiring Jan 15th 2010. The buyer has to pay some amount, known as the “Premium” to buy that call option. In this case, it is about $0.25 per share. So, if you buy 10 contracts (1000 shares) of this call option, you will be paying $250 plus the broker commission.

If the stock price of BAC reaches $16.01 (or more) on or before the expiration date, that means you are “in the money” and you have the option to “exercise” your option to buy 1000 shares of BAC at $16.00. But, people usually just sell the contract or “close the position”. If the option is in the money, the price of “Premium” would increase and you make profit by selling that contract back in the market.

So, when you buy a Call Option you are assuming a “long” position in a stock i.e. you want the price of the stock to go up.
If you sell a Call Option, also called a “covered call”, you are assuming a “short” position in a stock i.e. you want the price to go down.

Confused yet?

Say, the price only reaches $15.90 by the expiration date. This means your Call Option is “out of the money” and it will expire worthless if you don’t close your position before the expiration date. Of course, the price of “Premium” would decrease and you lose money. If the Option expires worthless, you only lose the premium you paid.

Put Option: This is exactly opposite of Call Option. It is an option to sell a stock at a predetermined price called the “Strike Price” by a predetermined date called the “Expiry date”.

For Example: Bank of America stocks are selling for $15.00. Say a buyer bought a Put option of Bank of America (BAC) with a strike price of $14.00 expiring Jan 15th 2010. The buyer has to pay the “Premium” to buy that Put option. In this case, it is about $0.23 per share. So, if you buy 10 contracts (1000 shares) of this call option, you will be paying $230 plus the broker commission.

If the stock price of BAC reaches $13.99(or less) on or before the expiration date, that means you are “in the money” and you have the option to “exercise” your option to sell 1000 shares of BAC at $14.00. If the price is more than $14.00 then you are “out of the money”.

Buying a Put Option is like buying an insurance for your stocks. In the above example, if the stock price goes to $13 or even lower, you can still sell your shares at $14.

More facts about Options:

1. The closer you get to the strike price, the more expensive the Premium.

2. Only about 17 % of the Options are exercised. Most traders just sell or buy the contracts to close their position before the expiration date.

3. Options are risky and unless you understand what you are doing, you should stay away from them.

4. You are an idiot if you don’t try and learn how to trade Options.

Usually brokers charge, normal trading commission plus extra amount per contract to trade Options. That amount is usually ranges from $1 to $2 per contract. For example: To buy an Option through Sharebuilder, the price is $9.99 + 1.50 per contract. For 10 contract, you pay 9.99+15=$24.99.

I recommend Zecco.com (aff.) to buy Options because, the price per contract is only $0.50. For 10 contracts you will pay 4.50 + 5 = $9.5 at Zecco compared to $24.99 at Sharebuilder.

Watch out for Bank of America (BAC) tomorrow. Federal regulators have agreed to let Bank of America pay back the $45 billion Troubled Asset Relief Program (TARP) loan it received last year.

BAC is using their available cash and will sell $18.8 billion worth of securities to repay the government bailout funds. The news has been received positively by the investors as BAC gained 2.17% in after-hours trading.

More on the story from other sources:

The New York Times:

Less than a year after grasping two multibillion-dollar bailouts from Washington, a resurgent Bank of America announced on Wednesday that it would repay all of its federal aid, underscoring the banking industry’s swift recovery from the gravest financial crisis since the Depression.

Despite continuing problems with its loans to struggling homeowners and consumers, Bank of America plans to return the $45 billion in aid that it received at the height of the financial panic — a step that, only months ago, would have been almost unimaginable.

But like many other big banks, Bank of America is once again making money, in large part through Wall Street businesses like trading stocks and bonds, rather than by making loans. Its recovery, while many ordinary Americans are still struggling, is an important milestone in the government’s yearlong effort to stabilize the nation’s financial industry.

Source

Associated Press:

Bank of America Corp. said Wednesday it plans to repay its $45 billion in government bailout funds in the next few days, a move that will help the troubled bank recruit a new CEO.

The bank said in a statement it would use available cash and raise $18.8 billion in capital to repay the money, which it received during the height of the credit crisis last year and after its purchase of Merrill Lynch & Co. earlier this year.

Bank of America has been searching for a successor to CEO Ken Lewis since the bank announced in late September that he planned to retire on Dec. 31. But the bank, burdened with government restrictions and close oversight after accepting the Troubled Asset Relief Program funds, has so far been unable to sign a new chief executive.

“It removes the stigma that we’ve had as a company,” spokesman Bob Stickler said of the planned repayment. “We become more attractive to a CEO candidate. Whether that means we get somebody external is impossible to say.”

The bank has said it was considering candidates from inside and outside the company. Stickler said a decision is expected “in the near future.”

Investors were relieved by the news, and sent Bank of America stock up 3.3 percent in after-hours trading.

Source

StocksNewbie recommends Zecco.com for 10 free trades per month (aff).