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Making yourself invincible means knowing yourself;waiting for vulnerablity in opponents means knowing others.
-- The Art of War

If you are an options trader, you may have noticed a very pleasant trading month in March. Overall liquidity for options traders has never been better. The Options Clearing Corporation, now known simply OCC, reported that March 2011 produced a record volume in contracts traded. Over 420 million contracts changed hands - an increase of 19% above March 2010. The OCC also reported that the first quarter for 2011 witnessed a record amount of volume. According to the Wall Street Journal, some of the increase may be attributed to the high volatility caused by the news from Japan and North Africa.

Click on all charts to enlarge:

The Chicago Board Options Exchange ((NASDAQ:CBOE)) had some market share loss, with approximately 2.15 million equity option contracts traded. For the CBOE, the March 2011 volume was down more than 10% compared to March of 2010. Can an increase in option trading spell profits for trading companies, and are any of the companies worth putting into a retirement account?

We will take a look at a few trading-related companies and see if they might be a good fit. This is the third article in my series about stocks that may be good fits for retirement investing. You may see my previous one about food inflation related stocks here. I use a proprietary blend of technical analysis, financial crowd behavior, and fundamentals in my short-term trades, and while not totally the same in my retirement account investments the concept is the same. The last component for entry is the ability to sell put options at or near the offer price. I want the best of it when I enter into a trade, and I will not start out by paying a spread unless it is less than five cents and/or < 1% of the option premium.

To do well in the market, you should know the stocks you track inside and out. After all, every journey begins with a single step, so let us start by considering some interesting companies, which will give you a starting point for possible stocks that you might buy for your retirement accounts. For selection as a long-term hold in my own retirement accounts, a stock should exhibit the following characteristics:

  • A dividend yield higher than I can earn in a bank account?
  • Rising dividend history?
  • Rising revenue year-over-year?
  • Rising earnings year-over-year?
  • Rising EBITDA year-over-year?
  • Option trading available for the lowest risk entry possible? (Also, how could we possibly buy an options trading related company that doesn't have options available to trade?)

CBOE Holdings, Inc. (CBOE) is a $2.45 billion market cap company. CBOE Holdings, Inc. intends to operate as the holding company for Chicago Board Options Exchange. The company was founded in 1973 and is based in Chicago, Illinois. The company reported 4th qtr 2010 earnings of $0.31 per share on 2/10/11. Estimated 2011 Q1 Earnings is $0.34 per share. The low estimate is $0.30 and the high is $.35 with a mean of $0.28. The current trailing twelve months P/E ratio is 26.40 (ttm) and the forward P/E ratio is 18.4

  • A dividend yield higher than I can earn in a bank account? Yes, $0.40 is a current yield of 1.47%
  • Rising dividend history?


  • Rising revenue year-over-year? Yes, $425.15 million for 2010 vs. $417.9 million for 2009.
  • Rising earnings year-over-year? No, $99.4 million for 2010 vs. $106.45 million for 2009.
  • Rising EBITDA year-over-year? No, $164.62 million for 2010 vs. $177.23 million for 2009.
  • Option trading available for the lowest risk entry possible? Yes

The NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) is a $4.97 billion market cap company. NDAQ provides trading, exchange technology, securities listing, and public company services worldwide. The NASDAQ OMX Group, Inc. was founded in 1971 and is based in New York, New York. The company reported 4th qtr 2010 earnings of $0.55 per share on 2/2/11. Estimated 2011 Q1 Earnings is $0.61 per share. The low estimate is $0.58 and the high is $.65 with a mean of $0.61. The current trailing twelve months P/E ratio is 13.9 (ttm) and the forward P/E ratio is 11.2

  • Rising revenue year-over-year? No, $3.196 billion for 2010 vs. $3.049 billion for 2009.
  • Rising earnings year-over-year? Yes, $395 million for 2010 vs. $266 million for 2009.
  • Rising EBITDA year-over-year? Yes, $526 million for 2010 vs. $391 million for 2009.


  • A dividend yield higher than I can earn in a bank account? No.
  • Option trading available for the lowest risk entry possible? Yes.

Interactive Brokers Group, Inc. (NASDAQ:IBKR) is a $674 million market cap company.

IBKR operates as an automated global electronic market maker and broker. Part of IBKR is Timber Hill which is one of the largest market makers in options. The company reported 4th qtr 2010 earnings of $0.15 per share on 1/20/11. Estimated 2011 Q1 Earnings is $0.26 per share. The low estimate is $0.23 and the high is $.29 with a mean of $0.26. The current trailing twelve months P/E ratio is 27 (ttm) and the forward P/E ratio is 16.6

  • Rising revenue year-over-year? No, $755.4 million for 2010 vs. $986.9 million for 2009.


  • Rising earnings year-over-year? No, -$16.08 million for 2010 vs. $36.2 million for 2009.
  • Rising EBITDA year-over-year? No, $334.05 million for 2010 vs. $544.49 million for 2009.

NYSE Euronext, Inc. (NYSE:NYX) is a $10.19 billion market cap company. NYSE Euronext, through its subsidiaries, operates securities exchanges. It operates various stock exchanges, including the New York Stock Exchange (NYSE), NYSE Arca, Inc., and NYSE Amex LLC in the United States; and five European-based exchanges that comprise Euronext N.V. — the Paris, Amsterdam, Brussels, and Lisbon stock exchanges, as well as the NYSE Liffe derivatives markets in London, Paris, Amsterdam, Brussels, and Lisbon.

The company is headquartered in New York, New York. NYX reported 4th qtr 2010 earnings of $0.46 per share on 2/8/11. The next reporing quarter estimated mean earnings is $0.60 per share. The low estimate is $0.49 and the high is $0.65 per share.

  • Rising revenue year-over-year? No, $4.24 for 2010 vs. $4.46 billion for 2009.
  • Rising earnings year-over-year? Yes, $577 million for 2010 vs. $219 million for 2009.


  • Rising EBITDA year-over-year? Yes, $686 million for 2010 vs. $205 million for 2009.
  • A dividend yield higher than I can earn in a bank account? Yes, $1.2 is a current yield of 3.07%.
  • Option trading available for the lowest risk entry possible? Yes.

optionsXpress Holdings, Inc. (NASDAQ:OXPS) is a $1.08 billion market cap company. optionsXpress Holdings, Inc. provides brokerage and education services in the United States and internationally. The company offers Internet-based options, stock, bond, mutual fund, and futures brokerage services to retail customers

optionsXpress Holdings, Inc. was founded in 2000 and is headquartered in Chicago, Illinois. OXPS reported 4th qtr 2010 earnings of $0.20 per share on 1/27/11. The next reporing quarter estimated mean earnings is $0.24 per share. The low estimate is $0.23 and the high is $0.26 per share.

  • Rising revenue year-over-year? No, $204.69 for 2010 vs. $210.7 million for 2009.
  • Rising earnings year-over-year? No, $51.9 million for 2010 vs. $60.77 million for 2009.


  • Rising EBITDA year-over-year? No, $80.12 million for 2010 vs. $94.28 million for 2009.
  • A dividend yield higher than I can earn in a bank account? No, $0 is a current yield of 0%.
  • Option trading available for the lowest risk entry possible? Yes.

E*TRADE Financial Corporation (NASDAQ:ETFC) is a $3.5 billion market cap company. E*TRADE Financial Corporation, through its subsidiaries, provides online brokerage and related products and services primarily to individual retail investors under the E*TRADE Financial brand name worldwide.

The company was founded in 1982 and is based in New York, New York. ETFC reported 4th qtr 2010 earnings of $-0.11 per share on 1/26/11 The next reporing quarter estimated mean earnings is $0.12 per share. The low estimate is $0.08 and the high is $0.14 per share.

  • Rising revenue year-over-year? No, $2.389 for 2010 vs. $2.83 billion for 2009.
  • Rising earnings year-over-year? No, $-28.47 million for 2010 vs. $-1.297 billion for 2009.


  • Rising EBITDA year-over-year? No, $-3.14 million for 2010 vs. $-1.835 billion for 2009.
  • A dividend yield higher than I can earn in a bank account? No, $0 is a current yield of 0%.
  • Option trading available for the lowest risk entry possible? Yes.

TradeStation Group Inc. (NASDAQ:TRAD) is a $302 million market cap company. TradeStation Group, Inc. operates as an online broker-dealer, an introducing broker, a futures commission merchant, and a trading technology company.

The company was founded in 1982 and is headquartered in Plantation, Florida. TRAD reported 3rd qtr 2010 earnings of $0.03 per share on 10/21/10 The next reporing quarter estimated mean earnings is $0.03 per share. The low estimate is $0.02 and the high is $0.04 per share.

  • Rising revenue year-over-year? No, $118.54 for 2010 vs. $128.75 billion for 2009.
  • Rising earnings year-over-year? No, $11.44 million for 2010 vs. $15.79 million for 2009.


  • Rising EBITDA year-over-year? No, $13.79 million for 2010 vs. $26.07 million for 2009.
  • A dividend yield higher than I can earn in a bank account? No, $0 is a current yield of 0%.
  • Option trading available for the lowest risk entry possible? Yes.

Charles Schwab Corp. (NYSE:SCHW) is a $22.39 billion market cap company. The Charles Schwab Corporation, through its subsidiaries, provides securities brokerage, banking, and related financial services to individuals and institutional clients.

The company was founded in 1971 and is headquartered in San Francisco, California. SCHW reported 1st qtr 2011 earnings of $0.20 per share on 4/15/11. The next reporing quarter estimated mean earnings is $0.21 per share. The low estimate is $0.19 and the high is $0.22 per share.

  • Rising revenue year-over-year? Yes, $4.17 for 2010 vs. $4.11 billion for 2009.
  • Rising earnings year-over-year? No, $454 million for 2010 vs. $787 million for 2009.


  • Rising EBITDA year-over-year? Yes, $779 million for 2010 vs. $1.27 billion for 2009.
  • A dividend yield higher than I can earn in a bank account? Yes, $.24 is a current yield of 1.28%.
  • Option trading available for the lowest risk entry possible? Yes.

TD AMERITRADE Holding Corporation (NYSE:AMTD) is a $12.35 billion market cap company. TD Ameritrade Holding Corporation, through its subsidiaries, provides securities brokerage services and technology-based financial services to retail investors, traders, and independent registered investment advisors (RIA) in the United States.

The company was founded in 1971 and is headquartered in Omaha, Nebraska. AMTD reported 1st qtr 2011 earnings of $0.25 per share on 1/18/11. The next reporing quarter estimated mean earnings is $0.29 per share. The low estimate is $0.22 and the high is $0.30 per share.

  • Rising revenue year-over-year? Yes, $2.433 for 2010 vs. $2.367 billion for 2009.
  • Rising earnings year-over-year? No, $592.19 million for 2010 vs. $643.71 million for 2009.


  • Rising EBITDA year-over-year? No, $.912 billion for 2010 vs. $1.059 billion for 2009.
  • A dividend yield higher than I can earn in a bank account? No, $0.20 is a current yield of 0.90%.
  • Option trading available for the lowest risk entry possible? Yes.

The Goldman Sachs Group, Inc. (NYSE:GS) is a $79.6 billion market cap company. The Goldman Sachs Group, Inc., together with its subsidiaries, provides investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. Its Investment Banking segment offers financial advisory, including advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense, risk management, restructurings, and spin-offs; and underwriting securities, loans and other financial instruments, and derivative transactions.

The company was founded in 1896 and is headquartered in New York, New York. GS reported 4th qtr 2010 earnings of $3.79 per share on 1/19/11. The next reporing quarter estimated mean earnings is $0.82 per share. The low estimate is $0.24 and the high is $1.26 per share.

  • Rising revenue year-over-year? No, $45.96 for 2010 vs. $51.67 billion for 2009.
  • Rising earnings year-over-year? No, $8.35 million for 2010 vs. $13.38 billion for 2009.


  • Rising EBITDA year-over-year? No, $12.82 billion for 2010 vs. $19.82 billion for 2009.
  • A dividend yield higher than I can earn in a bank account? No, $1.40 is a current yield of 0.9%.
  • Option trading available for the lowest risk entry possible? Yes.
Source: Do These Options-Related Stocks Belong in Your Retirement Account?