optionsXpress Holdings Inc. (OXPS)

All Comments on OXPS

  • commenter
    InglefoX
    investing
    Jul 07 04:25 PM
    My Website
    Brokerage Stocks: Trouble on the Horizon? [view article]
    First of all, capital "flees" the market as people sell equities (evidenced in a falling market) and move into cash.

    OXPS more than IBKR or SCHW relies on options trading and yes it is true that people can buy put options in falling markets; however, if you look to the CBOE VIX you'll see that people have been forced to pay some extremely high premiums over the past quarter in order to obtain options. These high premiums eat into the available option capital and thus cut the number of commissions that can be earned by the options brokers.

    One of the most important things to remember when talking about the DARTs is that the current released DARTs only represent part of the quarter. Don't get a false sense of security in the DARTs because they cannot tell the entire picture.

    Of course you can debate all you like, but the real answer will only come when the company reports and so I think it's best to let the actual earnings solve the debate. If you wish to discuss this further then I encourage you to visit my blog.     Reply
  • commenter
    NjordWind
    Jul 07 03:37 PM
    Brokerage Stocks: Trouble on the Horizon? [view article]
    The only forward looking numbers I cited were earnings - on a trailing basis P/sales and P/ebitda are at all time lows. Furthermore, this company has pretty good earnings visibility, at least into the next quarter. This is because they provide us with monthly updates on DARTs, new accounts, margin balances, etc. This means estimates for the current quarter already have 2 months of information built into them. I've got my own model for estimating earnings, it has performed quite well, and it's currently pointing towards the high side of analyst estimates for this quarter.

    Could you please elaborate on the "current conditions" under which OXPS can't make more money? I've already pointed to the high correlation of OXPS revenues to CBOE volumes to show how it's quite easy to see revenues and net income increasing year over year. Your short thesis does go beyond "I've got a feeling", doesn't it?

    Here's one thing to think about: How, exactly, does capital flee the market? Hint: It doesn't take the bus.     Reply
  • commenter
    InglefoX
    investing
    Jul 07 02:12 PM
    My Website
    Brokerage Stocks: Trouble on the Horizon? [view article]
    I will say that IBKR is certainly the strongest of the bunch and I used the term "some" to describe the prop trading because I was lumping the three together. It is indeed true that IBKR relies probably more heavily on prop trading than retail investing. In my article I'm taking the assumption that their prop trading numbers will be equal to their numbers from last year (which may not even be possible) and that their retail numbers are what will be responsible for a miss in earnings.
    For Doug Estadt, I see the fact that IBKR is undergoing a "slick new ad camgaign" as a sign of a weakened retail business. They are trying to attract more customers by outadvertising the competition.
    And there is no doubt in my mind that while IBKR is the strongest of these three there is also no doubt in my mind that OXPS is the weakest. Mr. NjordWind, you have cited forward looking numbers that are based upon analyst estimates and just because a stock is at its lows does not mean that it cannot sink any further. Under the current conditions it just doesn't seem possible for OXPS to have made more money this year than last and I expect a big miss. I hope for your sake that you're right, but I see all of the evidence pointing to the downside.     Reply
  • commenter
    NjordWind
    Jul 07 12:04 PM
    Brokerage Stocks: Trouble on the Horizon? [view article]
    Whoops: Disclose needed - long OXPS. Reply
  • commenter
    doug estadt
    Jul 07 12:02 PM
    My Website
    Brokerage Stocks: Trouble on the Horizon? [view article]
    Sorry, but must disagree with you on being negative IBKR, Interactive Brokers are growing rapidly and their slick new ad campaigns on CNBC and Bloomberg emphasizing they are approx 15 x better executing trades than most brokers is surely helping them gain new accounts. And they seem to be geared toward more sophisticated clients who will be shorting and trading in int'l markets which doesn't mean their revenues will be declining.

    Reply
  • commenter
    NjordWind
    Jul 07 11:42 AM
    Brokerage Stocks: Trouble on the Horizon? [view article]
    Can't say I agree with your short thesis. I don't know a lot about IBKR and even less about SCHW, but I've spent a fair amount of time on OXPS. I've noticed their revenues (and, because of their very stable margins, net income) correlate very highly with quarterly CBOE volumes. The model could use a little work because I don't break out PFOF and interest income, which will be declining to flat in the current environment. However, 2Q08 CBOE volumes were up 27% versus the prior year period, meaning commissions and other brokerage income should remain strong. We've also seen DARTs, net new accounts and margin balances hang in very well during April and May, although admittedly June was a very bad month, and may have scared some people away. Furthermore, the retail investor has hung in thus far, and of course options can be used in either market direction. Bottom line is I've got several indicators pointing towards upside to the 2Q numbers. Do you have something you can point to besides "The stock and market have gone down and thus I don't think they'll hit numbers"? Not trying to be antagonistic, I'm just looking for a little more detail.

    On another note, if you've been short these stocks for awhile,well done, good trade thus far. If you've just initiated the positions recently, however, I think you're in the wrong place. In addition to everything I mentioned above, OXPS is currently trading at all-time lows in P/Forward earnings, P/S, P/EBITDA, pretty much every valuation measure, and they numbers aren't even that high: 12X forward earnings and 7.7X EBITDA. Margins have remained steady. The stock has already fallen 37% this year (after a 49% rise in 2007); still, I think you missed your chance.     Reply
  • commenter
    James Davis
    Jul 07 11:19 AM
    Brokerage Stocks: Trouble on the Horizon? [view article]
    You need to do some more work on IBKR, they make more than 'some' money from prop trading. THEY ARE MARKET MAKERS WORLDWIDE.

    Lumping them in with the others is poor workmanship.

    They may or may not beat, but it has little to do with retail clients.     Reply
  • commenter
    Paul Price
    Apr 26 07:10 PM
    Three Cheap 'Transactional' Brokerage Firms [view article]
    Interactive Brokers [IBKR] blew right through all estimates in its March quarter with EPS of $0.66 v. $0.31 in 2007.

    The shares are now north of $30.     Reply
  • commenter
    Paul Price
    Apr 25 12:52 PM
    Three Cheap 'Transactional' Brokerage Firms [view article]
    TradeStation earnings up on busier tradingSouth Florida Business Journal
    Print Article Email Article Reprints RSS Feeds ShareThis
    Related News
    TradeStation earnings up on trades [South Florida]
    Early earnings results still positive, despite housing downturn [South Florida]
    TradeStation Q3 earnings up 24% [South Florida]
    TradeStation Group said its earnings rose 1 percent in the first quarter, as market volatility pushed customers to trade.

    The Plantation-based electronic trading platform said it earned $8.3 million, or 19 cents a share, on revenue of $40.7 million. In the prior-year quarter, the company said it earned $8.2 million, or 18 cents a share, on revenue of $35.3 million.

    TradeStation (NASDAQ: TRAD) said its brokerage fees and trading commissions jumped 37 percent, driven by heavier trading volume.

    The company said its clients made an average of 109,219 trades a day in the first quarter, up 56 percent. Client accounts grew 17 percent, to 38,657.

    Shares closed up 7 cents to $9.27. The 52-week high was $14.87 on Dec. 24. The 52-week low was $8.11 on March 31.

    Reply
  • commenter
    Paul Price
    Apr 25 12:41 PM
    Three Cheap 'Transactional' Brokerage Firms [view article]
    optionsXpress Announces First Quarter 2008 Results
    Tuesday April 22, 8:00 am ET


    CHICAGO--(BUSINESS WIRE)--optionsXpress Holdings, Inc. (NasdaqGS: OXPS - News) today reported results for the three months ended March 31, 2008. Highlights from the first quarter of 2008 included:

    Revenues of $60.8 million, an 11% increase year-over-year

    Net income of $23.8 million, or $0.38 per diluted share

    Daily average revenue trades (DARTs) of 38,000, a 24% increase year-over-year

    Net new account growth of 14,700 during the quarter, resulting in 277,100 customer accounts, a 24% increase year-over-year

    Industry-leading 62% pre-tax margins
    $5.4 billion in customer assets on March 31, 2008, a 9% increase year-over-year




    Interactive Brokers (IBKR):
    4:00pm 04/24/2008


    IBKR ($27.87, +0.39, +1.4%) said first-quarter net income came in at $27.2 million, or 66 cents a share, more than double the same period a year ago.

    Net revenues were $528.4 million, up from $330.8 million in the same period.

    Interactive Brokers was expected to make 50 cents a share, according to three analysts in a Thomson Financial survey.

    Shares gained 6.75% after hours.
    Reply
  • commenter
    SeekingAlpha
    Editors
    Apr 06 05:18 AM
    My Website
    General Discussion on OXPS
    Is this a buy or a sell? Reply
  • commenter
    Paul Price
    Apr 03 08:27 PM
    Three Cheap 'Transactional' Brokerage Firms [view article]
    All market makers take some risk of holding positions that can go against them. In the same way, though, they will sometimes make money by being forced to hold positions that work out well.

    Over time, the specialist tends to do well as they are forced to buy when others panic sell and forced to short into rabid enthusiasm. Both those actions usually end up being the right side of the trade.     Reply
  • commenter
    User 314159
    Mar 31 11:42 AM
    My Website
    Three Cheap 'Transactional' Brokerage Firms [view article]
    Paul - Do you think there is any chance at all of IBKR getting caught on the wrong side of some market making? For example, if they were making a market in BSC 30 puts when the stock was at 60, and two days later it was at 2, and IBKR ended up being short those puts? That could have cost them millions if something like that were to happen. I think the stock is down from 33 because there are fears they could go bankrupt due to some bad market making and getting caught on the wrong side of a market during volatile times. The commission side of their option business is just fine, it's the market making I'm worried about. Reply
  • commenter
    Paul Price
    Mar 25 02:00 PM
    Three Cheap 'Transactional' Brokerage Firms [view article]
    Sorry, the correct cash for TradeStation is $92 MM. My bad. Reply
  • commenter
    Paul Price
    Mar 25 01:55 PM
    Three Cheap 'Transactional' Brokerage Firms [view article]
    The cash figure is right off their latest Value Line report. It is correct.

    The target is based on per share earnings. All shareholders have the same claim on profits regardless of how much stock is in public hands.     Reply
Loading...
Symbols:
Authors:
Quick Links: