I'm a big fan of moving things over to digital (music, paperwork, business transactions, etc) but up until now I haven't really been satisfied with digital books. I've read a few on the PC, but that was usually because I couldn't get them anywhere else. The advent of the kindle caused me great excitement, since finally a major book distributor was supporting an e-reader, but I felt the device itself was lacking and the price point of $9.99 a tad high since I mostly buy paperbacks.

  Fast forward to 2010. I've sold the majority of my paperbacks(for space reasons mostly, plus extra cash is nice), and while I'm always buying more, space has been a big issue since now I travel more as well. Barnes and Noble book sellers has come out with a product that compares favorably to the kindle, and is better in many, probably most, areas.

   I ordered my Nook in early January. It was back ordered at the time, so the estimated shipping date was Feb 12th. Thankfully, it shipped sooner than that and I actually received it on the 12th. I would have received it sooner, but they don't ship to FPO AP addresses so I had to go through a trusted agent in the States. The Nook is not supported in anyway shape or form outside the physical United States. I knew this going in, but I am still surprised at the lengths B&N will go to in frustrating people outside the US. 

  I opened it up and set the Nook to charging. After it was fully charged (it took about an hour), I started the setup. One of the big features that I like is that Nook works with both 3G and wifi. Since I'm not in the U.S. , I can use my local wireless router to transfer files and download books. *I thought I would be able too, but this is incorrect since I can't register my nook. It recognized my wifi network after a short wait, and I was able to enter the WEP key with no problems. It was a little disconcerting entering the 16 digit key because there is a noticeable lag from when you press a button until the Nook responds, and I had to keep switching back and forth between the text and number touch screens. I think B&N recognized the lag and put in a feature where the password block displays the character you just entered before masking it on screen.

After I got some books on the nook, I went to my library.They didn't show up at first, but when I pressed check for new content,  it found the 7 new books I had downloaded from my PC.

The good:

• The user interface is fairly intuitive, which is good because the manuals that come with it are pretty light. However, you can download a 177 page users guide from the B&N website.
• My windows vista PC recognized the nook right away, and the nook realized it was plugged into a PC.
• Wall charging adapter included, which makes for faster and more convenient charging.
• Easy right and left hand page turn buttons. 
• Several different power saving modes. Once an image or text is on the main screen, it consumes no power. 
• Ability to lend books to friends for two weeks at a time. 
• Easy to replace battery 
• You can name your device. Hello "The Readinator'
• I found a software update on the B&N website. Download and install to my Nook manually was a snap.



• Buying and downloading ebooks is extremely quick, once you get around the limitations of the store. (See using the nook outside the US below)

The bad:

• Removing the nook for the hard plastic holder was incredibly difficult to do gently. There were actually instructions hidden behind my receipt that must have been late packing addition. Too bad I didn't see them first, although I ended up doing exactly what they said anyway.
• I checked out the settings and found that of the "2GB" of storage space, 1.28GB is actually usable.
• My first attempts at registering the Nook failed. This may be user error, or it may require 3G.
  Prognosis is lack of 3G connectivity. See Using Nook outside the U.S. below
  
• Long boot time and lagging input recognition time. This makes browsing annoying, but should be fine for just reading. 
  *I figured out that the touch lag is partially because Nook won't complete a touch action until you remove your finger.
• Pre-Ordering and Purchasing books with an FPO address is not allowed. Luckily, I also have addresses in the U.S.
• Scrolling on the touch screen sucks. The graphic is poorly made, and the touch response poor as well. It's still usable though. 
  *After reading the manual, I discovered that the scroll bar really is just for show. You can touch anywhere on the screen and scroll, which is why it highlights a selection first. Once you start scrolling the item is deselected.
• The Nook is not waterproof, so no reading in the rain. Thank you users guide.
• You can only lend an Ebook one time(unaccepted lending offers don't count). That really pisses me off. I can lend a hardcopy book as many times as I went, why not ebooks!
• The DRM content stores you credit card number inside each book you buy! It's used to verify your purchases if your nook is unregistered for whatever reason, but this is pretty outrageous to me. I bet the files are not that hard for potential thieves to crack.

• I can't locate the external microSD card slot. Not a problem now, but maybe later. Considering the limited number of inputs and out puts, this should be pretty easy...
  *After reading the manual, I figured out you have to remove the back cover to get to the SD card   slot, the battery, and the sim card see pic below.
• B&N already has a software update. Looks like its mostly bug fixes, but hopefully future updates will add more functionality. On the plus side, you can update manually with a PC or over the air with 3G. 
• The Nook button is not actually a button, so the manual that keeps telling me to push it really should give you warning not to push it. It's a capacitive only sensor.
• Dave Barry (the writer/columnist) has his own user guide in "The Daily" section of the nook. Meh. He's done much better work.

    Special section on using Nook outside the United States(or how Barnes and Noble makes it really hard for me to give them my money). 

•  You cannot register Nook except with 3G connectivity in the physical United States. Overseas just does not work. You either have to have someone in the States register it for you, or live with it unregistered. I will live with the limitations for another 6 months until I go back home. Being unregistered doesn't really seem to limit the stand alone usage of the device, it just means you can't used the store from your device.  
• You can't buy ebooks from the store if your IP address is not in the United States. It doesn't matter if your shipping and credit card info are in the US, digital downloads require an US IP address as well. I got around that using a proxy server with an IP address in the US. 
• I was able to open my DRM purchased content on my nook without it being registered. Thankfully B&N had the foresight to realize there would be situations where you don't have your nook registered 100% of the time. You just have to enter first and last name, and the credit card you used to purchase the book. Entering it one time will unlock all other books on that card as well.
  

It seems that the back is actually a false back. Getting the cover off the first time was not too difficult with help form the User guide, and safely reattaching it was easy as well with the UG.

A few weeks ago I signed up for Options trading privileges from my brokerage, Zecco.com, and today my options access was granted.

The basic idea is simple. I have shares of a company in my regular trading account that I'm willing to sell and make some profit on. In the mean time, I intend to sell "covered calls" so that I earn money from the shares until they get sold. Basically, it means that someone will pay me for the right to purchase my shares of stock if it rises to a certain price. The risk is that the stock will rise the call will be used by the buyer. One of the nice things about Zecco is that you can have a pretty girl explain this and other investing techniques to you. Another explanation can be found here: http://www.mindxpansion.com/options/sell-calls.php .

I logged in today full of excitement, and then discovered I had no idea how to actually execute the sale. There are something like 11 fields to input information into, and I need to learn the right way to do it.

My starting point is the Zecco.com education section. I know basically, what I want, I just need to figure out how to tell that to Zecco. Sadly, zecco was less than helpful on the specifics of executing the trade. I was able to figure it out with an hour of experimentation and internet research, but it should have been easier.

My trade type options are: BASIC, COVERED CALL, LONG/SHORT ROLL OUT/ MARRIED PUT.  I'm trying to sell a covered call, but it looks like when I select that option it forces me to buy the underlying stock at the same time, which I don't need to do. I'll stick with basic for now.

My transactions options are BUT TO OPEN, SELL TO CLOSE, BUY TO CLOSE, SELL TO OPEN. Once again, I'm not sure so I'll look it up. It turns out that each option transaction has an opening and closing phase, unlike a stock which you can hold indefinitely. Since I'm writing a covered call, I want to SELL my option contract to OPEN the transaction. 

The rest of the fields aren't quite as obscure.

• Contracts: The number of options contracts you are writing or buying. One contract is generally for 100 shares of the stock, so I only want to write one contract.
• Symbol: is the stock ticker symbol.
• Expiration: is the last day on which the options can be exercised. 
• Strike: is the price you will sell (buy) the stock at.
• Order Type: Limit or market. Market means you will pay the best asking price around, Limit means you will only pay a certain price or better. I prefer limit orders because it is easy to know what you will pay.
• Limit Price: Is the maximum you are willing to buy/sell a stock or option for. 
• Duration: Either Day, meaning you will only buy/sell at that price for one day, or GTC, good till canceled, meaning you have to explicitly cancel the order.
• AON: All or none; if you check this all of your order must be executed at the specified price.

To actually execute an options trade I found you had to look up the options chains for that stock, which is step 1 circled in the picture below. You just enter the stock symbol and select the "options chain" link.

Step 2 is to select the option date and price you want. The default is the closet to expiring options, but you can select future months/quarters. I chose 19Jun2010. As you can see, the higher the strike price, the less money people are willing to buy the option for. Also, as you get closer to the expiration date, the cheaper the options sell for. Once you click trade, most of the boxes are filled in automatically at the top. I couldn't fill in some of the boxes on my own, so it makes me wonder how generic contracts get written.

Step 3 is to enter the type of transaction (Sell to Open) and the number of contracts. I'm only selling one for now, to make sure I really do understand the process and don't make a huge blunder.

Finally I previewed the order:

Expected Proceeds of $56.00. Nice. Now I just hope that F doesn't quite hit 13.00, and so I can sell it again next quarter.

I'm testing out the F-connect feature of Typepad, which should link my blog w/ my FB account.

Here is a question I pulled from yahoo answers. It caught my eye because its related to military matters and finance: I am reenlisting the the Air Force and receiving a $50,000 bonus. I do not pay any state taxes so I only want to know around how much I get to keep after taxes. I just returned from a combat zone and will not be going back for a long time. I couldn't reenlist overseas because I was just short of my window. Any help would do, but someone who has received the same or near the amount I am getting and could give me a rough estimate would help

Since he can't reenlist in a combat zone, the bonus is taxed at his normal rate, which means it depends on base pay, TSP savings, and how he gets the bonus. I'll make some assumptions here to show how it works.

Let's say you are single, E-4, have over 4 years of service, and no TSP contributions, which makes for a base pay of $2094/month or $25,129 a year. BAS and BAH are not counted since they are allowances. Special pays and bonuses are taxed, so you just have to figure it out what your expected income is for the year.

This year the 15% tax bracket is between $8,350 to $33,950, and the 25% bracket is between $33,950 to $82,250. (you can find these on page 101 of the i1040 pdf.)

You get roughly $10,000 in exemptions and deductions if you are single with no dependents, which makes your starting taxable income about $15,000, which means you start in the 15% bracket and each additional dollar is taxed at that amount until you exceed that bracket.

If you get your full bonus this year, the first $19,000 will be taxed at 15% so your tax will be $2850
($15,000 regular income + $19,000 bonus = $34,000 limit on 15% bracket)

Your remaining $31,000 bonus will be taxed at 25%, so you will owe $7750 on that part.

Including Social Security & Medicare @ 7.65%:  $3825

Your total tax liability is $7750 + $2850 + $3825 = $14,400 in taxes.

In this scenario, taking your bonus over 2 or more years would save about $2000

I've been catching up on a number of finance blogs that I used to read quite regularly, and came across and interesting article from DoughRoller called "A Simple Yet Profitable Call Option Strategy". Much like DoughRoller, I haven't really considered dealing with options until now. Normally they are only good for two things:

• Managing risk in a portfolio.
• Wild Speculation.

When used to manage risk, you can do things like preserve value of your assets even if the market takes a steep dive. This is good for someone who has a short term need to persevere value such as an estate executor maintaining an inheritance for someones heirs or a trust fund for a minor. Since options used in this manner generally limit your upside gains and cost money that you usually will never see again, I have avoided them.

You can also use them to increase your leverage by making promises to buy or sell stocks that you don't actually own. Wild speculation like that gets many people in trouble with options because if you make good bet, you can win lots of money with very little down but if you bet poorly, you can lose more than you would think possible. For that reason options trading accounts have a little more stringent rules than your normal stock brokerage accounts. Anyone considering options trading should put more than due diligence into their research to understand the risks and rewards. This article on investopedia has a good overview of why people use options, but don't let their talk of rewards and risk management cloud your judgment. Options are not a long term strategy. 

I still remember and episode of "Saved by the Bell" where the class plays with stock portfolios during a lesson and Zack ends up selling the stock and buying potato futures on margin. When the potato market crashes, somehow he is left with a parking lot full of potatoes.

The third thing options are good for is generating extra income by selling options contracts on stock I already own aka, a "covered call". Basically I'm letting someone buy the right to purchase my stock at a particular price before a certain date. Since I'm inclined to sell some of my current stock anyway, I think writing options contracts and making a profit on the income is a win-win for me. Whatever happens I get the contract price. If the options expire without being exercised, I still have my stock. If the options are exercised and my stock gets sold, then I make a profit( or maybe take a loss?) that I was going to take anyway.

My preferred stock broker is Zecco.com because of their free trades. They don't have as many features as some of the more expensive brokers, but I don't really need those features for my basic stock trades. To make things simple I'll keep my options account with them as well.

  At Zecco

• Options fees are $4.50 + 0.50 per contract.
• You must complete an options agreement form, which is basically a risk assessment form followed by 2 pages of legalese, and mail it in to Zecco. You can do this anytime during or after account opening. 
• You will be given a level of 1,2,3, or 4 based on what you want to do and the risk Zecco feels comfortable taking on you. For my basic purposes I only need a level 1 clearance, but I'll apply for level 2 to "keep my options open"(haha).

Levels 3 and 4 require margin accounts, which is basically a line of credit or loan used for purchasing stock. It's another form of leverage. Level 4 requires a minimum account balance of $250,000 and allows the riskiest trades such as uncovered equity(naked) options where you do not own the stock you are promising to buy or sell.

I'm mildly annoyed that I have to snail mail the form in but I remember having to do that for my inital account opening as well. I guess I'm spoiled by the interent age and want instant gratification.