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OptionsHouse Review: $2.95 Stock & Options Trades
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$2.95 a trade.
That’s how much it’ll cost you to make a trade at OptionsHouse.
That’s pretty cheap. TradeKing is currently my go-to broker and they charge $4.95 a trade, 67% more than OptionsHouse. Zecco, which is free if you meet their stringent requirements, is the only one that’s cheaper and they can never seem to get their customer service issues resolved.
They’re another one of those brokers that started as a options trading brokerage and soon moved into regular stocks. TradeKing and OptionsXpress are two other popular brokers that made that move too.
Background
OptionsHouse is member of SIPC, which means your investments are protected by SIPC insurance up to $500,000 and $100,000 of it can be in cash, and they have excess SIPC Insurance of $200,000,000 in aggregate across all customer accounts. They were founded by PEAK6 Investments, L.P., an options-trading firm and they claim to be one of the largest in terms of volume.
Prices
I’ve already mentioned the $2.95 stock trades, which is one of the cheapest around, but what about options trades? OptionsHouse’s $9.95 flat-rate is competitive with many other discount brokers and beats all the full service ones. OptionsXpress’ charges $12.95 and TradeKing charges $4.95 plus $0.65 per contract. What’s interesting about OptionsHouse is that their price is a flat-rate, whereas most others charge a base fee plus a smaller fee for each contract.
Tools
I don’t have an account there so I can’t do any further digging but their tools all appear to be very options-centric:
You can watch a video tour of the site here. One quick warning, it auto-plays so watch the volume on your computer. Also, a look at the tools starts about 35 seconds in of the three and a half minute video.
Awards
In terms of awards, which I don’t think is ever a good way to judge a bank, OptionsHouse recently was awarded four and a half stars by Barrons and considered the best for options traders. They beat out thinkorswim, optionsXpress, E*Trade, and Charles Schwab. From the article:
As its name suggests, OptionsHouse has a lot of great tools for the options trader. Backed by market maker PEAK6, this broker lets its retail customers use quite a few professional-level tools. Building a spread is very intuitive on this system, as is rolling a call or put from one strike to another. The site’s motto is ‘Fast matters,’ and that goes for everything from finding possible trades to populating an order ticket to executing the trade itself.
It’s spawned a discussion on Fatwallet with a handful of people stating they’ve been happy with the service. People have reported good experiences with their customer service (one person even calling out Zecco) and calling it a good alternative to Scottrade. As more people use the service, that thread will likely grow with more anecdotes and opinions.
Have you used OptionsHouse? I’ve been looking to get more into options trading so I’d love to hear your feedback if you’ve used OptionsHouse.
{ 13 comments, please add your thoughts now! }
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 Stumble It! Bookmark reddit.comTags: OptionsHouse, optionsXpress, Stock Market, Stock Options, TradeKing, Zecco Jun 23, 2009 | Read more in Investing |
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I am more interested in investing in mutual funds, etf’s etc which are no load no transaction fee. What discount brokerage has the broadest range of Mf’s and ETF’s with attractive fees/trade prices?
Any broker will have a broad range of ETFs because they’re traded just like stocks, so I would check out my best discount brokers list.
As for mutual funds, I recommend that you try to find out which funds you want and open an account at the broker that offers them. Fidelity and Vanguard have the cheapest index funds, so if you want one of those you should open an account with them because you pay no commission on those funds. We own only Vanguard mutual funds and do so through a Vanguard account, letting us buy and sell shares at no cost. Vanguard, however, makes for a very expensive broker when it comes to buying stocks because the prices are so high.
Options House is my go-to broker, and has my whole taxable retirement fund. The primary reason is the low margin rate. I can borrow against my brokerage assets at only 4.45%. This is cheaper than a home equity line of credit. For quick borrowing to solve short-term cash flow issues, it can’t be beat. The flat fee on options trades is great, too. For anything more than 5 contracts, it’s cheaper than every other broker.
For reasons stated, Vanguard is my go-to mutual fund house. I prefer vanguard mutual funds and have an account with vanguard to avoid transaction costs. However, for liquidity reasons, I also hold some Vanguard ETFs in my Options House account. (You can’t borrow against mutual funds in a mutual fund account.)
How long have these people been around? Why haven’t we heard more about them?
wow, that is a really great deal. makes me nervous to understand how they can operate at such a low cost.
I use Optionshouse for my options trades. Optionshouse has a huge benefit in that they do not charge for contracts. This becomes an issue as you trade large quantities of options. I trade 100 contracts or more. The cost for a round trip buy and sell is about $20 commission. Tradeking, which would appear to be cheaper at about $10 commission, charges $0.65 per contract. That costs you $130 to do the same trade. Obviously, it is a no brainer.
I use Zecco but will go with Option house soon
I like the ease of the software and how it is customizable, just testing it with a vertual account now befre I do the full switch, I wish I can afford to do 100 contract like tom for now 5 or 6 will do the trick
I’ve been trading with Optionshouse for about two years and trade roughly 10,000 contracts annually. Thus, their flat-rate commission saves me thousands!
Their platform is superb as is their customer service. The only negative I’ve found is that their multi-legged trades don’t fill well. So, I usually trade them in multiple tickets.
Optionshouse seems interesting…I too am currently at Zecco, and starting to trade more and want to make sure I am doing everything I can to maximize profits and minimize loss. Thanks for the reviews and comments, I will take a look at optionshouse.
i’m interested in using optionshouse but am concerned about their low commissions. i’ve read that they make up for their low fees with unfavorable fills. has anyone experienced this? how can we find out about this?
Matt…OptionsHouse is the best for trading options. I’ve been with OptionsHouse for 7 months. I’ve never experienced unfavorable fills. Call customer service at OptionsHouse for additional information. Lastly, mobile is now up and running!
I´m using Option House and their Virtual FREE Account for some practice. Figure I will move into real CASH about March.
Got friends across the border in Guatemala want to do the same, but they need foreign accounts, with W8 form and I.D. number. Unfortunately they (Option House) do not currently handle foreign traders.
It´s okay! I use Big Charts as my decision making platform, but Option House to do the trade. Down here we have slow dial up internet, which makes their platform slow loading, but since I´m only interested in their order forms and account information and occasionally the option chain, the service is working for me. I don´t do day trading, so speed is not that important.
“Amateur OEX Adventure in trading options” ( url ) I´m looking forward to cash trading. Spent two months paper trading and made 64% on capital. If I can do the same with their online option trading service VIRTUAL TRADING will move into real cash. If I´m lucky, about March.
you can fine the answer to the question of how they can offer such cheap rates by looking at the multiples offered for Options Express or thinkorswim. Presumeably, online brokerage firms can be extremely profitable ventures, and it looks like OptionHaus’s business model is to trade some of upside for market share. A business model that chooses low prices and positive word of mouth rather than a Madison Avenue advertising budget should be supported…