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OptionsHouse Review: $3.95 Stock & Options Trades

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OptionsHouse Logo$3.95 a trade.

(Update 1/14/11: OptionsHouse recently increased their commission from $2.95 to $3.95)

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:
OptionsHouse Tools

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.

{ 34 comments, please add your thoughts now! }

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34 Responses to “OptionsHouse Review: $3.95 Stock & Options Trades”

  1. TJ says:

    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?

    • Jim says:

      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.

  2. Chuck says:

    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.)

  3. jillianlou says:

    How long have these people been around? Why haven’t we heard more about them?

  4. thomas says:

    wow, that is a really great deal. makes me nervous to understand how they can operate at such a low cost.

  5. Tom says:

    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.

  6. Saeed says:

    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

  7. Ed says:

    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.

  8. Andy says:

    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.

  9. matt says:

    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?

    • Eddie says:

      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!

  10. Ray says:

    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.

  11. george says:

    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…

  12. Harry says:

    I have used OptionsHouse for the last year and am very satisfied. I transferred my accounts from OptionsXpress, and get equivalent service at 66% savings for stock trades, and 40% savings for option trades.

  13. Michael says:

    I’ve been using OptionsHouse for the last 3 months and am extremely pleased. I transferred over from Scottrade because I wanted to be able to trade options (mostly writing covered calls and puts) in my R-IRA account. Scottrade currently will only allow the writing of covered calls in R-IRA accounts. $2.95 stock trades are super low, and since I don’t have a large balance, I am able to make options trades for $5 for up to 5 contracts.

    The interface is extremely intuitive. Case in point, OptionsHouse doesn’t use options symbols. The switch to the new option system was seamless for me because OptionsHouse already use a more intuitive system.

    I like the use of the virtual account. This is a nice feature for those like me who are new to options trading because I can place a planned order in my virtual account before placing it in my real account. This allows me to make sure I make the trade I think I am making without costly rookie mistakes.

    Customer service was very helpful the few times I called when transferring my account.

    The only negative I’ve found so far is that the research tools are very options specific and I do miss the S&P reports Scottrade provided. I’m just learning to use the options tools they offer and have watched a couple of the archived webinars they offer free of charge to explain how they work.

  14. Miles says:

    I am swithcing to optionshouse from ameritrade as I have recently started trading options and can’t stand ameritrade’s prices. I will miss S&P’s options picks and ford equity research reports. Any suggestions for research? Sites to replace?

    • Michael says:

      Hey Miles,

      I had similar concerns. Fortunately my Scottrade account remained open even after the transfer so I can still take advantage of their research reports. I suspect these companies leave transferred accounts open so that they can still count them as customers. Hopefully your Ameritrade account will do the same and you will have the best of both worlds.

      OptionsHouse does have a covered call tool that is pretty neat. I don’t use it much personally because I don’t trade options for the sake of trading options. I am trying to boost my return on stocks I already own by writing covered calls. It might be a tool you’ll use regularly though.

    • Alan says:

      consider other brokers, you will regrade it, read the review, their customer service sucks, they have no time to answer your question and they are rude, i mean really rude.

  15. Pete says:

    I had a really unpleasant with OH. Basically, there was a duplicate order when I was requesting electronic funding from my bank. Not only did I have to pay a NSF funds to my bank, but again had to pay a $30 fee to OH when they charged the duplicate order. In the end, any money I could have saved from their lower commission rate was offset by their unfair fee schedule, and problems with duplicate ACH processing.

    I anticipate that I will most likely be leaving OH in the near future, due to their substandard customer service, and their attitude towards customer satisfaction. I felt like they couldn’t care less, and it is no surprise after reading that so many above customers have had unpleasant experiences with OH. I have only made a handful of trades with OH, but cannot say that the experience was pleasant.

    I guess in the end, you get what you pay for; and with such low trading fees, they need to make money using any dirty tricks they can pull. BUYER BEWARE!!

  16. MK says:

    I tried to do business with OptionsHouse.

    The New Accounts Dept rejected an IRA beneficiary form for not having SSN for the beneficiaries. No problem, I had a new one witnessed and mailed to them the next day. Two days later, the Operations Dept, w/o any warning, email or phone call, emailed me that they were returning my IRA check. Even though I was in constant contact with their New Accounts Dept, and was told everything was fine, the Operations Dept obviously wasn’t in contact with the New Accounts Dept.

    A classic case of the right hand not knowing what the left hand was doing.

    But I really suspect OptionsHouse did me huge favor by giving me a preview of their customer service.

  17. bradford hunt says:

    I have traded an average of 365 contacts per month. With scottrade that amounted to 456.25 plus 7.00×20 trades for a total of 596.25 per month. with optionshouse its 8.95×20 plus .15 a contract for a total of 233.75 a month. Thats 362.50 per month in savings. I also get good fills at optionshouse.

  18. Rick says:

    Limted Extended Hours trading starts from 8.30 am to 9.30am ET and 4.00 pm – 5pm ET
    Can’t modify existing Order outside of tranding hours. We have to cancel and place the same order again from scratch.
    Have to call customer service to reset the buying power if you want to buy and sell and buy again.

    • JP says:

      Rick,

      Can you elaborate on the need to call to reset your buying power? That’s one of the problems I’ve been having with Sogotrade. They have constant buying power quoting problems that require multiple phone calls with long hold times. And then they dare suggest that they’ll call you back with an answer – which they often don’t do. I was thinking of switching to OptionHouse. How often do you have a problem with this? Do they answer questions and solve problems quick?

  19. Alan says:

    Worst customer service ever:
    they are very rude and have no knowledge to answer your question, i was with OH for a year and transfered to different broker, and never ever recommend them to any body.

  20. david davinci says:

    I agree worst customer service ……never will deal with them again….stupid website design …very slow

  21. Jim says:

    I tell you they have a extremely poor customer service. I mean Bad. They hang up on you. I can’t even tell you how bad. Listen I have Scottrade and Options House. Scottrade is a flat rate $7.00 for everything and most mutual funds are free. Scottrade has a great customer service. They really try to help you

  22. john w says:

    Tho offering discounted execution fees, OptionHouse has a very, very long way to go to compete with the premier discount brokers. Rather than attempting to roll out new phone apps, OptionsHouse should concentrate on resolving pnl reconciliation to total account value and intrday trading pnl calculations. It is impossible to tie any given day’s position pnl and trading pnl to the overall account value. You have no idea how to account for your money.

  23. tay says:

    Just tried to buy stock at optionshouse and got commission charges of anything but $3.95. Tried calling customer service, guy I spoke with was brusque and not particularly helpful. Now I’m trying to figure out how to get my money back.

  24. BrianC says:

    I had an account at OptionsHouse, and I found the interface less intuitive than TradeKing or TD Ameritrade. Probably better for the more active trader, but if that’s not you I’d look elsewhere.

  25. Bill T says:

    DO NOT PUT YOUR MONEY HERE! I don’t know where to start with this online broker. The customer service here is awful. I have been a customer here for a couple of years and it has only gotten worse. I consider myself an active trader and make 20 trades per week. The brokers here are not properly trained or educated with margin trading, trading rules, order execution and options in general. They have EXCESSIVE hold times when you try to call in and talk to someone. I have tried a few times in the past week and was on hold for at least 30 minutes +. This is unacceptable and the manager who is in charge obviously does not care. I have tried to get a hold of this company and asked to speak to a supervisor and they always say that no one is available. They are in clear violation of rules. They also get payment for their order flow from the market makers and exchanges that they route their orders too. That is why many have previously said that their order execution is awful. I also have an account at ETrade and their orders route a lot quicker. OptionsHouse has a horrendous trading platform and is very outdated. Their charting is also horrible. I learned the hard way being here. Don’t waste your time with this company.


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