I had the pleasure of using OptionsHouse as a broker for well over a year. As a light volume options trader and investor, I found their products and services to be some of the best. Heavy option traders would benefit even more from an OptionsHouse account.
OptionsHouse Commissions and Fees
Where OptionsHouse stands out from the competition is in their commission and fee model. The company was one of the first to target high-volume options traders with low, per-contract trading fees.
OptionsHouse offers two different solutions for options traders:
- Trade up to five contracts for $5, with each additional contract costing only $1.
- Trade as many contracts as you want at $8.50 flat plus $.15 per contract.
Options traders should see quite quickly how the second selection is very favorable for high-volume, out-of-the-money orders. An investor would pay only $158.50 to trade 1000 contracts, which is the equivalent of 100,000 shares of stock. OptionsHouse will process trades of up to 4000 contracts. Larger transactions would require two trades.
Other brokers only begin to compete with OptionsHouse on price once trading volumes run in excess of 100,000 option contracts per month.
Stock and Mutual Fund Commissions
OptionsHouse isn’t necessarily a go-to shop for stock trading, but the company does compete with favorable trading costs. OptionsHouse commissions for stocks and exchange-traded funds are set to a tiny $3.95 commission per trade.
Stocks priced at less than $2 per share, as well as companies that are not options eligible require a $.005 (half-cent) surcharge per share, per trade. OptionsHouse processes trades with a maximum of 50,000 shares per trade.
Mutual fund investors will want to look elsewhere. The company charges a hefty $9.95 commission for trading mutual funds. Most brokerage companies now waive this fee for clients. OptionsHouse, which caters more to the active investor, does not subsidize mutual fund trading costs to win over customers.
OptionsHouse does offer a few freebies for their clients. The company provides all of the following for free:
- Streaming quotes – Streaming services can cost up to $25 per month with some discount stock brokers.
- DRIPs – Set up an automatic dividend reinvesting plan for free. (The company will not allow for partial share purchases, however.)
- Free IRA brokerage accounts – IRA accounts are not met with a monthly or annual surcharge. (Special Offer: 100 FREE Trades for new IRA accounts)
- Free check writing services – I never used this service; however, traders have the ability to draw checks straight from their account. The first 40 checks are free. Additional checks are $10 for 100, which is surprisingly less expensive than my credit union!
The Trading Platform
OptionsHouse differentiates itself with its own proprietary trading platform. While it is unique to OptionsHouse, it isn’t all that different from other, web-based platforms at other online brokerages. The platform can be heavily customized, allowing for a variety of different views for streaming quotes, and multiple options chains.
You can tell the company really caters to option traders from a quick glance of the platform. A drop-down menu allows you to place option trades based on varying strategies including credit and debit spreads, covered calls, straddles, time spreads, and more.
Speed defines the platform. Frequent and fast traders will appreciate the fact that there are at least 5 ways to do just about every command. Look to the top of the platform to enter a trade. Or, select a single contract off the streaming options chain quotes to enter an order immediately. There is a learning curve to the platform and its quick functions, but traders who can use Microsoft Word should be able to manage this trading platform.
OptionsHouse has always been a firm for the active trader. As the company competes for a larger cross-section of the retail trading marketplace, it continues to lower trading commissions. The company also earns high marks from reputable financial publications like Smart Money and Barrons – I don’t think it a year has gone by that the firm hasn’t improved on its rankings.
Mutual fund traders should go elsewhere. But for those looking for low-cost stock and option trades, OptionsHouse blows away the competition. A $1,000 minimum initial investment to open an account is one of the lowest in the market for online discount brokers.
To find out about all the special sign-up offers, visit OptionsHouse.com.