IMPORTANT NOTICE: As of January 21, 2015 trade commissions are now $4.95 flat fee stock trades and options trades are $0.50 per contract + $4.95 base fee.
OptionsHouse is a discount broker backed by Peak6 investments, one of the largest options-trading firms in the U.S. OptionsHouse makes its mark in the discount trading space by providing clients with multiple options trading tools and competitive commission rates for options traders.
The OptionsHouse 2.0 platform is the broker's key to client success because it makes trading straight-forward. Like most discount brokers, OptionsHouse only utilizes a web-based platform and does not offer a desktop counterpart, typically reserved for the most demanding of traders.
Commissions & Fees
Cheap and no-gimmick trading is a vital part of the OptionsHouse experience, and they deliver with flying colors. All stock trades are $4.75, and orders only will be charged differently if they are OTCBB, less than $2 per share, or if the order is more than 50,000 shares in total size.
As far as options trading goes, two commission plans are available. The first is designed for less frequent traders, with single-leg options costing $5 for up to five contracts, with any additional contracts costing $1 each. Active options traders will prefer the second plan, which is $8.50, plus $.15 per contract for single- leg orders. And for spread trades, clients also have two options: up to 10 contracts for $10 ($1 for each contract thereafter) or $12.50 plus $.15 per contract. Plans can be changed on a daily basis through the platform.
For those that favor mutual funds over stocks and options, take note. While OptionsHouse supports more than 11,000 mutual funds, only around 3,000 of them can be traded via the platform. Even with a low $9.99 fee per mutual fund trade, I found this to be an inconvenience.
Out of the primary areas for grading a broker, research is where OptionsHouse fares worst. The broker offers no research whatsoever for mutual funds or ETFs, and lacks any third- party reports.
Pulling up a quote of any stock will bring up a basic page of information, including a stock chart, news, a quick bio about the company, events calendar, and a summary of analyst opinions, among other notes. On the whole, everything is very basic, and the analysis even lacks free financial research that hubs such as Yahoo Finance offer.
On the positive side, I was impressed by the technical analysis pages provided for each stock. Short-term trends, long-term trends, options statistics, stops, trading signals, and a summary of bullish, bearish, and non-directional events can all be viewed. Clicking the trading strategies sub tab also gives you an overview of close to a dozen strategies, including explanations, which was both educational and useful for considering potential trade ideas.
This one positive was as far as it went, however. For investors who desire quality research of stocks, ETFs, and mutual funds, your portfolio is best kept elsewhere.
Platforms & Tools
OptionsHouse uses a completely browser-based platform. The most current version, OptionsHouse 2.0, is a significant improvement over its predecessor.
The highlight feature of the platform is the all-in-one order ticket, which is always ready to go via a button in the footer. What makes the order ticket so unique is that placing both stocks and options trades is done via legs. During the first run-through I was slightly confused, but after a few trades, I got the hang of it and quickly became a fan.
The tools offered through OptionsHouse 2.0 are primarily options-focused, which is expected considering the influence of Peak6. Options tools include Spread Investigator, Trade Generator, Risk Viewer, PNL Calculator, Probability Calculator, and Volatility Charts. What's nice is that these tools appeal to all different skill levels.
The Trade Generator, for example, is great because of its simple functionality, the variety of trade possibilities generated with each run (a search for bullish Apple strategies yielded covered calls, credit put spreads, debit call spreads, long calls, and short puts), and the ability to quickly place trades with pre-populated ticket links.
While OptionsHouse offers a wide selection of option tools, this is also an Achilles heel for the user experience. For example, both the PNL Calculator alongside the Probability Calculator tools are third-party provided by IVolatility. Because of this, conducting analysis on theoretical positions is tedious and hardly a seamless experience for the client to research then trade.
Of the stock trade tools offered by OptionsHouse 2.0, I found the streaming charts that were updated in 2013 to be a big improvement over the previous version. On pros side, they get the job done because investors can easily stream whichever stocks they'd like in real-time and adjust basic settings. On the cons side, advanced traders will be unimpressed with the lack of markup tools, limited depth of advanced studies available, and sluggish speed when panning.
OptionsHouse is one of those brokers that is great for investors who know what they want, and more importantly know how to maximize the best of what is offered while shrugging off the negatives.
After thorough testing of OptionsHouse, I feel the broker is great for options and discount trading, and with time should only become a better all-around broker. This is especially true if it can put some emphasis on keeping its option tools relevant and continuously improving the client experience.
Blain has been involved in the markets for over 12 years, heading StockBrokers.com equity broker research and reviews. His personal blog, StockTradingToGo.com, provides to-the-point daily market recaps to over 17,000 subscribers.