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Broker Reviews

OptionsHouse

Published by
On Tuesday, July 8th, 2014 .

Overview

OptionsHouse delivers with ultra-competitive commissions for options traders and an easy-to-use platform.

Dislikes

Not all mutual funds can be traded via the platform; use of third-party services for options analysis tools.

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OptionsHouse Review

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.

OptionsHouseTradeKingtradeMONSTERInteractive BrokersJust2Trade
Stock Trade Fee (flat)$4.75$4.95$4.95N/A$2.50
Stock Trade Fee (per share)N/AN/AN/A$0.01N/A
Mutual Fund Trade Fee$9.95$9.95$15.00$14.95$2.50
Options Base Fee$8.50$4.95$0.00$0.00$2.50
Options Per Contract Fee$0.15$0.65$0.50$0.70$0.50
Broker Assisted Trades Fee$4.75$20.00$15.00$30.00$2.50
Commissions & Fees

Research

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.

optionshouse trading strategies

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.

optionshouse order ticket

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.

optionshouse trade generator

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 charting

Final Thoughts

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 Reinkensmeyer

Reviewed by

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.

Commission Notes

OptionsHouse is an online broker with fairly straight forward commission offerings.

Stock Trades - OptionsHouse's flat rate stock trade commissions of $4.75 are among the cheapest of any current online broker. If trading stocks under $2.00 that are not options eligible, an additional $.005 per share will be charged. This same $.005 per share rate is also applied to any OTCBB (pink sheet) stocks. The $4.75 rate applies to any sized order up to 50,000 shares. If over 50,000 shares then the order will be split into two or more and an added $4.75 commission will be charged for each 50,000 shares.

Options Trades - OptionsHouse utilizes two different commission plans for options trades. The first is a plan is designed for less active investors, costing $5 for up to 5 contracts. There is a $1 additional fee per contract for any sized order over 5 contracts. The second plan revolves around a $8.50 base rate with a $.15 per contract charge. Active investors will find this second plan to be very appealing due to its low per contract charge. There is an additional $5.00 fee for each exercise or assignment in a given position. If trading options in SPX, VIX and OEX amongst several others, there is an additional fee of $.35 per contract to offset exchange fees.

For spread trades, clients also have two options: up to 10 contracts for $10 ($1 for each contract thereafter) or $12.50 + $.15 per contract.

Other Investment Types - OptionsHouse also offers mutual fund trades for $9.95 per trade. Note though, most mutual fund trades must be placed with a trade specialist via phone and cannot be made through the platform. There is no additional fee for this service.

Trade Commissions Breakdown

$4.75 Stock Trade Fee (flat)*
N/A Stock Trade Fee (per share)*
$8.50 Options Base Fee*
$0.15 Options Per Contract Fee*
$5.00 Options Exercise Fee
$5.00 Options Assignment Fee
$9.95 Mutual Fund Trade Fee
$4.75 Broker Assisted Trades Fee
$1,000.00 Minimum Deposit

Margin Rates

4.00% Under $24,999.99
4.00% $25,000.00 to 49,999.99
3.00% $50,000.00 to $99,999.99
3.00% $100,000.00 to $249,999.99
3.00% $250,000.00 to $499,999.99
2.25% $500,000.00 to $999,999.99
1.50% Above $1,000,000.00

Miscellaneous Fees

$9.95 Bond Trade Fee
$0.00 Treasury Trade Fee
$0.00 CD Trade Fee
$0.00 IVR Trade Fee
$0.00 IRA Annual Fee
$20.00 IRA Closure FEe
$0.00 Forced Margin Sellout Fee
$30.00 Returned ACH Fee
$30.00 Returned Wire Fee
$75.00 Stock Certificate Processing Fee
$30.00 Stock Certificate Delivery Fee
$2.50 Paper Statement Fee
$0.00 Paper Confirmation Fee
$15.00 Domestic Wire Fee
$50.00 International Wire Fee

Broker Ratings

Overall
Commissions & Fees
Ease of Use
Research
Platforms & Tools
Customer Service
Mobile Trading
Offering of Investments
Education

Broker Awards

2014

OptionsHouse was awarded Best in Class for Commissions & Fees, Active Trading, and Options Trading. Read the 2014 Online Broker Review.

2013

OptionsHouse finished #1 for Options Trading and #4 for Active Trading, was rated 4.5 stars for Commissions & Fees as well as Ease of Use. Read the 2013 Broker Review.

2012

OptionsHouse was Best in Class for Commissions & Fees, Ease-of-Use, and Options Trading. Read the 2012 Broker Review.

Offering of Investments

Yes Stock Trading
Yes Options Trading
Yes Mutual Funds
Forex Trading
Futures Trading
Yes OTCBB / Pink Sheets
Yes DRIPs
Yes After Hours Trading
0 Commission Free ETFs
0 Retail Locations
7526 Mutual Funds (Load)
4341 Mutual Funds (No Load)
0 Mutual Funds (NTF)
11867 Mutual Funds (Total)
4 Complex Options Max Legs
Apex Clearing Clearing Firm
Yes No Maintenance Fees
No Minimum Deposit
Yes No Fee IRAs
Yes Broker Assisted Trades

Research

Yes Mutual Funds Research
Yes Pink Sheets / OTCBB Research
Fixed Income Research
Global Market Overview
Yes Equity Research - SEC Filings
Yes ETF Research - Top 10 Holdings
ETF Research - 3rd Party Reports
Fund Research - Strategy Overview
Fund Research - 3rd Party Reports
Fund Research - Fees Breakdown
Fund Research - 3rd Party Ratings
Yes Screener - Stocks
Screener - ETFs
Screener - Funds
Yes Screener - Options
Screener - Bonds

Banking

Checking Accounts
Savings Accounts
Credit Cards
Debit Cards
Mortgage Loans
Retail Locations
No Fee Banking
Mobile Check Deposit
ATM Fee Reimbursement

Customer Service

Yes Phone Support
Yes Email Support
Yes Live Chat (prospect clients)
Yes Live Chat (current clients)
24/7 Support

Recommended For

Yes Best in Class Commissions & Fees
Best in Class Platforms & Tools
Best in Class Research
Best in Class Customer Service
Best in Class Ease of Use
Best in Class Investor Education
Best in Class Mobile Trading
Yes Best in Class Active Trading
Yes Best in Class Options Trading
Best in Class New Investors

Mobile Trading

Yes iPhone App
Yes iPad App
Yes Android App
Yes Mobile Site

Platforms & Tools

Yes Virtual Trading
Yes Web Platform
Desktop Platform
Mac Platform
Platform Backtesting
Trade Hot Keys
Streaming Time & Sales
Level 2 Quotes
Streaming CNBC TV
Yes Sitewide Real-time Quotes
Yes Watchlist Streaming Real-time Quotes
Yes Options - Chains Basic View
Yes Options - Chains Spreads View
Yes Options - Greeks Analysis

Active Trading

Internalizes Trades
Yes Receives Payment for Order Flow
Direct Routing (Stocks)
Client Liquidity Rebates
4129 # of Easy to Borrow Stocks

Education

Yes Investor Dictionary
Live Seminars
Investor Community

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All pricing data was obtained from a published web site as of 04/07/2014 and is believed to be accurate, but is not guaranteed. The StockBrokers.com staff is constantly working with its online broker representatives to obtain the latest pricing data. If you believe any data listed above is inaccurate, please contact us using the link at the top of this page. * For stock trade rates, advertised pricing is for a standard order size of 500 shares of stock priced at $30 per share. For options orders, an options regulatory fee per contract may apply.

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