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Broker Reviews

optionsXpress

Published by
On Thursday, July 24th, 2014 .

Overview

While not the cheapest broker around for trading options, optionsXpress offers a well-rounded trade platform for both trading online and on-the-go.

Dislikes

Expensive minimums for options trades; Xtend desktop platform weak; no one-click login access to Charles Schwab.

Special Offer: $100 Cash with any New Account - Learn More

optionsXpress Review

optionsXpress is an online broker that leads by example. The broker separates itself from the competition with its variety of unique tools, as well as its ability to continuously innovate and focus on ease-of-use.

This successful formula has made it a popular spot for not only casual options traders but other investors as well, including regular equities and even futures. Because of its success, the broker was acquired by Charles Schwab (SCHW) in March of 2011.

In 2013, it was revealed that, ultimately, optionsXpress will be fully migrated into Charles Schwab and its doors would be closed thereafter. Charles Schwab is in a several-year process of porting over optionsXpresss best features and functionality while letting optionsXpress continue to operate as an independent broker and take care of its clients. There is no current timetable of when this process will be completed.

Commissions & Fees, Ease of Use

optionsXpress has its pros and cons as far as commissions go. Getting the negatives out the way, its options structure is hardly ideal for casual investors. The broker charges $1.50 per contract if below 35 options trades per quarter with a $14.95 minimum. Otherwise, it is only $1.25 per contract with a $12.95 minimum. 

This means that, even if you only trade a single option, the commission will be $12.95 at least. Comparatively speaking, one contract at tradeMONSTER would cost $12.50, TD Ameritrade $10.74, ETRADE $10.74, Scottrade $8.25, or OptionsHouse $5. The site, tools and ease-of-use are what you pay for in this case, whereas OptionsHouse provides a route to simply trade. Thus, it all depends on your specific needs as an investor.

Options aside, equity trades are an $8.95 flat rate, which is also the rate charged by parent company Charles Schwab. optionsXpress also offers mutual funds, bonds and futures trading. For a full breakdown of commissions and fees, follow the menu navigation button near the top of this page.

optionsXpressOptionsHousetradeMONSTERTD AmeritradeTradeStation
Stock Trade Fee (flat)$8.95$4.75$4.95$9.99$9.99
Options Base Fee$0.00$8.50$0.00$9.99$0.00
Options Per Contract Fee$1.50$0.15$0.50$0.75$1.00
Mutual Fund Trade Fee$9.95$9.95$15.00$49.99$14.95
Commissions & Fees

As far as ease-of-use is concerned, optionsXpress has clients covered. The broker's all-in-one trade ticket is the best available anywhere, the site design is clean, and optionsXpress is the only broker to organize all site tools by experience level and type on one page.

Lastly, optionsXpress offers what they call "Walk Limit" order types for options. To prevent adjusting limit orders as they sit live, optionsXpress will "walk" your order to try to get the most favorable price within the National Best Bid or Offer (NBBO). We awarded the Walk Limit Best New Tool in our 2013 Review today, the order type continues to thrive. Use has more than doubled in the past year and currently 7 to 8% of all eligible spread orders placed through the all-in-one trade ticket use Walk Limit.

optionsXpress walk limit order

Platforms & Tools

optionsXpress's flagship platform, Xtend, is offered in both desktop form and as individual tools on the website itself. Overall, the desktop version of Xtend is just okay. While it was very visually appealing, we found it to be sluggish speed-wise, and the charting was difficult to use, not to mention much weaker than what can be found elsewhere. 

Another aspect of the Xtend desktop platform we did not particularly care for was the layout, which forces preset sizes and limited numbers of windows. Tools can be popped out of the platform area, but in the end, it is a poor user experience. If there is one positive highlight, it is the trade ticket functionality, which we found to be a similar experience to the website.

optionsXpress xtend order

Speaking of the website, the tools and functionality here were much smoother. By clicking the "Toolbox" link within the main header of the website, clients are taken to a page that lists all available tools, their skill level and type. Some tools are basic iterations of licensed third-party services, the Chart Patterns tool for example, while others are more innovative and interesting, like Idea Hub.

Idea Hub is a scanning tool that quickly breaks down potential trade ideas based on current market activity. All trade ideas can then be assessed with profit & loss charts alongside probability charts, then moved to a prefilled trade ticket for order entry. The tool can also be found in all mobile apps.

optionsXpress idea hub

We also enjoyed the options analysis tools available. The Trade and Probability calculator whips up profit & loss charts alongside probability charts for any trades under consideration. Similar to Idea Hub, the Strategy Scanner is another useful options tool that generates trade ideas based on market outlook, risk and symbol.

optionsXpress options trade calculator

Other Notes

Despite optionsXpress being owned and operated by Charles Schwab, the two brokers remain independent. As a Charles Schwab client, you can log in and then utilize the OptionsXpress website, however as an optionsXpress client, you cannot access the Charles Schwab website without a Schwab account.

As far as customer service is concerned, clients do not need to worry. After nearly a dozen support tests across phone, email and live chat, we found optionsXpress to be very strong.

Mobile trading with optionsXpress is also a pleasant experience. The broker has apps for the iPhone, Android and iPad, as well as a mobile website. Besides ease of placing orders, charting was a big standout for us, as the broker supports 45 technical indicators/studies.

Closing Thoughts

Investors that are willing to pay more per options trade will receive ample functionality to justify the cost. optionsXpress is a high-quality offering across the board, likes to innovate with its tools and should only continue to thrive under the Charles Schwab corporate umbrella.


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

optionsXpress is an online broker with a more complex commissions structure. While known as one of the more pricey discount brokers, optionsXpress offers lower commissions rates for investors that trade more often on a per quarter basis. There are added fees though depending on the size of the order, amongst other situations. Details below.

Stock Trades - optionsXpress announced a new lower flat commission rate of $8.95 per trade for all clients on 11/29/11. There are no additional fees for broker assisted trades or for trading stocks under $1 per share (including OTCBB).

Options Trades - optionsXpress charges $1.50 per contract if under 35 options trades per quarter with a $14.95 minimum. Otherwise it is only $1.25 per contract with a $12.95 minimum. The broker does not charge a options base fee. Thus, based on the $1.50 per contract rate, a 5 contract order would cost $12.95 (the minimum) and a 20 contract purchase would cost $30.00 (20 x $1.50). Exercises and Assignments are an additional $9.95 for currently active options traders (see above for designation), and $14.95 for non-active options traders. To buy-to-close penny options (contracts under $.05), the rate is $4.95 + $.50 per contract.

Other Investments - optionsXpress also offers mutual funds, bonds, and futures trading. Mutual funds cost $9.95 per trade plus any additional loads or fees charged by the fund itself.

Trade Commissions Breakdown

$8.95 Stock Trade Fee (flat)*
N/A Stock Trade Fee (per share)*
$0.00 Options Base Fee*
$1.50 Options Per Contract Fee*
$0.00 Options Exercise Fee
$0.00 Options Assignment Fee
$9.95 Mutual Fund Trade Fee
$8.95 Broker Assisted Trades Fee
$0.00 Minimum Deposit

Margin Rates

8.25% Under $24,999.99
8.25% $25,000.00 to 49,999.99
7.25% $50,000.00 to $99,999.99
7.00% $100,000.00 to $249,999.99
6.75% $250,000.00 to $499,999.99
6.50% $500,000.00 to $999,999.99
6.00% Above $1,000,000.00

Miscellaneous Fees

$5.00 Bond Trade Fee
$5.00 Treasury Trade Fee
$0.00 CD Trade Fee
$0.00 IVR Trade Fee
$0.00 IRA Annual Fee
$50.00 IRA Closure FEe
$0.00 Forced Margin Sellout Fee
$20.00 Returned ACH Fee
$0.00 Returned Wire Fee
$500.00 Stock Certificate Processing Fee
$0.00 Stock Certificate Delivery Fee
$0.00 Paper Statement Fee
$0.00 Paper Confirmation Fee
$15.00 Domestic Wire Fee
$30.00 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

optionsXpress was awarded Best in Class for Options Trading. They also won the #1 Trade Ticket. Read the 2014 Online Broker Review.

2013

optionsXpress was awarded Best Trade Ticket and Best New Tool (WalkLimit order type), rated 4 stars for Customer Service and Ease of Use, and placed Top 5 for Options Trading. Read the 2013 Broker Review.

2012

optionsXpress was #3 overall with 5 stars and received Best in Class for Platforms & Tools, Research, Investor Community, Investor Education, and Options Trading. Read the 2012 Broker Review.

Offering of Investments

Yes Stock Trading
Yes Options Trading
Yes Mutual Funds
Yes Forex Trading
Yes Futures Trading
Yes OTCBB / Pink Sheets
Yes DRIPs
Yes After Hours Trading
0 Commission Free ETFs
0 Retail Locations
4400 Mutual Funds (Load)
6000 Mutual Funds (No Load)
0 Mutual Funds (NTF)
10400 Mutual Funds (Total)
4 Complex Options Max Legs
Self-clearing Clearing Firm
Yes No Inactivity Fees
Yes 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
Yes Fund Research - 3rd Party Reports
Yes Fund Research - Fees Breakdown
Yes Fund Research - 3rd Party Ratings
Yes Screener - Stocks
Yes Screener - ETFs
Yes Screener - Funds
Yes Screener - Options
Yes 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

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
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
Yes Desktop Platform
Mac Platform
Platform Backtesting
Trade Hot Keys
Yes Streaming Time & Sales
Yes 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 - Chains Greeks Viewable

Active Trading

Yes Internalizes Trades
Yes Receives Payment for Order Flow
Yes Direct Market Routing (Stocks)
Client Liquidity Rebates
3000 # of Easy to Borrow Stocks

Education

Yes Investor Dictionary
Yes Live Seminars
Yes Investor Community

Compare optionsXpress:



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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