UPDATE February 16th, 2016 – For an updated review of optionsXpress (part of Charles Schwab), please see our Charles Schwab Review
The content portion of this Review was completed on February 17th, 2015.
optionsXpress is an online broker that leads by example. The broker distinguishes 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 not only for casual options traders but also for other investors, including regular equities and even futures traders. Because of this broker’s success, it was acquired by Charles Schwab (SCHW) in March 2011.
In 2013, it was revealed that eventually optionsXpress would be fully integrated into Charles Schwab and its doors would be closed thereafter. Charles Schwab is in a several-year process of porting over optionsXpress’s best features and functionality, while letting the company continue to operate as an independent broker and take care of its clients. As of January 2015, no exact timetable had been set as to when this process would be completed.
Commissions & Fees
optionsXpress has its pros and cons as far as commissions go. Getting the negatives out of the way, its options structure is hardly ideal for casual investors. The broker charges $1.50 per contract if there are less than 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 would be at least $12.95. Comparatively speaking, one contract at TD Ameritrade would cost $10.74, ETRADE $10.74, Scottrade $8.25, and OptionsHouse $5.45. The site and tools are what you pay for in this case. Thus, it all depends on your specific needs as an investor.
Options aside, equity trades are on a $8.95 flat rate, which is also the rate charged by parent company Charles Schwab. Furthermore, 182 commission-free ETFs are made available (via commission rebate) thanks to 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.
|Stock Trade Fee (per trade)||$8.95||$4.95||$4.95||$0.00||$0.00|
|Options Base Fee||$0.00||$4.95||$4.95||$0.00||$0.00|
|Options Per Contract Fee||$1.50||$0.50||$0.50||$0.65||$0.50|
|Mutual Fund Trade Fee||$9.95||$20.00||$15.00||$49.99||$14.95|
|Commissions & Fees|
Ease of Use
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.
In 2014, the broker launched IRIS, a notifications assistant for all accounts. IRIS is an eye icon that rests in the upper right corner of the client’s website. It displays accounts alerts, trade notifications, and tools updates. Clicking the eye icon will take you to the IRIS Notification Center, where customizations can be made and notifications filtered.
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” order type the Best New Tool in our 2013 Review. Today, the order type continues to thrive, as it is now customizable and available in mobile.
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 charting available 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.
Speaking of the website, the tools and functionality here were much smoother. By clicking the "Toolbox" link within the website’s main header, clients are taken to a page that lists all available tools, their skill level, and type. Some tools, such as the Chart Patterns tool, are basic iterations of licensed third-party services, while others, such as Idea Hub, are more innovative and interesting.
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 and 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.
We also enjoyed the options analysis tools available. The Trade and Probability calculator whips up profit and loss charts alongside probability charts for any trades being considered. Similar to Idea Hub, the Strategy Scanner is another useful options tool that generates trade ideas based on market outlook, risk, and symbol.
Although Charles Schwab owns and operates optionsXpress, 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 numerous support tests across phone, email, and live chat, we found optionsXpress above the industry average for overall quality.
Mobile trading with optionsXpress is also a pleasant experience. The broker has apps for 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.
Investors willing to pay more per options trade will receive ample functionality to justify the cost. optionsXpress is a high-quality offering in nearly every area except its active trader platform Xtend. optionsXpress likes to innovate with its tools and is likely to continue thriving under the Charles Schwab corporate umbrella.
That said, clients should understand that in the next several years, optionsXpress will eventually be shut down. The best of what optionsXpress has to offer is being integrated into the Charles Schwab experience, and the final product will be better for it. Clients migrating to Charles Schwab can rest assured they will be in very good hands.View all optionsXpress Fees & Features
About the author: Blain Reinkensmeyer As Head of Research at StockBrokers.com, Blain Reinkensmeyer has 18 years of trading experience with over 1,000 trades placed during that time. Referenced as a leading expert on the US online brokerage industry, Blain has been quoted in the Wall Street Journal, The New York Times, Forbes, and the Chicago Tribune, among others.
*optionsXpress was not included in the latest annual review, as a result this data may not be up to date.