OptionsHouse was acquired by E*TRADE in 2016

OptionsHouse Overview

OptionsHouse may be a discount broker, but it combines low-cost prices with world-class speed and sophisticated trading tools. In Barron’s 2015 review, OptionsHouse came out second: behind Interactive Brokers and above TD Ameritrade. In 2016, OptionsHouse was rated best for options trading.

It has dirt cheap commissions, no account minimums, and an industry-leading fee schedule. All of which make it a no-brainer for fee-conscious options traders.

On the other hand, it doesn’t have all the bells and whistles when it comes to educational material or charting tools, and neither does it offer commission-free ETFs or transaction-fee-free mutual funds.

OptionsHouse became a heavy-weight in online trading in 2014 when it merged with TradeMonster. The resulting company combined the best features of both brokers: the low prices of OptionsHouse and the advanced trading tools of TradeMonster.

What You Will Love About OptionsHouse

No account minimum: There is no minimum to keep the account active. Neither is there a penalty for dropping below a certain dollar amount, which is rare. You do need $100 in your account to get access to free real-time market quotes. But other brokers will charge you for access to data, so you can’t call it a penalty.

No penalty maintenance fees: Unlike most brokers, OptionsHouse does not penalize brokers who don’t make a minimum number of trades per year or month. Again, this is rare among brokers like OptionsHouse that mainly cater for active traders.

Allows trading of stocks, bonds, mutual funds, ETFs, options, and futures: Even though it specializes in options, OptionsHouse provides access to most trading instruments. Foreign exchange investments are the exception. If this matters to you, go with online traders like OptionXpress and Interactive Brokers that do offer forex investments.

Promotion of 60 days of commission-free trading: This gives traders the chance to test-drive OptionsHouse’s tools and services without paying a cent.

Professional grade tools: As a low-cost broker, OptionsHouse does cut corners with non-essential aspects of its platform, but not when it comes to trading tools. OptionsHouse is well-known for its fast and reliable trading platform. The TradeLAB is a favorite among investors. It allows traders to calculate profit-loss-breakeven points easily and play out any number of scenarios by using current stock price and volatility.

What You’ll Miss

Commission-free ETFs: Although OptionsHouse is by no means alone when it comes to avoiding commission-free ETFs, ETF traders who are cost-conscious may want to go with other brokers, such as USAA, that do offer commission-free ETFs.

Mutual funds: OptionsHouse has one of the cheapest fee schedules in the industry, but its $20 mutual fund fee is just average. If you trade often in mutual funds, $20 a pop can add up pretty quickly.

What Are OptionsHouse’s Fees and Commissions?

- $4.95 for stock trades. Scottrade charges $7, and E*TRADE charges $9.99

- $4.95 for options with an addition $0.50 charge per contract

- Margin rates range from 4.50% (>$25k) to 3.25% (> $1 million)

- $25 for Outgoing Wire Fees (Domestic)

- $25 Brokers Assist Fee

- $20 per trade for mutual funds

(Click on the link above for a complete list of fees)

The Bottom Line

OptionsHouse is a top choice for active traders (particularly options traders) looking for a fast and effective platform loaded with sophisticated trading tools at a discount price.

  • Asset Class
    • Stock
    • Option
  • Min Margin Acct
  • Automated Trading Strategy
  • Dividend Reinvestment
  • Research and Reports
  • Online Trade
  • ETF Trades
  • Option Trades
  • Margin Rate
  • Broker Assisted Trading Fee
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Worst ever. I lost $$$ on a deal because the platform f$%ked up and told me that I owned shares that in actuality, I did not.

The market sale went through, but the order window kept saying it was "pending" and in a "market to close". This was on an instrument that trades 25 million shares/day. I've traded on other platforms and this ETF ALWAYS goes immediately on a market order. For 5 minutes, it showed that I had these shares that I actually did not. Obviously, I was confused. ... I logged out thinking it might clear everything, but the shares were still posted. I tried cancelling and placing the order again (yes, I know markets go instantly to market, but I was at a loss for what was going on.) It was not until 30 minutes later that the correct information appeared. I have traded long enough to know that this was an error with the system, not my order that was placed. These ETFs do not sit in a holding pattern waiting to be purchased. They go IMMEDIATELY, EVERY TIME. 5 years of trading these. Never happened once with any other brokerage.

So, I hedged with the ETFs inverse to hold my balance since it was showing that I owned the original - which I did not. The hedge order went through, no problem, of course.

Customer service couldn't care less. They refused to reimburse my losses that occurred with my perceived "hedge." They did not apologize and refused to admit that it was their almighty system that had a malfunction. It also was not the first malfunction I've experienced. It does odd things, times out, rejects "market on close" orders 20-30 minutes before the close for no reason. I guess the warning signs were there beforehand. Should have left months before.

Rude people. Crappy software. I transferred my $, closed my account and will not recommend it to anyone. Much better "options" (pun intended) out there.
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