Online Brokerages I Use: OptionsHouse Review

Options House Review

OptionsHouse is a solid brokerage to consider if you’re looking for a low-cost option to the more traditional online brokerage. OptionsHouse is also a great brokerage to look at if you’re interested in investing in options or are an active trader. Since I’ve been a client of theirs for the past two years, I thought an OptionsHouse review would be in order to share about my experience with them.

Open an account with OptionsHouse today and get 100 commission free trades!

I’ve reviewed other brokerages in the past, like with my Scottrade review and today I bring you my OptionsHouse review which is the other main platform I use alongside Scottrade to manage the investing needs of my family.

As I have said before, I love talking about investing in the stock market, especially with beginners. As I have worked in the market space for a number of years I have seen what many regular investors bring to the table and often times it boils down to education and needing assistance in terms of how to best determine what direction they should go. I am passionate about sharing my knowledge with others so they can make informed decisions about investing in stocks and more importantly, wisely investing for their future. That said, I opened a Rollover IRA with OptionsHouse about two years ago and have had a great experience with them so far.

Looking for another brokerage option? Check out my OptionsXpress review for another solid low cost brokerage.

As I’ve said in the past, there are dozens of platforms available and many will claim to be among the best online brokerages, though it’s not always the case. Ultimately you need to find what works best for you and what will meet your needs as an investor.

That said, OptionsHouse is a newer player in the brokerage space, being around for the last seven years. They’re actually run by and a part of Peak6 Investments which is based out of Chicago and has been rated by Barron’s as a 4-star brokerage each of the past four years. Over the past few years OptionsHouse has gained steam that has allowed them to stand out as a major player in the active trader/options investing market.

OptionsHouse Features

Streaming Quotes: Many brokerages offer streaming quotes, but are not always free. This is not the case with OptionsHouse. Once you open your account and fill out the requisite paperwork you have access to free real time quotes. If you’re someone that likes to keep a pulse on a specific stock, or the stock market in general this is a great tool to have.

The Trading Platform: The platform is straightforward and robust, while also being fairly simple to use. If you’re looking to place stock trades it is a flat $4.75. Yes, you read that right…a flat $4.75. If you’re looking to trade options, which is their bread and butter then the commission is $5 for up to $5 contracts with $1 per contract thereafter or a flat $8.50 per contract with an additional $.15 per contract. Speaking from knowledge, these are VERY competitive rates as most brokerages will charge at least $7 per stock trade, if not closer to the $8 or $9 range.

Free Virtual Trading: I LOVE this feature and do not use it nearly enough. Do you have a stock strategy you want to try but aren’t quite ready to invest your own money? OptionsHouse gives you, with each account you open, a $5,000 virtual account, which you can use to test-run trading strategies.

New Research Function: This is a new feature recently added to the platform which I absolutely love. OptionsHouse has created a centralized spot that lists analysts reports, technical events and competitor news (just to name a few) on specific companies. This new feature, along with their excellent charting functionality, allows you to make a more informed decision when comparing companies or funds to invest in.

Advantages of OptionsHouse

Fees Fees Fees: I am a firm believer that you should not choose an online brokerage based off of commission prices alone, but it’s hard to look at OptionsHouse and not like their fee structure. They have no hidden fees to speak of and the commissions are out of this world. In addition to the low fees, their margin rates are very hard to beat.

Customer Service: Every time I have contacted their customer service center I get someone that actually knows what they’re talking about. Let me shine some light on call centers for some online brokerages – you will not always find people who know what they’re talking about. It’s sad, but true.  If you’re an active trader, or a buy and hold investor, you’ll come to appreciate this as you get the answers you need as well as the confidence that they know what they’re talking about. They also offer a handy instant chat feature which I find invaluable.

Low Initial Minimums: If you’re looking to open an account with OptionsHouse, there is a relatively low barrier to entry as there is a $1,000 account opening minimum. If you’re looking to trade on margin, it’s a minimum of $2,000, as it would be with any other brokerage.

Efficient Trading Tools: While OptionsHouse can’t boast the trading tools that you’ll find at places like Scottrade, they’re still very efficient and can hold their own. Their tools started out as more along the active trader bent, but with the addition of the new research functionalities mentioned prior they now offer more of the traditional tools a less active trader would be looking for.

Disadvantages of OptionsHouse

Light on the Mutual Funds: If you’re looking to trade mutual funds with OptionsHouse, you’ll have few options available. While the $9.95 commission is VERY reasonable, the selection is limited. They offer roughly 1,000 no-load mutual funds. While it is good that they offer no-load funds, I would still like to see a more expansive offering from them.

Limited After Hours Trading: Most online brokerages allow you to trade in the after hours (the stock market is open for trading after the normal market is closed, but on a much more limited basis) until 8:00 P.M. EST. However, with OptionsHouse, they only allow trading until 5:00 P.M.

What’s My Take on OptionsHouse?

If you’re looking to invest in the stock market, there are many options to choose from. Each of the players have things that set them apart and the case with OptionsHouse is that they offer great rates and a solid platform to trade in. If lower rates are your thing and you’re looking to invest primarily in stocks, etfs or options then they are definitely worth a look. I prefer to have several brokerage accounts as I can trade in one if the other platform is down as well as having different strategies for certain parts of my portfolio.

The other thing it allows me to do is trade a little more actively in one and do more options trading in one and do my more long term buy and hold type strategy in the other. Regardless of your investing bent, OptionsHouse is a great choice and you can open your account online and be ready to go in as little as 15 minutes. OptionsHouse sweetens the deal by often running promotions for free trades or a cash bonus to clients who open new accounts.


Get up to $600 with a new OptionsHouse IRA

 

Where do you handle most of your investing needs? What are you paying per stock trade?

 

*Updated from original posted on April 24, 2013

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About the author:

I'm the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. I'm passionate about helping people learn from my mistakes so that they can enjoy the freedom that comes from living frugally. You can connect via Twitter / Facebook.

31 comments on “Online Brokerages I Use: OptionsHouse Review

    • Not a problem Joe! I agree, the options rates are a steal if you ask me. I have a small Roth I am looking to move and just may move it there to take advantage of the rates. They’re newer, so it doesn’t surprise me all that much. That said, I think they’re growing quite well.

  1. I’m with Kim, I hadn’t heard of Optionshouse before, but it sounds like a decent option. When I begin investing in the next 6 months I’ll probably stick to mostly mutual funds. Optionshouse doesn’t sound exceptionally great at this, so I may have to look around a bit more. Thanks for the review!
    Jake Erickson recently posted..How much do pets really cost?My Profile

    • It is a fairly good option, especially if you’re looking towards trading stocks, etfs or options. If you’re looking mainly towards mutual funds, then someone like Scottrade would be a great choice.

    • Fidelity is definitely a good option to use. I only have an IRA with them currently , so do not have any experience on the tax statements. Their monthly statements are just fine and have had no issues with them and have heard no complaints about their tax forms.

  2. Do they allow you to DRIP shares of stocks? I know Scotrade has been slow on this front and it drives people a little crazy.

  3. Is there a time-limit on the free trades? That is how eTrade got me. It turned out those free trades were only in the first 30 days of the account, so in reality I had ONE free trade. Of course, free isn’t actually free, either. I had to pay the trade fee which they refunded at the end of the 30 day period. If I had taken advantage of all of the free trades, I would have had to pay several hundred dollars extra and wait for the money to be refunded.
    Edward Antrobus recently posted..How to Fix Incorrect Charges on Your Credit or Debit CardMy Profile

    • Ugh…I hate it when brokerages do that. Why charge you for something and then “credit” it back to you at the end of the term?

      For most of their promotions it’s a 60 day window you have, though I believe a few of them go as high as 90 days. The free trade is free, so no funny accounting. It’ll just show on your trade confirm that it was free.

    • Thanks Jacob! I agree that the rates are very good. What are you investing in at Vanguard? If it’s ETFs you can find any of those and for cheaper at OH.

      • Trading Vanguard ETFs is commision free with a Vanguard brokerage account… so I don’t see how that would be cheaper at OH….

        • That’s great Brian! However, correct me if I am wrong, but I believe that it only applies to Vanguard ETFs. Which, if “you” are fine with only investing in those then that is fine. I was speaking in generalities as Jacob was not specific in what exactly he is investing in at Vanguard.

          • That is true. If you are investing in other ETFs the fees are pretty awful at vanguard (I want to say is is pushing $20 a trade like an old school broker). There are also a few possible fees for account minimums if you don’t sign up for their e-delivery package too so I would agree that if you don’t want to only invest in vanguard ETFs then OH looks like a clear winner!

  4. I have actually never traded options. I always considered myself too naive or too risk averse to even tackle the topic of options. I have had for a number of years accounts at TradeKing and TD Ameritrade. I like both because they are easy and I don’t get bothered with countless emails or physical mail all the time. Some business, as you know will plug your inbox and mailbox.
    Scott @ Youthful Investor recently posted..Why I will NEVER Invest in Demand Media – Digital SharecroppingMy Profile

    • Options are definitely something you want to steer clear of if you’re more risk averse. I am with OH & Scottrade and thankfully they do not fill up my inbox.

    • I do think it’ll hold some back. However, I do not see them going in that direction as that’s not really their client base…not to mention the fact that ETFs are dealing a very decent blow to many mutual funds.

    • They definitely can be stressful, especially if they do not line up with your risk tolerance. I think for many they should stick with the basics unless they educate themselves appropriately.

    • Not a problem Jim. The virtual trading aspect is really nice, not to mention the commission pricing.

      I’ll likely not be running a review on TDA, though if you have any questions on them just shoot me an email and I can answer any questions you may have.

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