Online Brokerages I Use: OptionsHouse Review
OptionsHouse is a good brokerage to consider if you’re looking for a low-cost option for your investing needs. I have been investing with OptionsHouse for the past three years now, so I write this OptionsHouse review as someone who has a good amount of experience using their platform. I’m not a terribly active trader, though OptionsHouse is a great brokerage to look at if you’re interested in investing in options or are a somewhat active trader.
I’ve reviewed other brokerages in the past, like with my Scottrade review and am doing a review of OptionsHouse as it’s the other platform I use alongside Scottrade to manage my investment needs.
I love talking about investing in the stock market, especially with beginners. As I worked in the brokerage industry for a number of years I have seen firsthand what many retail investors bring to the table and often times it boils down to learning how to invest and needing assistance with where to get started.
With the number of online brokerages available, it can be difficult for many investors to know where they should start, especially when so many seem alike. With that in mind, I have had a great experience with OptionsHouse ever since I rolled over an old 401(k) to them several years ago.
Looking for another brokerage option? Check out my OptionsXpress review for another solid low cost brokerage.
There are dozens of brokerages in the industry 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.
OptionsHouse is a newer player in the brokerage space, being around for the last eight years. They’re run by and a part of Peak6 Investments which is based out of Chicago and has been rated by Barron’s as a 4 (out of a possible 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. With all of that out of the way, we’ll move on to the Optionshouse review.
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 required 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 good tool to have. The paperwork itself takes about five minutes and once done you’re good to go.
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. 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. In terms of options pricing, most of the larger online brokerages will charge what they normally charge for a stock trade plus some other fee. That is not the case at OptionsHouse.
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 and their commission structure can’t be beat. In addition to the low fees, their margin rates are very hard to beat. With that in mind, this allows you to keep more of your money working for you in the market as opposed to their pockets.
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 unfortunately 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. OptionsHouse also offers an instant chat feature which is very easy to use.
No Initial Minimums: If you’re looking to open an account with OptionsHouse, there is a low barrier to entry – $0! That said, they do suggest opening an account with at least $1,000 to start. If you’re looking to trade on margin, it’s a minimum of $2,000, as it would be with any other brokerage per industry regulation.
Efficient Trading Tools: While OptionsHouse doesn’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 and competitive, 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. With their focus being on the more active trader, I can understand the reasoning behind the limited offerings though.
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.
OptionsHouse review – my take
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 unbeatable 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 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. This allows me to bring enhanced focus on my investing without spreading myself too thin.
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 quite a few promotions from free trades to a free Kindle Fire HDX. Make sure to check out my Optionshouse promo code post to see what their current promotions are.
Where do you handle most of your investing needs? What are you paying per stock trade?