OptionsXpress Review: Get $100 Cash Back!
OptionsXpress is an online brokerage that has grown substantially in popularity thanks to their acquisition by Charles Schwab in 2011. This OptionsXpress review is meant to help you if you’re considering moving to a new online broker or are looking at them for options trading.
I dealt with OptionsXpress extensively during my days in the online brokerage industry, and am very familiar with both their platform as well as their customer service support.
I was always impressed during my dealings with them and believe that this review of OptionsXpress will help if you’re considering them for your investing needs. If you would like to check out a few of my other brokerage reviews, you can do so below:
There are many online brokerages to choose from, each with their own bit of differentiation which can make it difficult at times to choose what might be the best online brokerage for you. If you’re just looking to invest in stocks or in index funds and want to handle it all yourself then it largely comes down to pricing and offerings.
With regards to OptionsXpress, they have been a major player in the brokerage industry since their inception in 2000 and considerably more so since they were acquired by parent company Charles Schwab in 2011.
Trading Platform: The trading platform at OptionsXpress is better than most. Intuitive and user-friendly, the platform is optimized for placing trades. At $8.95 per stock trade and $14.95 per option trade they are definitely within the competitive landscape. Their pricing is flat and has no extra charge for broker assisted trades, which I like to see. I will also mention that if you’re looking to trade options that most brokerages charge a base fee (which is usually the same as a stock trade) plus a per contract fee. OptionsXpress does not handle it this way and charges one price based on the number of contracts you’re dealing with.
Free Streaming Quotes: Like the other brokerages I’ve reviewed, OptionsXpress offers free streaming quotes. Just fill out some paperwork online after opening the account and you’re good to go. This is a huge bonus to have, especially if you watch the market at all and do any kind of relatively active trading. I go so far as to avoid any brokerages that do not offer this feature as there is no real need to pay for it.
Virtual Trading: Like OptionsHouse, OptionsXpress has a free virtual trading platform where you get $25,000 play money to test out strategies or ideas. If you’re just starting out investing in the stock market, this can be a great way to get your feet wet before throwing real money in the market. I love using virtual trading as it can help me formulate strategies without spending my own money.
Futures/Forex Trading: Like Etrade, OptionsXpress offers futures and forex trading. While this type of trading is not for everyone, it is a nice feature to have if you do enjoy that style of trading and they have very competitive rates with $3.50 for futures and no commission on forex trades.
Advantages of OptionsXpress
Schwab Connection: One of my favorite things about OptionsXpress is their connection with Schwab. This means you get access to Schwab’s free list of over 100 commission-free ETFs as well as a host of any other tools Schwab offers. I believe this helps set them apart from competitors like Optionshouse as you instantly get access to all of the high powered tools Schwab offers.
Flat Pricing: While Etrade does not offer flat pricing, OptionsXpress does. That is also not to mention the fact that they do not charge an additional free for broker assisted trades. That is a huge bonus in my opinion.
Powerful Trading Tools: Trading tools is one area where an online brokerage can set themselves apart and OptionsXpress does not disappoint. OptionsXpress has a wide variety of tools from novice level to more advanced. They also offer numerous free online and live training seminars which can be a huge benefit if you’re trying to formulate a new investing strategy.
No Minimum to Open: Many brokerages will have minimums to open an account and can vary widely. That is not an issue with OptionsXpress as you can open an account with any amount and get started.
Stellar Customer Service: I will pay more for good customer service, and you’ll find that with OptionsXpress. Every time I have spoken with one of their representatives I have always been impressed by their knowledge and courtesy. They also offer real-time chat, which is a nice added benefit that not every brokerage offers.
Disadvantages of OptionsXpress
Higher Commissions: I typically like to pay closer to the $7 range on my stock trades and OptionsXpress comes in at $8.95 per stock trade. While that is on the higher end of average, the nice thing with OptionsXpress is that their pricing is flat and with absolutely no hidden fees which mitigates the higher pricing quite a bit in my opinion. I also believe that the commission free ETFs available through Schwab mitigates this as well.
Lower End of Mutual Funds: If you like to invest in mutual funds then OptionsXpress is a little on the light end coming in at the middle of the road with offering 5,300 mutual funds. That being said, it’s definitely within what the average online brokerage offers and more than what quite a few offer. It’s not all “bad” though as their pricing on mutual funds is quite nice coming in at $9.95 plus any applicable load charges. To provide some perspective on this – other online brokers charge $25, $50 or more in order to trade a mutual fund.
OptionsXpress review – my take
I think for either the active investor or the buy-and-hold investor, you really can’t go wrong with OptionsXpress. I love that they offer flat pricing and their connection with Charles Schwab is a huge selling point to me. They have a number of great investing tools and resources that are free to use and have good access to various other niceties. This is also not to mention the fact that they’ve been voted one of the best online brokerages by companies like Barron’s and Smart Money.
If you’re looking for a solid online brokerage with reliable resources, then OptionsXpress could be for you. You can open an account online and generally have it active within about 15 minutes. As an added bonus, OptionsXpress is usually offering some sort of account promotion when you open an account with them varying from free trades to $100 cash back and gift cards. Make sure to check out my OptionsXpress promo code post to see what their latest promotions are.
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