Charles Schwab Corporation made a wise move in 2011 by buying out optionsXpress Holdings Inc. optionsXpress is indisputably one of the best online discount brokers and a salient addition to Charles Schwab's financial and bank services. This online options trading broker provides unparalleled options trading tools as well as comprehensive tools for placing stock and futures orders all from one easy-to-use trade ticket.
Experienced traders will immediately notice how easy the trade interface provided by optionsXpress is to use. Even if you already have trade research tools that you are familiar with you will be tempted to replace them with what optionsXpress provides. With this service, you can easily research specific stocks, configure complex alerts and screeners, and evaluate volatility and probability. If you are new to options trading, they provide a capable virtual trade tool that will let you test out trade strategies before you put your assets at risk.
They provide flat-fee rates for up to 10 options contracts, and trades are a competitive $8.95. They do not charge for broker-assisted orders or telephone conversations with their trading specialists. The only aspect that kept this options broker from one of our top spots is fees for large-volume contract orders, which are about twice as much as the top ranked discount brokers.
This discount broker offers two price points for options contracts depending on trade activity. Active traders who make over 35 trades per quarter are charged $1.25 per contract with a $12.95 minimum. Standard traders who trade 34 trades or less per quarter are charged $14.95 for up to 10 contracts or $1.50 per contract for 10 or more contracts. If you typically trade one to 10 contracts, the pricing is typical. However, if you are a volume trader who purchases 50 contracts or more per quarter, the elevated fee will eat away at your profitability rather quickly. Complex options orders are charged by the total number of contracts (the minimum flat fee still applies).
If you trade on the margin, you will also notice a higher rate. The margin rate, even for loan balances over $1 million, is still a high 6%. The margin rate for low loan balances under $50,000 is 8.25%. Though trading on the margin is extremely risky, if you do use this strategy lower margin rates of near or below the base rate are an advantage to you.
On the positive side, optionsXpress is one of the few discount brokerages that do not charge a broker-assisted order fee. Penny options are low-priced at $4.95 for one to 10 trades and $0.50 per contract for 10 or more. Options on futures are $12.99 for up to 40 and a slight $5.99 for over 1,000 contracts.
Other standard fees include $9.95 for exercise or assignment of an option, $50 for full outgoing account transfers, $15 for outbound wires and $15 for overnight check delivery. In addition, as with all brokers, they pass along a charge of $0.0105 per contract CBOE regulatory fee.
Unlike many large brokerage firms, optionsXpress's trading roots lie in technology rather than traditional trading. They launched their first trading software for brokers in 2003 and now offer one of the best trading interfaces for options traders. Their newest tool is their all-in-one trade ticket that can create strategies and place stock, options or futures orders all from one screen. They also provide applications for trading using the iPhone, Android, iPad, Palm, Blackberry and Windows-based mobile phones. They host a mobile website for viewing their website with other mobile devices and offer Xtend (downloadable trading software) free to active traders. For those not yet ready to trade using real money they provide a free virtual trade tool with a $25,000 balance to practice trade strategies with zero monetary risk.
In terms of options trading, they have tools for creating simple and complex trade orders. You can easily create butterfly, condor, OCO, combo, straddle, strangle, spreads and contingent orders. It has tools for searching and monitoring option chains, and you can place options orders using a mobile device. Experienced options traders will find the order placement tools exceptionally simple to use and the research tools timely and useful.
optionsXpress includes all the research tools needed to make educated trade decisions. They also include basic education that covers basic trade principles. You can easily view market overviews or filter down to exactly what you want to see. You can also view market news and view quotes on your mobile device. Using your account tools, you can create highly customized screeners, watch lists and alerts as well as strategy scanners. They also provide advanced tools such as their Xspreads Spread Book, Streaming Charts, Volatility View and Options Pricer.
If you need customer assistance for general information you can contact optionsXpress by telephone, chat, mail, fax or email. For direct support regarding your account or to place a trade order, you can contact them by telephone during extended business hours. They also offer support on Saturdays. Unlike many brokers, you can contact a licensed options or futures specialist free by telephone or chat. This is an online brokerage and they do not have branch offices that you can visit for face-to-face assistance.
On the optionsXpress website, you can find a long list of FAQs covering topics such as account transfers, new accounts, IRAs and fund transfer information. They also post educational videos and newsletters. A new feature that they provide account holders is a social section where you can comment on stock trends and view others' comments. For further assistance, they provide personal coaching, webinars and live events. They do have Twitter and Facebook profiles but they do not keep them regularly updated.
For those that actively invest in a variety of products, optionsXpress is one of the best. The all-in-one trade ticket makes creating complex orders easy, and with this discount broker you can place orders from any mobile device, including the iPad, iPhone and Android devices. They also provide free broker-assisted orders, and you can talk to a licensed options or futures trade specialist free via the phone or live chat, which is a rare offering.
