Fees & Commissions:

Scottrade offers competitive low volume options contract prices but the price goes up exponentially the more you buy. Their trade fees are great at a flat $7 per trade but options contracts are $7 plus $1.25 per contract. If you are a low volume options trader, the fees are comparable at $13.25 for five contracts. However, if you purchase 100 contracts they charge $132, which is the highest of the brokers we reviewed. Broker-assisted orders also increase exponentially at $27 per order plus $1.25 per contract. Touchtone phone orders are $17 plus $1.25 per contract. For the most part these rates are quite decent for light traders, and their $7 trade fee is golden.

Their margin rates are on the high end, even for traders who have a high loan balance. If your loan balance is under $9,999.99 the interest rate is 7.75%, $50,000 to $99,999.99 is 6.75% and over $1 million is 5.25%. Though their lower loan balance rate is within the industry standard rate, many offer interest rates at less than 2% for those with a high loan balance.

As with all brokers, they do charge a variety of other fees. It costs $17 to exercise your option or assignment and $7 for trades and pass-along fees such as regulatory transaction fees, Trading Activity Fees (TAF) and Options Regulatory Fees (ORF). Scottrade charges a $1 service fee for mailed confirmations and $2 for mailed statements. Cashless stock option processing fees are $50, and if you need to wire funds out of your account, it costs $15. However, they also offer some services for free such as no annual maintenance fees, no charges for inactive accounts, no monetary penalties for closing your account and real-time streaming. Their mobile apps for the iPhone, iPad and Blackberry smartphones are also free to download.

Trading Platform & Research Tools:

Scottrade provides the basic trading tools that you would expect to find such as watch lists, calculators, streaming market news and the ability to place an order in a variety of ways. We looked at Scottrade's OptionsFirst trading interface and account center, which is designed specifically for options traders. OptionsFirst supports complex options trading strategies such as spreads, straddles, strangles, collars and butterflies, with up to four legs per spread. Through this platform, you can place an order through an order ticket, quote or options chain.

Many brokers offer similar tools, calculators and research data. Often the difference is the presentation and how easy it is to place an order. If you have been trading stock online for a while, you may have become accustomed to certain trade tools and may be reluctant to change. However, Scottrade's options trading platform and market tools are streamlined and no nonsense. It is not difficult to look up basic market information or to monitor your positions and orders. It even has a risk tool that can monitor your portfolio risk. If you have been using a different broker or trading platform you should not have a difficult time figuring out how to place and monitor orders with Scottrade.

The OptionsFirst platform is simple to understand but does lack a few customization tools. For example, in the options view you have few display options and you cannot change the main account page to display any way you would like. Another slight annoyance is that many tools run in their own separate windows and you have to install Java for them to run. Since many tools open in a separate window, it is challenging to use the interface on a mobile device – or even on a computer without dual monitors. A nice inclusion is that if you have an Options Trade account you can still use the standard Scottrade tools and place orders via your mobile device.

Customer Service:

When it comes right down to it, any company that manages your stock holdings and potentially thousands of your hard-earned dollars should provide impeccable customer service. Scottrade customer service is highly responsive and available. Unlike many discount brokers, Scottrade also has branch offices located nationwide. Currently, they have over 500 offices including four near our corporate headquarters and even more in areas that are more populous.

Besides visiting a branch office, you can also request direct support by telephone, email and instant chat. Customer service can also send you correspondence to your account message center. Scottrade provides extended support hours. You can contact them by telephone or chat from 6 a.m. to midnight CST. We experienced positive interactions with Scottrade. They responded to our email queries within the same day and were pleasant and helpful. Though they do provide educational services such as online classes and webinars, we did not put much weight on that in terms of ranking since most active traders are already quite aware of what resources are available and likely have a collection of their favorite resources bookmarked and a lengthy subscription list.

Signing up for an account with Scottrade is rather simple, but they do require a signed agreement (rather than an electronic signature) to activate your account fully and the account needs to be funded for the first time before you can take advantage of all account features. As with all broker agreements, it is to your benefit to read all fine print before you accept an agreement no matter how tedious it may seem. Best practices would also include printing and saving the agreements, as they are legal contracts.

Scottrade OptionsFirst provides a platform that focuses on the special needs of options traders in an efficient online account that focuses on brevity rather than unnecessary flamboyance. If you are primarily interested in purchasing contracts in bundles of less than 10 at a time, their rates are just above industry average. Their low volume option rates coupled with the low $7 trade rates make them a competitive value. However, if you are a large volume options trader and carry a high loan balance, one of our higher ranked products can provide you with lower rates and margin interest.