2018 Update: The Optionshouse brand was eliminated in 2017 and rolled into ETRADE. This is an unfortunate change because ETRADE charges higher commissions and fees across the board.
Original Review: I first opened an OptionsHouse account more than five years ago. This OptionsHouse review will cover everything that I’ve learned, including the basics of the platform and pricing for individual investors.
OptionsHouse opened in 2005 and immediately disrupted the online brokerage space. At that time, most online brokers were charging $10 or more in commissions per trade. Some were still attempting to get $25 per trade. OptionsHouse introduced low-cost trades for less than $5 and put pressure on other online brokers to lower their fees.
In 2014, OptionsHouse merged with tradeMONSTER to grow the brand and expand the number of available services. In 2016, OptionsHouse was acquired by ETRADE for $725 Million. Through these changes, OptionsHouse improved every dimension of their trading platform and was named a top online broker by Barron’s.
Table of Contents
Optionshouse Platform and Tools
The merger with ETRADE has allowed OptionsHouse to build one of the most robust web-based trading platforms available today.
The entire platform is designed to work on any device, including your computer, tablet, and mobile phone. You can access your account through any modern web-browser, or download the OptionsHouse mobile app on any smartphone. The result is a lightweight platform that prioritizes reliability, speed and ease of use.
Because the platform is web-based, any customizations that you make are saved in your profile and synced across every device. This ensures that you always have access to the robust tools and trading platform, regardless of your chosen device.
The OptionsHouse platform includes a number of important trading tools (at no additional cost).
TradeLAB allows you to quickly evaluate each trade’s potential on a single screen, including the probability of profit, loss or breakeven. It also offers insights on the risk/reward potential of each security that you are evaluating based on the current stock price and recent volatility. Within tradeLAB, you can run “what-if” scenarios for every investing angle that you can think of.
The OptionsHouse platform provides significant automation capabilities, including the ability to create custom orders in advance and pre-populate trade actions. The platform then pushes a customizable trigger alert and you can submit saved orders directly from the alert (on any device).
Options traders should consider using the strategySEEK tool, which scans live market data for options strategies based on specific criteria defined by you. After inputting your investment objectives and expectations, the strategySEEK tool will run a number of data calculations to suggest new strategies that you might consider when placing trades.
You can then evaluate each strategy using tradeLAB, modify it, or place a pre-populated order using the customizable settings described above.
OptionsHouse also offers a virtual trading platform, completely free of charge. When you open an account (no minimum funding requirement), you can set up a free paperTRADE virtual account at the same time.
In the paperTRADE account, you can make trades using virtual money and learn the platform’s trading functions in a live market environment. This virtual account functions exactly like your normal account, and includes all of the live trading platform features. The only difference is the use of virtual money.
This continues to be the selling point for OptionsHouse, and the primary reason I chose to use the platform in the first place.
First of all, there are no fees associated with opening or maintaining an account. Unlike the majority of other brokerages, Optionshouse does not require that you initiate a certain number of trades or maintain a minimum account balance. You can open the account and trade on your timing without worrying about ridiculous hidden fees.
In addition, the trade fees are still dirt cheap when compared to other brokerage firms:
As you can see from the chart above, here are the common fees for trading:
- ETFs: $4.95 flat rate per trade
- Stocks: $4.95 flat rate per trade
- Options: $0.50 per contract + $4.95 base rate
- Futures: $1.50 per contract
- Mutual funds: $20 flat rate per trade
If you need a broker to assist you in making trades, there is a $25 additional fee.
- Robust Platform for Stocks, Futures, and Options: the OptionsHouse platform is easy to navigate on all devices. You can trade, cancel, or modify orders with one click.
- Free DRIP/Dividend Reinvestment: You can automatically reinvest dividends on all stocks and funds for free.
- No Minimum Opening Deposit: You can open an OptionsHouse account without any initial deposit. Most brokers want a minimum of $1,000 to open an account.
- Free Virtual Trading Account: When you first open an account, you can choose to open a separate account to trade virtual money.
- Lots of Account Choices: Individual, Joint, Corporate, Traditional IRAs, Roth IRAs, SEP IRAs, UTMA, UGMA, Trusts, Partnerships, Investment Clubs, and Educational IRAs are all available.
- Solid Customer Service: OptionsHouse offers phone, chat, and email support from 8am-8pm Monday through Friday.
- Low Cost: As I already mentioned, OptionsHouse offers incredible value for investors looking to trade stocks and options.
- Limited After Hours Trading: Some brokerages allow trading until 8pm Eastern. OptionsHouse allows trades until 5pm Eastern.
- IRA Closing Fee: Optionshouse charges $60 to close an IRA.
- Mutual Funds: Mutual funds are $20 per trade, and there are a limited number of no load mutual funds available.
- Cheap Stocks: If a stock trades below $2.00 per share, OptionsHouse charges an additional $.005 per share on the trade.
- ETFs: OptionsHouse offers just five commission-free ETFs.
OptionsHouse Review Summary:
If you are looking to trade individual stocks or options, OptionsHouse is a solid choice. The pricing continues to be competitive, and the platform continues to improve.
Mutual fund and ETF investors will be disappointed at OptionsHouse and should look elsewhere – perhaps M1 Finance.