Online Brokerage Review – OptionsXpress

Calendar September 15, 2007 | Posted by Jorge

Here’s a review on an options-based discount brokerage, OptionsXpress. OptionsXpress prides itself on catering to the broad market including options, futures, and bonds to name a few.

Fees/Commissions: OptionsXpress has a tiered fee structure. Starting with their options schedule, their fee is broken into two groups: 35+ trades per quarter and 0-34 trades per quarter. Taking the 35+ trades per quarter, OptionsXpress charges a flat rate of $12.95 per trade for up to 10 contract trades. Every contract trade after is $1.25. If you trade 0-34 options per quarter, OptionsXpress will charge a flat $14.95 for up to 10 contract trades, and $1.50 thereafter

OptionsXpress’ stock fee schedule is also tiered. 9+ stock trades per quarter runs $9.95 per trade for 1,000 shares (per trade). For every share above 1,000 per trade, OptionsXpress charges $0.01. If trading less than 9 stock trades per quarter, the fee runs $14.95 per trade (up to 1,000 per trade) and $0.015 per share above the 1,000 limit per trade.

Other fees from OptionsXpress include no charge for broker assisted or limit order trades, $14.95 min / $1.50 per contract in a complex options trade (up to 4 legs), $29.90 minimum for a covered call trade, $14.95 plus any additional loads or fees for mutual funds, $5 / bond with a minimum of $14.95, $3.99 / futures contract plus exchange fees, as well as other fees for options assignment or exercise. Margin rates range from 6.5% to 8.75%.

Investments Offered: OptionsXpress offers stocks, options, futures, mutual funds, and bond trading. Some options are not available unless you meet their minimum requirements. Futures trading, for example, requires 3 years of trading experience plus a minimum account balance of $25,000.

Platform Features: Extremely organized and chock full of features. OptionsXpress offers up to date options chains, stock prices and free (yes, free) Level II quotes. The actual platform is fairly simple but the information that it contains is extremely valuable and useful. OptionsXpress also has various proprietary screens and research.

Security: OptionsXpress only has a login page. They do not use, at least from my experience, any sort of trading password found with competitors such as Tradeking or Zecco. OptionsXpress is also an SIPC member.

Ease of Use: OptionsXpress has a very easy to use trading platform. Everything is labeled accurately and easy to find. OptionsXpress also has convenient features including trading directly from their Level II platform.

Support: I have yet to use OptionsXpress’ support features so at this time I have no comments available.

Pros

  • Favorable fee structure for heavy options trading
  • Free Level II quotes
  • Easy to use platform
  • Very responsive trading platform

Cons

  • Expensive equities trading even with tiered fee structure
  • Lack of double layered security found with competitors

Summary: If you’re a heavy options trader or even a futures trader, OptionsXpress may be a good option for you. At $1.25 per contract ($12.95 minimum per trade), it appears to be one of the cheapest in the game if you achieve their active trader status (35+ contracts / quarter). Although I do not have access to their futures platform, the ability to trade around the clock makes it desirable for other futures traders. OptionsXpress also has an increasing number of mini contracts, or e-mini contracts as its called. Their search feature is extremely useful. The trading platform is well designed, easy to use, and extremely organized. Free Level II quotes is valuable beyond belief. I would like to see their equities fees brought down a bit but I wouldn’t use OptionsXpress for anything beyond options and futures trading. That being said, OptionsXpress caters to a smaller portion of the trading community, albeit very well.

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  • OptionsxpressNO
    Optionsxpress sent me an email and told me via phone not to take action on my account to avoid a margin call. They stated that they would tell me in a following email if there was going to be a margin call. I called to confirm this information because I've been told the wrong thing several times by optionsxpress an been misled too many times to count. This time optionsxpress has cost me dearly. They told me there was no immediate need to add money to my account to avoid a margin call. About an hour after that conversation, they liquidated my stock when it was at its lowest point. Optionsxpress defrauded me out of $35,000 in seconds. About 6 hours later that same day I recieved an email warning me that there would be a margin call on the stock if I didn't add $1,500 to my account within 3 days. The problem is, they had already liquidated my stock positions. I've spoken with several representatives and managers and they agree that they made a mistake yet they do not wish to fix it. They told me that they were even willing to put me back in the stock position I had with margin and then said they couldn't because my account didn't have the same money in it. I wonder why. I invite anyone who has gone through the same thing to contact me. Any actions taken by optionsxpress that violate the laws of the federal government and/or state are illegal and unacceptable. I hope this helps others to avoid doing business with this kind of company. Please share your story so that others don't get ripped off by optionsxpress.
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