Are you a sophisticated investor who is looking to get a lot of broker for very little money? If so, look no further as OptionsHouse by E-Trade has got you covered. With the firm’s commissions rate at $4.95 a trade for stocks and options, and a $0 minimum to open and maintain an account, NerdWallet gave it a five-star rating. Just keep in mind, however, if you are a mutual fund or exchange-traded fund investor, chances are you can find a better fit to your needs elsewhere.
OptionsHouse: Did You Know?
- The commission’s rate is at a flat rate of $4.95
- The account minimum is $0
- Promotion: With a deposit of $5,000 or more, you can have $1,000 in free trades
When Is The Right Time To Use OptionsHouse?
- OptionsHouse works best if you’re an options trader, advanced trader, or fee-conscious trader
- Best for no account minimums or inactivity fees
- Used for its premium platform and tools
Areas in Which OptionsHouse Excels
As OptionsHouse requires no minimum balance to open an account, many consider this to be a standout among brokerages. But wait, it keeps getting better! OptionsHouse charges no maintenance fees to clients who do not make a certain number of trades per month or year. Additionally, clients will not pay extra for the platform or the data.
Trading platform and tools
Starting out as a broker for experienced and self-directed investors who are active in options, OptionsHouse continues to offer its customers tools and execution at a low cost.
In late 2014, OptionsHouse started to merge with TradeMonster and full integration commenced in 2015, making a big impact as OptionsHouse took on TradeMonster’s prestigious web-based trading platform. Designed for fast and easy trade, customers are able to use their trade ticket to make quick changes and walk through trade ideas in a customizable setting.
OptionsHouse has another tool called ‘TradeLAB’ which gives investors a profit/loss/break-even snapshot on a single screen and the probability of making a profit. With this tool, investors are able to participate in “what-if” simulation scenarios.
This is the platform with automation capabilities, such as a trigger alert that lets users pre-populate orders. Users will receive an alert when an event is triggered. With this, investors are able to submit previously saved orders directly from the internet or through the OptionsHouse mobile phone app.
Another defining tool is ‘strategySEEK’, which helps investors scan live market data for options strategies based on the specific criteria they have entered. The tool then creates a list of matches, which allow the user to create an order.
If you are an on-the-go investor, you will appreciate that the OptionsHouse trading platform is browser-based. If you make customizations, they will automatically be saved in your profile and they will be made available no matter what device you are using to access your account.
Virtual trading platform
For new traders and new-to-the-platform investors, a nice perk of OptionsHouse is paper trading, which is essentially virtual trading without having to put real money on the table. Upon opening a real account with OptionsHouse, an individual is then eligible to set up a paperTRADE account which closely mirrors the live trading platform’s functions. PaperTRADE allows investors to get practice trading virtual currency in a live market setting.
Disadvantages of OptionsHouse
Trading currency: Unlike at competitors OptionsXPress, Ally Invest and TD Ameritrade’s thinkorswim, forex investments are not available at OptionsHouse.
Commission-free ETFs: Disappointing, but not unusual for a brokerage, OptionsHouse only has five commission-free ETFs. If you are an active ETF investor who wants to keep commission cost down, you should consider OptionsXpress or TD Ameritrade’s ETF lineups.
Mutual funds: Mutual fund investors will find that costs will start to add up quite quickly as this company does not offer any transaction-fee-free mutual funds, and commissions on funds are roughly sitting at $20.
OptionsHouse Can Stack Up
With OptionsHouse offering some of the lowest commissions and fees, it is one of the most affordable choices for a brokerage. This is a company well suited for options traders due to its advanced tools and trade executions as well as its full-service platform.
What It Comes Down To
Perhaps OptionsHouse is not the right fit for ETF and mutual fund investors, however, an options trader and active stock investor won’t be able to find a company much better than this. With low commission rates, a $0 account minimum, and free investing tools and trading platforms, it is no wonder OptionsHouse continues to appear on best-of lists. To quote Dayana Yochim of NerdWallet Investing, “OptionsHouse stands out among brokerages for offering professional-grade tools at a low price.”
Featured Image: flickr
