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OptionsHouse is a relatively new firm with a creation date of Aug. 1, 2008, according to FINRA. The firm is located in the heart of the options and futures industry in Chicago, and predictably caters to active stock and option traders.
OptionsHouse is majority owned by Peak6 Investments, a prop trading, hedge fund and market-making firm. Peak6 also owns ONN.tv, a source for Web videos covering the daily action in the option’s market.
OptionsHouse is a great example of the value of simplicity.
New clients should experience a short learning curve, and a platform and support structure that have been designed to make execution and analysis very straightforward. The simplified commission schedule and trading platform are good examples of why less is often more in the brokerage business.
Who is the Broker Targeting
OptionsHouse is clearly targeting the active, individual stock and options trader. The platform and commission structure is designed specifically for traders executing options, option spreads, stocks and ETF trades. Stock and options investors who execute larger-than-average trade sizes will find the OptionsHouse offering very compelling.
Ease of Use
Like many brokers in this segment of the industry, OptionsHouse has kept the trading platform interface very simple. Traders have some ability to customize colors and the way the option’s chain sheet displays with just a few clicks.
The order entry process is uniform whether you are trading a single stock or a four-legged options spread. The platform is Web-based, which makes load times a little slow depending on your connection. This could annoy traders trying to move from screen to screen very quickly.
OptionsHouse also offers analytical tools for both options and stocks. The options analytical tools are excellent, but most of them are actually provided by IVolatility.com, so there is limited integration with the rest of the platform. IVolatility has a good tool set that can be quite expensive to subscribe to directly outside the brokerage platform, so this represents a nice benefit.
The platform does provide charts but, like most Web-based charting, they are limited in functionality. Because most of the charting functionality is provided by QuoteMedia.com, there is limited integration with the trading platform. However, unless you are an advanced chartist, you will likely not need more functionality than what is provided.
Despite the fact that most of the analytical tools are sourced from third-parties, they are simple and useful. We were pleased to see that OptionsHouse has not given in to the temptation of providing an endless series of tools and features that have limited value and may be confusing and, in some cases, misleading to traders.
The firm has excellent client support. In our review we called several times to ask random questions at different times during the trading day. The broker or agent on the phone always sounded like an expert and picked up the phone in a matter of a few seconds.
It does not cost more to talk to a broker, which can be a real benefit if you are away from your computer or need some assistance with a trade execution. Web or “chat” support is also available.
Costs and Commissions
OptionsHouse really won us over with their commission structure. They use a flat-pricing model that means that there are no “per contract/share” fees and commissions. (See The Truth Behind Broker Commissions.)
The commissions for small stock and option trades are on the low end when compared to other companies in this segment. And with very large orders (above 20 contracts or multi-leg option spreads), OptionsHouse starts to really save you a lot of money over most other competitors.
There are no hidden fees, and it costs the same amount to talk to a broker on the phone as it does to enter an order through the online platform.
Overall, there were very few account management related expenses. However commissions for trades other than stocks, ETFs and options (such as mutual funds or bonds) were relatively high. These kinds of trades are clearly outside the firm’s specialties.
Cons
The platform seems a little sluggish if you are used to a client-software-based platform. The learning curve is extremely low, but order entry could get a little tedious if you are making a very high volume of individual trades.
Customer support is very good and extremely knowledgeable, but, like many firms in this space, the brokers we evaluated over the phone were a tad “brisk.”
But we did not feel that any of these issues were deal breakers for traders looking for a cheap and efficient broker for stock and options trading.
Conclusion
Overall, OptionsHouse deserved a place on our recommended broker list by a wide margin.
They keep it simple and have designed the platform and support structure to effectively meet the needs of active stocks and options traders. The cost structure is a big draw, but unlike other low-commission leaders, they don’t sacrifice anything really important to bring those costs down.
Related Articles:
- Opening Your Options Trading Account
- 4 Tips for Picking the Right Options Broker
- 7 Reasons You Need a Broker Who Specializes in Options
- 5 Tips for Moving Your Brokerage Account
For more broker advice, visit OptionsZone’s Broker Center.
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