| Broker Reviews: OptionsHouse |
by John Jagerson Introduction: 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 limited 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 4 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. The commissions for small stock and option trades are on the low end when compared to other companies in this segment, however, with very large orders (above 20 contracts or multileg 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." 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. Broker Comments: Once our broker reviews are published we allow the management of the firm to make a response, which we will include in the review itself. The CEO of OptionsHouse, sent us this response: "Hi, I am the CEO of OptionsHouse, and I just wanted to take a minute to thank John and everyone else at Learning Markets for taking the time to review our site. We appreciate all feedback, even on our charts, because we work hard to consistently try to improve our customers’ experience. They are excited about the things we have done to date, and we have more on the way…George Ruhana" Next: Avoiding trading scams Keep up with us:
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3.25 Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved." |
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