Options trading is a great way to make money on the fluctuations of underlying assets because an option gives you the right, without the obligation, to buy or sell at a certain time and price. To determine which online brokers are optimized for options trading, NerdWallet took a look at the pros and cons of these specialized brokerage accounts offering options trading services: OptionsHouse, OptionsXpress and TradeMonster.
Each of these online brokers offers great value with regards to the trading technology and investment tools, but we found that OptionsXpress (by Charles Schwab) is the best for its overall trade experience if you’re a beginner looking for sophisticated technology and research features. For lowest rates, go with OptionsHouse. Nonetheless, the other two have unique benefits outlined below that can also benefit specific groups of active options traders.
OptionsXpress, by Schwab: Best For Beginners
Winner of many awards and a reputable online trading company, OptionsXpress is as unique as its name. Run by brokerage giant Schwab, OptionsXpress offers great customer service 24/7 along with extensive trader education tools. There are also numerous educational events that are available for investors free of charge; OptionsXpress believes in educating its investors and this comes across in its extensive resources offered.
You Should Sign Up If: You’re looking to learn a lot to improve your trading skills. Self-directed traders and casual options investors will like OptionsXpress for its easy to use platform. Sign up for an account here.
- OptionsXpress offers the best mobile trading experience, which is very important to some traders. NerdWallet rates them as the best in their ability to connect effectively in real-time with traders.
- Outstanding as service-providers for their in-depth analytical approach and coverage of every detail.
- Ease of operation for traders and investors.
- They are on the costlier side for options trading, with high minimums.
- The Xtend desktop platform is weak and the screeners don’t offer much to clients beyond basic trading abilities.
OptionsHouse: Best for Advanced and Active Traders
OptionsHouse has been around since 2005 and was initiated by PEAK6 Investments – it has gathered considerable reliability and support from its clients since then, now amongst the oldest in the market. Additionally, OptionsHouse has earned high praise in Barron’s recent edition of its “Review of Online Brokers.”
You Should Sign Up If: The experienced everyday investor will benefit the most from OptionsHouse’s low rates, some of the best in the business. The ideal OptionsHouse trader is one looking to benefit from both discounted stock and options trading. Sign up for an account here.
- A comprehensive yet user-friendly platform with a variety of useful tools for options trading.
- OptionsHouse offers some of the lowest prices in the business for options traders.
- Stock trades are just $4.95 and there’s a variety of Promotion Codes are another attraction for the investors.
- Its website can be difficult to navigate, and problems have been reported with its live chat and email support.
- Most mutual funds need to be traded by phone, and the firm doesn’t offer futures or forex trading, is inconvenient for anyone looking to trade beyond options.
TradeMONSTER: Best for Intermediate Traders and Mobile Users
Update January 22, 2015: TradeMonster has merged with OptionsHouse, and now operates under the OptionsHouse brand. If you would like to use their trading platform, the features are still available if you sign up for an OptionsHouse account.
An auxiliary of OptionMonster Holdings, TradeMonster was launched in 2006 and it is focused on providing guidance to investors in order to bridge the breach between professional trading and autonomous investment procedures. With more than 20 years of experience in this stream, its founders are dedicated and passionate followers of the trading world.
You Should Sign Up If: The ideal TradeMonster clients are intermediate-level traders looking for an intuitive, user-friendly platform combined with its advance Risk Metrics thumbnail feature.
- Supportive for beginners who need help with the trading system.
- You can keep trading even on the go with the TradeMonster mobile trading app that is free of bugs.
- There can be new surcharges at various points in the trading process, so beware hidden fees.
- Provides some complicated features, which are often not understood by newer users.
Ready to trade? Just make certain that you get all your questions answered first before getting started.