The bottom line: Broker eOption is ideal for active, cost-focused options traders due to a low options contract fee of $0.10. Its offerings may disappoint long-term investors or active stock traders.
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Pros & Cons
- Low options contract fee.
- Low margin rates.
- International account options.
- Automated trading.
- Average trading platform.
- High account fees.
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EOption offers a full suite of brokerage services, but its speciality is in options trading, and it shows in the broker's pricing: The company charges $1.99 per trade where other brokers charge $0, but the rock-bottom 10 cents per contract fee makes the total cost per trade competitive for those trading four contracts or more.
The company also offers $0 commission stock and exchange-traded-fund trades, and in 2020, eOption lowered its minimum investment to $0. Other updates in the past year include a robust new profit and loss performance analytics feature that gives traders better insight into their profitability and success, and new promotions, such as a free stock for signing up.
eOption is best for:
Low options contract fee.
Low margin rates.
eOption at a glance
Stock trading costs
$0 per trade
$1.99 + $0.10 per contract
Account fees (annual, transfer, closing, inactivity)
• $15 annual fee for IRAs. • $60 full transfer-out fee; $50 partial transfer-out fee. • $50 inactivity fee on accounts that haven’t traded at least twice in the past 12 months or have less than $10,000 in credit or debit balances.
Number of commission-free ETFs
All ETFs are commission-free.
Number of no-transaction-fee mutual funds
• Stocks. • Bonds. • Mutual funds. • ETFs. • Options.
Browser-based platform that's highly customizable with zero application installation requirements. Capabilities include charting, technical analysis tools, research and analyst reports; advanced platform for direct access traders.
Average; mimics platform functionality with streaming quotes, charting, market news and account management.
Research and data
Research, news and commentary from nine providers, including Recognia and Hammerstone, available free to all clients.
Customer support options (includes website transparency)
Phone, email and chat from 8 a.m to 7 p.m. EST, and in-person meetings from 8 a.m. to 6 p.m EST.
Free share of Apple or Tesla stock for qualified new accounts, and a $100 transfer fee rebate.
Where eOption shines
Low options contract fee: Many brokers now charge no base commission for options trades, so traders only pay the per-contract fee, which frequently costs around $0.65 per contract. At eOption, the cost to trade options is $1.99 plus a per-contract fee of 10 cents. What that means is investors who frequently trade four or more contracts in a single trade will come out on top at eOption.
Also of note are the broker-assisted trade costs, on stock, options and ETF trades: an additional $6 in most cases, which is cheap compared with other brokers' $20 to $25 surcharge.
Automated trading: Part of eOption’s target audience is investors who use automatic trading based on newsletter suggestions. How this works: Account holders subscribe to one of the roughly 60 participating newsletters, then authorize eOption to automatically execute recommended trades from that newsletter. Customers can choose the maximum amount per trade — based on dollar amount, number of contracts or percentage of account value — and change their auto-trading subscription at any time. The cost is $2 per trade for equities and $2 base plus 10 cents per contract for options.
Is this a good strategy? That’s debatable. When trades are triggered automatically by a newsletter trading alert, investors have no time to review the order before it's executed. But if you frequently follow the directives of investing newsletters that participate in eOption’s service, putting things on autopilot might be appealing.
Paper trading: For investors new to trading (and especially options trading), eOption has an attractive feature: a free paper trading tool, which is available even to nonclients. This gives investors $100,000 in virtual cash to use as they research and evaluate trading ideas, test strategies, actively monitor a simulated portfolio's performance and create a watch list — all without putting any real money on the line.
Margin rates: Margin traders, take note: eOption has some of the lowest margin rates available. As of late 2020, the base rate for account balances of less than $25,000 was 7.75%. That drops to as low as 4.75% for balances of $250,000 and above.
International investors: The broker allows non-U.S. residents from some countries to open an international account. (Those countries are Australia, Austria, China, Germany, Ireland, Luxembourg, Mexico, the Netherlands, New Zealand, Singapore, South Africa, Switzerland, England, Northern Ireland, Scotland and Wales.) Accounts can be opened with a minimum of $25,000 in any combination of cash and securities.
Where eOption falls short
Trading platform: For a broker that appeals to active traders, eOption's trading platform is a bit underwhelming. The web-based platform has fairly standard features, including news, analyst reports, the ability to place multi-leg options trades, charting features, a suite of technical analysis features and trading directly from options charts. Compared with other brokers' apps, eOption's has more functionality, with real-time quotes, charting and the ability to execute multiple order types.
For investors with a minimum balance of $25,000, eOption offers direct-access trading via Sterling Trader Pro, DAS|Web and DAS|Pro platforms. These platforms carry additional fees, however.
Fees: Individual retirement accounts are charged a $15 annual fee, and the broker charges a $50 inactivity fee on accounts that go 12 months without at least two executed trades or have less than $10,000 in credit or debit balances.
Beginner education: The offerings are definitely geared toward a more knowledgeable trader. Advanced traders will appreciate the breadth of analyst reports, corporate filings, calendars of earnings reports and economic reports and a news aggregate service for trade research purposes. And while there's an impressive collection of educational resources around options trading powered by the Options Industry Council, the guides themselves could still be a bit overwhelming for true beginners. Again, eOption is positioned for advanced investors who may not miss this information, but other brokers provide much more support.
Is eOption right for you?
Focused on providing a low-cost experience for active traders, eOption fulfills its mandate, especially for options traders. Those willing to pay more in commissions at other brokers can find more robust platforms and more investment guidance. But for active and cost-conscious options traders, eOption is one of the best choices.
Anna-Louise Jackson contributed to this review.
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