OptionsHouse Review

I have recently started taking a look at the options market on Buy Like Buffett. Options investing is a great way to control a position in a stock without having to invest all of the dollars that a common stock may cost. It is also useful for helping to protect yourself from downward movement in the market.

In keeping with the theme of options investing, let’s take a look at a broker that specializes in stock investing and options investing known as OptionsHouse.

OptionsHouse History

OptionsHouse is one of the more established options brokers on the Internet. The brokerage firm started out dealing with options trades only and eventually expanded its operations into letting customers buy stocks. OptionsHouse is known for its low pricing which makes it one of the lowest cost brokers in the industry.

Barron’s voted OptionsHouse the #1 options broker in the industry for 2011.

Let’s take a look at the pros and cons of OptionsHouse to see how it stacks up against other brokers.

OptionsHouse Advantages

Lowest Trading Fees

OptionsHouse has the lowest fees of any broker that I have reviewed. The fees are lower than those of Scottrade, E*Trade, TD Ameritrade, and TradeKing. OptionsHouse offers stock trading for just $3.95. Investors will have a hard time finding any broker that can beat those prices.

Options trading cost $5 for 5 option trades. Anything more than that amount costs $8.50 and 15 cents per contract. That is remarkably low pricing for those that trade a large amount of options contracts.

Trading Platform

OptionsHouse has one of the best trading platforms that I have found. I am very picky about the platforms at online brokers because too many have vanilla trading platforms that can be difficult to use. OptionHouse trading platform is incredibly easy to use and has a ton of features that make trading quick and simple.

Interactive Investment Coaching

OptionsHouse features live interactive investment coaching at its online campus. Customers can take advantage of this live coaching to learn the best strategies for buying and selling options. One on one coaching is available for a fee for those that need personalized attention. I found that the webinars are full of information that can benefit both rookie and veteran traders.

Virtual Trading

The virtual trading platform is a plus because you can demo an account before deciding whether or not to open an account. Many brokers do not offer demo accounts and force you to open an account before trying out the platform. OptionsHouse lets you play around with $5,000 virtual dollars that you can use to place stock and option trades with.

Customer Service

OptionsHouse has a number of ways that make it easy to get in contact with a customer service representative. You can use the phone, email, or fill out a form on the company’s website. A response typically only takes a few hours via email. That is impressive considering the fact that some brokers take days to reply.

OptionsHouse Weaknesses

Minimum Balance Requirement

While many discount brokers have reduced their minimum balance requirements or eliminated them all together, OptionsHouse has not. You need $1,000 to open a trading account. That is not a lot of money but it is more money than many competitors require. Scottrade will let you open an account for $500 and TradeKing has no minimum account opening requiremenr.

Investment Options

While OptionsHouse excels at placing options and stock trading, the company lags behind when it comes to fund offerings. Like most options brokers they have a limited selection of mutual funds and exchange traded funds compared to larger retail brokerages.

OptionsHouse’s Grade: B

While I do not have an account at OptionsHouse I would recommend the broker to anyone that is looking to get involved in options investing. OptionsHouse pricing makes it an even cheaper alternative to the low cost broker TradeKing. I do think that TradeKing has a few more features in terms of free investor education and tools that justify the $4.95 pricing compared to OptionsHouse. That is why I have given TradeKing a slightly higher grade. Anyone that is in the market for the lowest cost broker and wants to do some serious options buying should take a closer look at OptionsHouse.

Comments

  1. avatar optionsdude says:

    This certainly sounds like a good price for options trading. Is that 5 contracts traded for $5 or the first 5 trades are $5, with an increase after that. If it is 5 contracts for $5, that is a good price and would fit nicely with a retail investor buying 5 blocks of stock for selling calls.

  2. avatar Richard says:

    Meh… I’ve had the rug pulled from under me by too many brokers now. It’s very easy to bait and switch users by offering seemingly low fees and jacking them up later. See what Zecco and Merrill Edge did recently.

  3. I like the virtual trading / demo platform feature … that would help me decide if I even want to get involved in options trading to begin with, and yes, if I like this company’s platform.

  4. avatar Gavin says:

    I think Optionshouseare the best broker for beginners. I have both an Optionshouse and Interactive Brokers account. IB are much a little bit cheaper, but the Optionshouse platform is much more user friendly. They have loads of tools available as well, I particularly like the P&L calculator which allows you to evaluate your trades based on different inputs for volatility and time to expiry.

    Their virtual trading is also pretty good, and you can set up a free account online within minutes without having to open and fund a live account.

  5. avatar Jeff says:

    OptionsHouse sucks so bad. I signed up for a account. The application process literally takes me 1 hour to complete. It asked every single non-related questions, like my income, my savings, my employee information, federal tax bracket(LOL), net worth, average trading per year, years of experience, investment objects, trading strategies(LOL, why do they care). These are all required field, not like optional. After that they ask me to tax over my social security card copy and my driver’s license copy. LOL, honestly, who ask for social security card!? Even my mortgage application doesn’t ask for that. If it was a loan account, then I probably understand. But this is a broker account, not a loan account. I am not trying to borrow money from them, I don’t understand why do they want my social security card They are so not trusting me. I have to say here that it’s not like I have bad credit at all, I have really high credit that my last car loan I was able to do the highest credit bracket. So I really cannot understand why they ask for social security card. After that, the interesting part comes, an agent emailed me and ask for my employment information. Originally, I prefer to stay anonymous, but they said they need that information to continue the application, so I sent them the information. The next day, the agent replied back said they did an online search on my profile and my resume, and said that the employment information I sent them wasn’t correct, LOL. How on earth would a company search online on people’s history and profile and tell me that they take the version online!? OMFG. Are you kidding me? I am not even sure how they get my resume, that could even be illegally. I told them the information I sent was correct, and the profile they search online could be a different person or updated. They replied the same day and said they did not approved my application. Their business model is really so bad that they search you online. They really made me felt like I did something wrong, so that they are like FBI/CIA or something that they want to investigate every single non-related detail, and investigate your background so much. I am not even completely noob on brokers accounts or something, because I currently have many other brokers account like scottrade, etrade, td ameritrade, and they never ask these details or my social security card, driver’s license. All these stories are all true, I wasn’t making anything up. I still kept all the contact record in my email. I strongly suggest go with any broker by OptionsHouse.

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