Updated July 4, 2016

OptionsHouse Review: Pros and Cons

Is OptionsHouse a Smart Choice for Beginner Investors?
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OptionsHouse is one of the lesser known online brokerages, but we think it deserves attention. Read our in-depth review to see if it's right for you.

OptionsHouse Coupons
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Overall Score

4.3

Stock Trading

5.0

Options Trading

5.0

Mobile App

4.0

Commissions and Fees

5.0

Ease of Use

4.0

Research

3.0

Trading Platform

4.0
5-point scale (the higher, the better)

Pros and Cons

  • Low fees
  • Trading platform
  • Extensive options tools
  • Limited mutual fund selection
  • Limited in-depth research
  • Complicated for novices

Bottom Line

Cost effective trading platform for experienced investors

OptionHouse's fee structure is among the lowest around, and the platform offers great support for investors wanting to get into options. This more complicated investment type is often overlooked or marginalized by some of the more mainstream platforms.

But beginners beware: the site isn't as user friendly for anyone without a solid background of investment experience and knowledge.

Benefits: Why We Like It

  • Low Fees: Most trades on the OptionsHouse platform will cost you $4.95, which is on the low end of the spectrum for transaction fees charged by online brokerages. For those looking to trade options, there is an additional 50 cent fee per contract, but that's still lower than competing low cost brokerage TradeKing's 65 cent fee per contract.

    Mutual funds trade at $20, but the broker doesn't provide any mutual funds with no transaction fees.

    Opening an account with OptionsHouse is also easy and cheap. There are no required minimum deposits for trading, although the company recommends at least $1,000. Opening a margin account does require a minimum deposit of $2,000 to get started.

  • Virtual Trading Platform: Beginning investors can take advantage of the Virtual Trading Platform and virtual broker bucks immediately upon signing up for an account. This feature lets you pretend-invest up to $5,000 in securities to learn the ropes of investing before risking real money. It's a nice way to get introduced to the world of investing.

  • Options Trading: Given its name, you'd expect OptionsHouse to be particularly useful for options trading, and for the most part that's true. There are a number of investment tools on the site to help you track investments you're interested in and execute trades, and the comparatively low cost per contract for options investing makes this an attractive brokerage.

  • Low cost IRA Accounts: When it comes to individual retirement accounts, OptionsHouse provides one of the lowest cost solutions around. Investors can choose between a Traditional, Roth, SEP, or Educational IRA, all with no setup or maintenance fees. However, the broker will charge you a $60 fee if you decide to close your account.

    An OptionsHouse IRA makes sense for investors who plan to fund their retirement primarily through stock and options trading. Those who would like to build a portfolio with mutual funds should consider another broker.

Disadvantages: Why You Might Want to Look Elsewhere

  • Research: There's not much in the way of research tools. The tools provided by OptionsHouse are fine if you already have a general idea of the type of security you want to purchase, but if you're looking for more guidance or need the input of investment professionals, you'll probably have to look to third-party sources like Morningstar and Bloomberg.

    The broker does offer webinars on investing, and users can take advantage of OptionsHouse's sister site OptionsMONSTER and its ResearchLAB platform, but it lacks significant third-party research. Also, it doesn't make it straightforward for an options newbie to get up to speed. New investors may be better off using another online brokerage that caters to them with in-depth "how to" videos.

  • Limited Availability of Mutual Funds: OptionsHouse doesn't have a great selection of mutual funds available for purchase through its site.

  • Not Beginner Friendly: Despite the Virtual Trading Platform and $5,000 in virtual dollars, there's not much else in the way of assistance for new investors. They can test whatever knowledge they do have in the Virtual Trading Platform and start playing around with trades, but those who feel a need to read up on the basics before getting involved might find the platform unhelpful and perhaps even intimidating.

Who It's Best For

OptionsHouse is a great choice for investors with experience, and it's an especially good choice for those who want to get involved in options investing. It has low prices and no hidden charges that are going to eat up the money you earn.

Beginners should be wary, though - to get the most out of the platform, you'll need at least a basic understanding of the different types of securities, an idea of what you're looking to invest in, and a list of third-party financial sites that you trust for reference.

Tip: You don't need to trade options to get started, which is good, because options trading can be confusing for beginners. But those who want to get into trading options have a great Virtual Trading Platform to learn on.

TRADING PLATFORM

OptionsHouse uses a customizable trading platform that can show as much - or as little - information as you want. This flexibility will be helpful for first-timers who might be overwhelmed by the amount of real-time information flying across their screen.

The platform comes with a number of proprietary tools meant to help traders quickly find and purchase new investments. Unfortunately, several of these tools (like the Trade Generator) are more for trading options than for stocks, ETFs or mutual funds.

These tools are mostly intended for investment tracking as opposed to discovery. They're useful in helping you evaluate a specific stock or ETF or deciding between two similar companies, but they are not as great if you're doing more general research and don't yet have a clear idea of the stock or ETF that you'd ultimately like to invest in.

MOBILE APP

The OptionsHouse free mobile app is available on Apple and Android devices and lets investors make trades, set order quantities and get real-time information. The app is well designed, easy to use, and was rated four and a half stars by Barron's.

CUSTOMER SERVICE

OptionsHouse provides customer service on weekdays from 7 a.m. to 7 p.m. Central Standard Time. During those hours, you can call, email or live chat. During other times, customer support is limited.

How it Compares

TradeKing: Another lesser known online brokerage with a very similar fee structure, TradeKing has some more support for beginning investors and more robust research tools. Two big points in OptionsHouse's favor, though are lower per contract fees on options trades (50 cents vs. 65 cents at TradeKing) and the ability to trade in futures (which are not currently supported by TradeKing).

 

OptionsHouse

TradeKing

 

Benefits and Features

Stock Trading
$4.95 per trade
$4.95 per trade
Options Trading$4.95 + $0.50 per contract (only one base charge per spread, straddle, or combo)$4.95 base + $0.65 per contract (only one base charge per spread)
Mutual Fund Trading
$20
$0 to buy/sell load mutual funds
$9.95 to buy/sell no load mutual funds
Commission Free ETFs
5 from O'Shares
 
Penny StocksAdditional fee of $0.005 per share of stock traded for stocks priced $2.00 or less that are not options eligible.$0.01 per share on the entire order for stocks priced less than $2.00. Maximum commission per order not to exceed 5% of the trade value, with minimum commission of $4.95. Minimum investment of $100 per order in OTCBB and Pink Sheet stocks.
Broker Assisted Trades
$25 + Regular Commissions
$20 + Regular Commission
Inactivity Fee
$0
$50 annual charge if you have not made any trades in the last 12 months and the combined household value of your accounts is less than $2,500
Maintenance Fee
$0
 
Minimum Deposit$0 minimum funding level to open a new account.
$2,000 minimum funding for a margin account
$2,000 account minimum to establish checking writing privileges and $10,000 account minimum to establish debit card privileges
$0
Mobile App
Forex Trading 
Futures Trading
 
Customer Service
(877) 598-3190
(877) 495-5464 (Monday to Friday 8am to 6pm Eastern)
Online Community Trader Network to connect with other investors
Seminars
Trading webinars
 
Virtual Trading
 
Stock Trading
Options Trading
Mobile App
Commissions and Fees
Ease of Use
Research
Trading Platform
Online Community

Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details.

OptionsHouse: Pricing information from published website as of 01/26/2015

TradeKing: Pricing information from published website as of 01/19/2015

OptionsHouse vs Scottrade: Scottrade charges more to trade stocks and options, but you get an easier to use platform, banking services, and over 500 branch locations to help you out.

 

OptionsHouse

Scottrade

 

Benefits and Features

Stock Trading
$4.95 per trade
$6.95 per trade
Options Trading$4.95 + $0.50 per contract (only one base charge per spread, straddle, or combo)
$6.95 + $0.70 per contract
Mutual Fund Trading
$20
No Fee to Buy/Sell/Exchange No-Load, No-Transaction Fee Funds
$17 to Buy/Sell/Exchange No-Load Funds
$0 to Buy Load Funds and $17 to Sell/Exchange Load Funds
Commission Free ETFs
5 from O'Shares
 
Penny StocksAdditional fee of $0.005 per share of stock traded for stocks priced $2.00 or less that are not options eligible.$6.95 per trade + 0.5% principal for any stock trading under $1
Broker Assisted Trades
$25 + Regular Commissions
$32
Inactivity Fee
$0
$0
Maintenance Fee
$0
$0
Minimum Deposit$0 minimum funding level to open a new account.
$2,000 minimum funding for a margin account
$2,000 account minimum to establish checking writing privileges and $10,000 account minimum to establish debit card privileges
$2,500 for brokerage accounts
No account minimum for retirement accounts
Banking Scottrade Bank has no monthly maintenance fees, ATM reimbursement program, online bill pay, and mobile banking.
Mobile App
Desktop App ScottradeELITE (requires you execute 9 or more stock or option trades during the past 3 months, have $25,000 in your primary account, or have $15,000 in your primary account and combined linked assets of $25,000 or more)
Futures Trading
 
Customer Service
(877) 598-3190
(800) 619-7283 (Monday to Friday 6am to 1am Eastern; Saturday and Sunday 9am to 7pm Eastern)
Locations 
More than 500 branch locations
Seminars
Trading webinars
In-person branch seminars, online events and live webinars
Virtual Trading
ScottradeELITE offers virtual trading
Stock Trading
Options Trading
Mobile App
Commissions and Fees
Ease of Use
Research
Trading Platform
Banking
Customer Service

Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details.

OptionsHouse: Pricing information from published website as of 01/26/2015

Scottrade: Pricing information from published website as of 03/27/2017

No review of OptionsHouse would be complete without taking a look at two of the most popular online brokers: E-Trade and TD Ameritrade.

Did you know: OptionsHouse is part of the E*TRADE family?

 

OptionsHouse

E*TRADE

 

Benefits and Features

Stock Trading
$4.95 per trade
$6.95 per trade
$4.95 per trade if you make 30+ trades a quarter
Options Trading$4.95 + $0.50 per contract (only one base charge per spread, straddle, or combo)$6.95 + $0.75 per contract
$4.95 + $0.50 per contract if you make 30+ trades a quarter
Mutual Fund Trading
$20
$0 for no-load, no-transaction-fee funds
$19.99 for transaction-fee funds
Commission Free ETFs
5 from O'Shares
118 including ETFs from WisdomTree, Global X Funds, and db-X Deutsche Bank
Penny StocksAdditional fee of $0.005 per share of stock traded for stocks priced $2.00 or less that are not options eligible.
Broker Assisted Trades
$25 + Regular Commissions
$25 + Regular Commission
Inactivity Fee
$0
$0
Maintenance Fee
$0
$0
Minimum Deposit$0 minimum funding level to open a new account.
$2,000 minimum funding for a margin account
$2,000 account minimum to establish checking writing privileges and $10,000 account minimum to establish debit card privileges
$500 for brokerage accounts
No account minimum for retirement accounts
Banking Checking account offers no minimum balance requirements, free online bill pay, and unlimited debit card and check transactions.
Mobile App
Desktop App E*TRADE Pro (requires you execute at least 30 trades during a calendar quarter or maintain brokerage account balance of at least $250,000)
Forex Trading 
Futures Trading
Customer Service
(877) 598-3190
(650) 599-0125
Locations 
30
Online Community ETrade Community lets you exchange trading and investing ideas with other ETrade customers.
Seminars
Trading webinars
Live events and educational seminars at local branches.
Virtual Trading
 
Stock Trading
Options Trading
Mobile App
Commissions and Fees
Ease of Use
Research
Trading Platform
Banking
Online Community

Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details.

OptionsHouse: Pricing information from published website as of 01/26/2015

E*TRADE: Pricing information from published website as of 03/13/2017

 

OptionsHouse

TD Ameritrade

 

Benefits and Features

Stock Trading
$4.95 per trade
$6.95 per trade
Options Trading$4.95 + $0.50 per contract (only one base charge per spread, straddle, or combo)
$6.95 + $0.75 per contract
Mutual Fund Trading
$20
$0 for no-transaction-fee mutual funds
$49.99 for no-load mutual funds
$0 for load mutual funds
Commission Free ETFs
5 from O'Shares
Over 100 including 34 Equity Funds, 33 Bond Funds, 31 International Funds, and 2 Commodity Funds.
Penny StocksAdditional fee of $0.005 per share of stock traded for stocks priced $2.00 or less that are not options eligible.
Broker Assisted Trades
$25 + Regular Commissions
$44.99
Inactivity Fee
$0
$0
Maintenance Fee
$0
$0
Minimum Deposit$0 minimum funding level to open a new account.
$2,000 minimum funding for a margin account
$2,000 account minimum to establish checking writing privileges and $10,000 account minimum to establish debit card privileges
$0
Banking Cash Management account offers free ATM withdrawals, no monthly maintenance fees, free online bill pay, and free check writing.
Mobile App
Desktop App 
thinkorswim
Forex Trading 
Futures Trading
$2.25 per contract (plus exchange & regulatory fees)
Customer Service
(877) 598-3190
(800) 669-3900
Locations More than 100 locations in 34 states
Seminars
Trading webinars
Online webcast
Virtual Trading
Paper Trading to practice/test strategies and ideas.
Stock Trading
Options Trading
Mobile App
Commissions and Fees
Ease of Use
Research
Trading Platform
Banking
Online Community

Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details.

OptionsHouse: Pricing information from published website as of 01/26/2015

TD Ameritrade: Pricing information from published website as of 03/13/2017

BOTTOM LINE: Why OptionsHouse

To review, here are the pros and cons when considering OptionsHouse:

Pros:

  • Low fees
  • Virtual trading platform
  • Extensive options trading tools

Cons:

  • Limited mutual fund selection
  • Lack of in-depth research/education
  • Options trading might be too complicated for novices

When it comes to costs, few can compete with OptionsHouse. This discount broker is built around the idea that it's not how much money you make, it's how much money you keep. This low-cost emphasis has helped OptionsHouse stand out in an increasingly crowded marketplace of online brokers.

The broker offers some of the lowest rates on stocks, ETFs, mutual funds and retirement accounts. It's also one of the largest options trading firms in the country, so you can get a lot of investing done through its site.

OptionsHouse's lack of research and limited range of offerings make it hard to recommend as your sole brokerage account. Instead, OptionsHouse works best as a companion to a larger broker like E-Trade or Scottrade, which will give you access to significantly more investments for higher commissions.

Still, for a new trader, OptionsHouse is great way to test the investment waters, especially with the Virtual Trading Platform. And as you learn more, you'll likely want to explore other, well, options for your investment future.

Ross Frasier is a research analyst at CreditDonkey, a stock broker comparison and financial education website. Write to Ross Frasier at ross@creditdonkey.com. Our data-driven analysis has been recognized by major news outlets across the country and has helped families make savvy financial and lifestyle decisions. (read more)

Disclaimer: Opinions expressed here are those of the author's alone. Please support CreditDonkey on our mission to help you make savvy financial decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

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