Optionshouse has been acquired and discontinued. As an alternative,
we recommend Charles Schwab Brokerage.
About OptionsHouse by E*Trade
Since 2005 OptionsHouse by E*Trade (OH) has been providing investors with low prices and a high-tech trading platform. Founded by PEAK6 Investments, a leader
in developing high-tech tools to manage the risk of options trading, OptionsHouse by E*Trade began as an options trading platform exclusively before expanding
in to virtually many other investment areas.
In 2014 the holding company of OptionsHouse by E*Trade, OptionsHouse by E*Trade LLC, completed a merger with competitor and fellow Chicago based online trading firm
tradeMONSTER, making way for an expanded customer base and brand new trading platform. With this merger, the new firm is now in fierce competition
with the industry giants like Schwab, Fidelity, and Charles Schwab.
Last year OptionsHouse by E*Trade was acquired by E*TRADE and is now a part of one of the
largest brokerage firms in the world.
OptionsHouse by E*Trade Fees and Account Minimums
OH introduced itself in to the trading world by being a low-cost provider and it continues to live up to that expectation. Stocks can be traded for
a $0 flat fee, significantly higher than more established firms like E*Trade and Charles Schwab whose fees are $0. Options are traded at the
same $0 flat fee plus $0.50 per contract (making it a total of $7.45 to trade 5 options contracts), which once again makes the platform a market
leader in options trading fees. Mutual fund trade fee of $20 is also cheap compared to many other discount brokers.
There is no minimum to open an account, and the minimum to trade on margin is $2,000 which compares favorably to other industry competitors.
OptionsHouse by Etrade Overview
OptionsHouse by Etrade is an internet-based stock trading platform. They were an independent company until they were acquired by E-Trade, another trading platform.
What makes OptionsHouse by Etrade so appealing to many users is its simple interface and inexpensive commission, especially for those young adults
new to investing and trading.
Signup
The signup process is like that of any other financial account. It requires some pedigree information such as an accurate home address and social security number. After signing up, the user simply deposits money into the account, and may then begin buying and selling stocks as they wish. The process is very easy, well designed, and offers a ton of information to the account creator right from the start.
Rates and Fees
OptionsHouse by Etrade charges commission on each purchase of stock, futures contract, and options contract. Stocks cost $0, futures cost $1.50/contract, and options cost $0.50/contract plus the $0 base rate. All of these rates beat the competition (Scottrade, Fidelity, etc.). Their fees include items for outgoing wires, returned checks, IRA closings, and many others that can be found on their website. These fees are comparable to those of the competition and many users may not be charged any of them.
Usability
Jumping into the world of investing can be daunting. Add to that how much information OptionsHouse by Etrade’s platform offers, and it can be hard to determine where to begin. Other trading outfits seem to have similar features, with their own graphs, layouts, and data views. Fortunately, OptionsHouse by Etrade features a vast and informative “Learning and Resources” page that has a ton of content including videos, how-tos, and articles that explain how it all works together. From simple things like orientation and the fundamentals of the site, to more complex topics like research, cost basis, and strategy, everything on that particular page is designed to help the user become familiarized and comfortable with trading on their platform.
Buying
When a user purchases shares of stock from a company on the site, a window pops up showing the number of shares, cost per share, and a few other things to help the user set up exactly when they’d like to buy the shares. This allows them to postpone the purchase if they choose. It’s all laid out finally with the total estimated cost which will be deducted from their account, including commission, which goes to OptionsHouse by Etrade for handling the trade. The buying process is straight forward and requires only basic computer knowledge and financial understanding.
Once the stocks are bought, the shares are shown in a small area of the window on the left. In that window it shows the company’s trading abbreviation (AAPL for Apple, as an example) as well as its current stock market price and the “mark” which is the price that was paid by the purchaser. The user can modify this area to show more or less information depending on their preferences. Things such as the last change, bid, ask, and cost basis can all be added as separate columns in this area, making for a very efficient and versatile layout. The data contained on this chart is updated live over the internet as long as the market is open.
Dividends
Some stocks offer dividends, which are paid at certain increments throughout the year to stockholders. This is an area where OptionsHouse by Etrade needs to improve. It doesn’t show when the user is paid their dividends as clearly as it shows how the account has grown in value from the stocks appreciating over time. It’s possible to pull up a dividend history, which shows what a company offers based on their past, but no way to see what the account holder in particular has earned. This can be limiting if the user is interested in investing more into companies that utilize dividends.
Selling
After the account holder makes, or loses, enough money, they may choose to sell the stocks they’ve acquired. The process is equally as basic as the buying process. They simply click on the stock, then click “sell,” and similar options come up just like when the stock was bought. Again, this includes the limit price, as well as some trade automation options like “one cancels other” and “fill trigger.” As soon as the stock sells at the price specified, which is not always instant, the money is automatically placed in the user’s account and displayed in the account window.
Transfers
When the account manager decides it’s time to transfer the money earned to an outside account, the “transfer funds” button will bring up a separate window where one of four options may be chosen. Each one has their advantages and disadvantages. A wire transfer may incur transfer fees, for example. It also allows the user to add additional funds to their OptionsHouse by Etrade account if they choose. Each choice is spelled out so that there can be no confusion regarding which option is best for the situation. Depending on the selection, the money should be transferred within approximately 5 business days, except in the case of a check, which may take longer to receive, since it relies on mail. This multiple choice system is efficient and allows the trading platform to keep up with the many transactions that could occur in a single day of trading by allowing the user to choose the option that best fits their needs.
Summary
Overall, OptionsHouse by Etrade is a great experience for both advanced and novice young traders and investors. While it could be modernized a bit, the no-nonsense design is
easy to understand and navigate after getting past the learning curve. With several layout options, simple buying process, and a variety of ways to visualize
cashflow, anyone can learn to play the stock market, and maybe even make some money doing so.
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