OptionsHouse review (January 1, 2016)
is an online brokerage firm that offers trading in stocks, options, and mutual funds (but no forex). It was founded in 2006 by its then-parent company PEAK6 Investments - a very successful proprietary options-trading firm. Although it was one of the newer entrants into the online brokerage market, it steadily built a good reputation, and has been rated among the best options brokers by Barron's.
In 2014, OptionsHouse merged with Trademonster. The combined company kept the OptionsHouse branding, but used the Trademonster platform. The combined company also used Trademonster's higher commission rates ($0.50 per option vs OptionsHouse's $0.15 per option) - although OptionsHouse let current customers hold onto their old rates. OptionsHouse currently clears through Apex Clearing Corp after switching from Penson on June 6, 2012.
Their rate for stock trades is a $4.95 flat rate. For options, the rate is $4.95 + $0.50 per option.
The OptionsHouse site is interesting because they use dynamic web pages to stream everything (quotes, account balances, order status, etc.), instead of using downloadable software. They have stated that they believe customers prefer having access to a robust trading platform no matter where they are (home, work, mobile, etc.) and customers are annoyed with having to download software from different locations (as well as not having their customizations available at different locations).
Tools & Benefits
Like all brokers, most of the in-house tools that OptionsHouse offers (like screeners, webinars, fundamental research) gives you information that you can get elsewhere. Hence, these tools are not particularly useful because most traders tend to have outside sites (like Yahoo Finance) where they like to get their charts, fundamental research, etc. Even so, OptionsHouse does offer some options tools which are more sophisticated than most brokers', such as an option probability calculator.
Here are some other OptionsHouse benefits:
- Tons of freebies for new accounts. Some of their various sign-up bonuses and promotions codes have been: 100 free trades, free ACAT (account transfer) or wire fees, or a free subscription to The Wall Street Journal.
- A very generous referral program.
- A virtual trading account for people who want to paper trade.
- The MAXIT tax calculator, which calculates your taxable trading profit and loss for the year and generates the required forms. Personally, I feel more comfortable doing my taxes myself. These tools may be attractive for some traders, but given the trouble that the new IRS trading rules (Form 8949) has caused, most professional traders would probably feel more comfortable using software from the market leaders when it comes to trader taxes - TradeLog and GainsKeeper.
used to be my #1 recommended options broker because of their low rates. But after the merger with Trademonster, I don't see any reason to prefer them over another firm. The only reason I can see going with OptionsHouse if you didn't want to pay the higher options commissions of $0.50-$1.25 at other firms. The OptionsHouse option commissions, at $0.50 per contract, is still at the lower end of the industry. But, the tools you get for going with one of the $0.75 brokers - specifically Ameritrade - are very much worth the extra price.