Founded in 2001, and based in Chicago, Illinois, OptionsXpress is an online options and futures brokerage firm. The company is a subsidiary of Charles Schwab & Company.
OptionsXpress incorporates innovative technology into its trading platform and is one of the leading online investment services. And before getting into any of the details – yes, it's well worth investigating if you're not familiar with it.
How OptionsXpress Works
The company offers a powerful trading platform that offers sophisticated investor tools, like Idea Hub, that enables customers to quickly and easily find option trade ideas. They provide a Trading Patterns tool, that gives the investor insight as to what the market is trading, and displays the day’s top option trades. The Streaming Charts tool allows you to customize your view of the market with more than 100 different technical studies.
The Volatility View function allows investors to look back over a stock’s price movements over three month-, six month-, and 12 month-movements. Then there’s the Trade and Probability Calculator, an innovative tool that allows you to evaluate your strategy before placing a trade. It even allows you to run “what if” scenarios, by customizing the options expiration date, investment amount, and volatility.
The platform includes a number of tools, which is important because it also enables you to trade in an almost unlimited number of asset classes.
Investment securities available through OptionsXpress includes:
- Certificates of deposit (CD) – 6 months or longer (FDIC insured to $250,000)
- US Treasury securities – 3 months or longer
- Agency securities – 6 months or longer
- Corporate AAA – 6 months or longer
- Municipals AAA – one year or longer
- Futures options
- Covered calls
- Married puts
- Mutual funds
- Exchange traded funds (ETFs)
The platform provides 24-hour support (at no charge). It also provides online Forex Education through their Forex webinars and online self-study course designed to help you become a better trader.
OptionsXpress Mobile. The mobile app enables you to do virtually all that you can do on the online platform. It allows you to trade stocks, options, futures, futures options and other trade types with the following features:
- Trade with the All-In-One Trade Ticket (enabling you to place advanced options, stock and futures orders all in one place)
- Manage positions and orders
- Get real-time quotes
- Easy access to options and futures chains
- Create & manage watchlists
- Stay abreast of the market with real-time news
Virtual Trade. This tool starts you trading with a free $25,000 virtual trading account. This gives you access to the OptionsXpress trading platform, including trading tools and resources to help you develop your trading skills before attempting to do so with real money.
The platform also includes an education center, that includes webinars, workshops, and online videos so you can keep your investment skills sharp throughout your trading career.
Account Security. Your account will be covered under the Securities Investor Protection Corporation (SIPC), that will protect you from the financial failure of the broker-dealer (but not market price fluctuations), for up to $500,000, which includes $250,000 for cash claims.
But that’s not all. The company provides additional coverage, at no cost to you, through excess SIPC coverage, up to a maximum of $24,500,000 per customer, including $900,000 in cash claims.
Transaction Fees and Account Minimums
For starters, OptionsXpress has no account minimums. There are also no platform fees, and no charge for broker assistance.
Transaction fees are as follows:
- Stocks – $8.95 per trade
- Bonds – $5.00 per bond / $9.95 minimum
- Mutual funds – $9.95 plus load fee
- Futures – $3.50 per contract
- Option on futures – $3.50 per contract
- Forex – NO FEES (OptionsXpress is compensated through the bid/ask spread)
- Options – 1-10 contracts $14.95 flat standard rate (or $12.95 flat Active Trader Rate); 10+ contracts $1.50 per contract standard rate (or $1.25 per contract Active Trader Rate)
- Spreads, straddles and contracts – 2-10 contracts $14.95 flat standard rate (or $12.95 flat Active Trader Rate); 10+ contracts $1.50 per contract standard rate ( or $1.25 per contract Active Trader Rate)
Retirement Plans Available at OptionsXpress
You can hold any of the following retirement plan types in your OptionsXpress account:
- Traditional Individual Retirement Accounts (IRAs)
- Roth IRAs
- Rollover IRAs (from an employer-sponsored plan, like a 401(k) plan)
- Simplified Employee Pension Plan IRA (SEP IRA), which allows the self-employed or owners of small companies to create their own retirement plans.
- Minor IRAs, both Traditional and Roth – for children under age 18 with earned income.
You can also establish a Coverdell Educational IRA, which is an account designed to help fund your child’s education. It functions something like a Roth IRA in that contributions are not tax-deductible, but any earnings on the account are permitted to accumulate on a tax-deferred basis. The proceeds are tax exempt as long as they are disbursed for educational purposes for the intended beneficiary prior to his or her 30th birthday, but it may also be transferred to another family member.
Will OptionsXpress Work For You?
With all of the many different online trading platforms that are available today, it can be difficult to isolate a single platform that will work best for you. However, OptionsXpress definitely rates a place on your very short list of prospective choices.
Not only do they provide an excellent trading platform, but the fee structure is very competitive. The company offers 24 hour customer service – at no charge – which is a service combination that is actually fairly rare with online brokerage firms. The virtual trading platform, as well as the education center and Forex webinars, provide you with an opportunity to sharpen your trading skills on a continuous basis.
The affiliation with Charles Schwab & Company is another compelling factor. Schwab is one of the best respected companies in the investment field, and it adds a level of competence and stability that few other trading platforms can offer.
OptionsXpress packs a lot of punch in one platform, and is definitely worth checking out.