OptionsHouse Review – Trades for $2.95

by Darwin on July 8, 2010

Amazingly, OptionsHouse is able to provide trading commissions at $2.95 per trade.  But that’s just the beginning.  There are some benefits and promotions worth checking out:

  • Free 90 Day Trial of One-on-One Investment Coaching at OptionsHouse.com
  • 90 Day Free Subscription to Morningstar OptionInvestor and StockInvestor at OptionsHouse.com
  • Try Before you Trade with the OptionsHouse Virtual Dollars model
  • Various Options Analysis Tools like Call Spread Investigator and Covered Call Investigator (*I use these strategies routinely)
  • Free professional tools like stock screeners, volatility charts, streaming charts and news
  • 4 Stars from Barron’s, March 15, 2010, 15th annual survey

While you can get some basic information like this off Yahoo!Finance and other sites, having it in real time with a professional platform and options analysis is quite valuable.  If you’re going to spend the time researching and trading, you might as well do it with the best tools.

Some more on pricing:

  • Stock Trades are a flat rate of $2.95
  • Covered Calls/Puts Treated as a single leg options trade + $2.95 for the stock leg
  • Options Spreads, Straddles and Combos Up To 5 for $5
  • Mutual Funds $9.95

…and if you Enter promo code FREE100 you can actually get 100 free trades during the first 60 days.  Even if you only did 50 trades of the cheapest type at $2.95, that’s still almost $150 in trades for free!

Even the Margin’s Cheap!

While I’m not a huge fan of “borrowing to invest” which is essentially what borrowing on margin is, in the event you need to do so, the rate for up to 50K is a respectable 4.45% as of the time of this writing.

Concerned over trading quality for cost?  What I’ve found is that for a typical retail investor, there isn’t really much benefit between high cost and low cost providers as long as the trades are going through as placed and the website isn’t going down all the time.  But, if you’re concerned over quality of service, trade execution or other problems that could arise that you feel higher cost brokers protect you from, just keep your old account!  That’s what I’ve done in the past, I leave some holdings and money with my old account that I’m happy with and start up a new one to take advantage of new benefits, costing, etc.  If you’re using both simultaneously and find OptionsHouse to be suitable, then you’re looking at saving probably $8-10 per trade compared to your existing broker.  For a typical occasional trader that might make a trade only every 2-3 weeks, that’s over $150 annually in savings just for the time it takes to sign up.  So, I view switching to a lower cost option like OptionsHouse as a no-lose situation.  Give ‘em a try.

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