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optionsXpress Review

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PROS / With its focus on education, this service and its platform can help you understand how to best trade options.

CONS / Options trading starts to get pricey when you trade a large number of contracts.

 VERDICT / New traders find the education and resources helpful, but experienced investors who trade in high volumes may find optionsXpress less cost effective than other online options services.

While the optionsXpress platform by Charles Schwab allows you to trade many kinds of securities, it specializes in options, making it a great choice for traders new to these complex investments. This online options trading service puts strong focus on education so you can understand what to expect and which trading tactics should work best with your strategies. While the platform itself is an excellent choice, some of this broker's fees are higher than with other services, and those fees become more noticeable the more contracts you trade.

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For active options traders, there is a minimum cost of $12.95 per order. Once you exceed that minimum, each option contract is $1.25. Unlike other services, there is no base rate fee, but $1.25 is the highest – tied with one other service – per-contract fee of brokers we reviewed. Charging fees this way is better for you if you are trading less than 40 or 50 contracts, but if you trade more than that, optionsXpress becomes one of the priciest online brokers. However, the fee for an exercise or assignment is $8.95, which is lower than a lot of services charge.

  1. The total cost for trading 10 options contracts.
    Less is Better
  2. 5 optionsXpress
    $14.95
  3. $9.95
  4. $11.45
  5. $15.45
  6. Category Average
    $15.02

optionsXpress does not charge a broker-assisted fee, which is consistent with the service's dedication to help you learn how to trade; if you need help, you can receive assistance free of charge. For margin accounts, you must maintain a $2,000 balance, which is typical of online options brokers, and its rates are average, starting at 8.25 percent for balances below $50,000 and dropping to 6.00 percent for balances over one million dollars.

In terms of buying and selling options, optionsXpress has tools for creating simple and complex trade orders. You can use preprogrammed strategies or easily create butterfly, condor, OCO, combo, straddle, strangle, spreads and contingent orders, among others. If you're new to trading options, the intuitive layout of the platform is beneficial, and if you're an experienced options trader, the order-placement tools are exceptionally simple to use.

optionsXpress includes useful research tools to help you make educated trade decisions, including the online education center that covers basic trade principles using tutorials, webinars and workshops. You can view market overviews or filter down to exactly what you want to see. Using your account tools, you can create highly customized screeners, watchlists, alerts and strategy scanners. The site also provides advanced tools, such as its spread book, streaming charts, volatility view and options calculator.

For mobile trades, you can either use the website, which is optimized for mobile devices, or download apps for the iPhone, iPad and Android devices. You have access to your account, real-time quotes, watchlists and trade tickets so you can order and monitor your trades.

This service put great weight on its educational resources. In addition to the already mentioned help, there is standard help and support available via email, telephone during normal business hours and live chat available during the week 24 hours a day, starting Sunday evening and ending Friday evening.

Summary

With its focus on options and education, optionsXpress is a good choice for traders wanting to break into higher-risk investments than just stocks or mutual funds. The options trading system is easy to use, and there are great resources both within the program and on the website to help you along the way. The main downside of this service is that if you choose to trade large numbers of contracts, you end up paying more with this service than you do with most online options trading services.

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