PROS / There are local branches if you would like to talk to a broker in person or attend a training seminar.
CONS / This service charges more for trading option contracts than any other service we reviewed, which starts adding up the more contracts you trade.
VERDICT / Scottrade has an established name and provides a good service, but some of its fees are pricy compared to other online options trading services we reviewed.
Scottrade has one of the most recognizable and well-established names in investment trading, and the service it provides lives up to its reputation. Its trading platform has many useful features for researching stocks and ordering trades, and there are mobile apps to trade from your smart phones or tablet. One of the biggest drawbacks to this service is its pricing for fees and commissions, which are some of the highest we saw for online options trading services.
When trading option contacts, you are charged a base rate of $7 plus a per-contract fee of $1.25. Most other services charge less than a dollar and as low as fifty cents per contract. The fee for exercising or assigning a fulfilled contract is $7.95, which falls in the average of the other services we reviewed.
The broker-assisted fee, should you require assistance with your trade, is $32, which is more than many services. This service's margin account requirements are average, though, with a required $2,500 minimum balance and interest rates starting at 8 percent for balances below $10,000 and rates as low as 5.25 percent for balances above one million dollars.
Scottrade's options trading platform and market tools are streamlined. We looked at Scottrade's OptionsFirst trading interface and account center, which is designed specifically for options traders. OptionsFirst supports complex options trading strategies, such as spreads, straddles, strangles, collars and butterflies, with up to four legs per spread. Even so, it is not difficult to look up basic market information or to monitor your positions and orders. It even has a tool that monitors your portfolio risk. If you have been using a different broker or options trading system, you shouldn't have difficulty figuring out how to place and monitor orders with Scottrade.
You can download apps for the iPhone, iPad and Android devices, and the website is optimized for mobile use. From your mobile, you can research stocks, trade securities, and keep track of your watchlists and positions. You cannot access real-time quotes for stocks from the mobile apps, though you can from the mobile site.
Scottrade has standard support options, with customer service available by telephone, email and live chat. The online knowledge center has a wealth of useful resources, including video tutorials, financial calculators and suggestions for options strategies. There are hundreds of branches across the country where in-person seminars are held, and there are online events you can attend to learn about investing in options and trading stocks.
Scottrade provides a platform that focuses on the specialized needs of options traders. It offers an efficient online account that focuses on brevity. The low-volume options rates coupled with the low $7 trade rates make a competitive value. However, if you are a large-volume options trader and carry a high loan balance, one of our higher-ranked products can provide you with lower rates and margin interest.