Online broker eOption courts active traders who prioritize low costs over fancy tools, trading platforms and research. If that’s your game, you’ll probably be more than satisfied with the company’s rock-bottom stock and options trading commissions. EOption also has very reasonable margin rates — so reasonable, they landed it a spot on our list of best online brokers for day trading even though the broker ranks just 3.5 stars overall.
NerdWallet's rating: / 5
quick facts
- Commissions: $3 per trade
- Account minimum: $500
eOption is best for:
- Low margin rates
- Advanced traders
- Low commissions
- Automated trading
eOption at a glance
| Overall |
|
|
| Stock trading costs |  |
$3 |
| Options trades | |
$3 + $0.15 per contract |
| Account minimum |  |
$500 |
| Account fees (annual, transfer, closing, inactivity) |  |
• $15 annual fee for IRAs • $60 full transfer out fee • $50 inactivity fee on accounts that haven’t traded at least twice in the past 12 months or have less than $10,000 in credit or debit balances |
| Trading platform | |
Basic capabilities |
| Mobile app | |
Above average |
| Mutual funds |  |
No transaction-fee-free mutual funds; $15 per trade |
| Commission-free ETFs | |
No commission-free ETFs |
| Research and data |  |
Limited |
| Tradable securities | |
• Stocks • Bonds • Mutual funds • ETFs • Options |
| Customer support/branches | |
Phone support Monday-Friday 8 a.m.-8 p.m. Eastern; email support |
Where eOption shines
Commissions: It’s tough to beat $3 stock trading commissions, especially if you’re not an active trader who can benefit from volume discounts offered by other brokers. EOption’s costs for options trading are equally attractive, with just a $0.15 contract fee in addition to the $3 base. Also of note here are the broker-assisted trade costs: an additional $6 in most cases, which is very reasonable compared to the typical fee, which runs upward of $20. However, fund investors should note that the company doesn’t offer any no-transaction-fee mutual funds or commission-free ETFs.
Automated trading: Part of eOption’s target audience is investors who use automatic trading based on newsletter suggestions. How this works: Account holders subscribe to a participating newsletter, then authorize eOption to automatically execute recommended trades from that newsletter. Customers can choose the maximum amount per trade — in dollar amount, number of contracts, or percentage of account value — and change their auto-trading subscription at anytime.
Is this a good strategy? That’s debatable. But if you frequently follow the directives of investing newsletters that participate in eOption’s service, putting things on autopilot might be appealing. It should be noted that this service costs a still-reasonable $5 per trade.
Margin rates: Margin traders, take note: EOption has some of the lowest margin rates available, with a base rate of 5.25% for account balances of $49,999 and under. That rate drops to as low as 2.75% for balances of $1 million and above.
Where eOption falls short
Trading platform: There’s nothing notable about eOption’s trading platform, which is Web-based and offers standard features, including the ability to place multi-leg options trades, perform technical analysis and trade directly from options charts. The company’s mobile app is a bit better — though still not a standout — with real-time quotes, charting, news and the ability to execute multiple order types.
EOption also offers investors with a minimum balance of $25,000 direct-access trading via Sterling Trader Pro, DAS|Web and DAS|Pro platforms. These platforms carry additional fees, however. Sterling Trader Pro is $230 per month; DAS is $30 per month for the Active Webtrader version, $40 per month for the mobile app and $130 per month for the platform. Data fees also apply and range from $1 to $30 per month.
Fees: Aside from the above platform and data fees — which can quickly eat into returns for customers who choose those tools — eOption also charges investors a series of other fees that aren’t common among its competitors. IRAs are charged a $15 annual fee, and the broker charges a $50 inactivity fee to accounts that go 12 months without at least two executed trades or have less than $10,000 in credit or debit balances.
Research: The offerings are thin here, as are educational resources, aside from a lackluster blog and a bit of guidance on options trading, provided primarily via links to the Options Industry Council. Again, eOption is positioned for advanced investors who may not miss this information, but other brokers provide much more support. On the other hand, we did find the customer service helpful and quick in answering our questions.
The bottom line
EOption delivers low costs to advanced, active traders who can avoid its extra fees and who don’t mind the lack of an advanced trading platform. Investors who trade on margin will also benefit from the broker’s very competitive margin rates. However, those who are willing to pay a bit more in commissions will probably favor a broker that offers advanced features, tools and research, such as OptionsHouse.
Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: aoshea@nerdwallet.com. Twitter: @arioshea.
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