OptionsXpress — which was purchased by Charles Schwab in 2011 to beef up the broker’s options trading capabilities — is geared for frequent options traders, with significant volume discounts and advanced options trading tools. The company serves that purpose very well, but won’t appeal to casual investors.
NerdWallet's rating: / 5
Quick facts
- Commissions: $8.95 per trade
- Account minimum: $0
- Promotion: 50 commission-free trades
OptionsXpress is best for:
- Options traders
- Frequent traders
- Penny stock traders
- No account minimum
- Futures and forex traders
OptionsXpress at a glance
| Overall |
|
|
| Stock trading costs |  |
$8.95 |
| Options trades |  |
No base; 1 to 9 contracts, $14.95 flat fee; more than 10 contracts, $1.50 per contract. Investors who maintain 35 or more options trades per quarter qualify for active trader status, with reduced rates. |
| Account minimum | |
$0 |
| Account fees (annual, transfer, closing, inactivity) |  |
No annual or inactivity fees; $60 full outgoing account transfer; $50 IRA closing fee |
| Trading platform | |
Two platforms offered with no trade minimums or fees |
| Mobile app | |
Above-average capabilities |
| Mutual funds |  |
$9.95 per trade; no transaction-fee-free mutual funds |
| Commission-free ETFs | |
Customers get access to more than 200 Schwab commission-free ETFs |
| Research and data | |
Free |
| Tradable securities | |
• Stocks • Bonds • Mutual funds • ETFs • Options • Futures • Forex |
| Customer support/branches | |
Phone support Monday-Friday 9 a.m. to 8 p.m. Eastern; live chat and email support; customers can visit more than 300 local Charles Schwab branches |
| Promotion | |
Customers who open a new account and transfer at least $5,000 from another brokerage earn 50 commission-free trades |
Where optionsXpress shines
Investor education: It’s a shame that the OptionsXpress commission structure doesn’t favor beginners (more on this below), because the broker has a wealth of educational offerings. Investors have access to free seminars at local Charles Schwab branches, as well as frequent webinars — everything from a four-part Intro to Options series to a three-part series on IRA strategies — newsletters and on-demand educational videos. Customers can also practice trading with a $25,000 virtual trading account, which offers access to OptionsXpress trading platforms and tools to test strategies without risk.
Account minimum: It’s fairly rare to find a $0 account minimum among brokers.
Broker-assisted trades: It’s even more rare to find a broker that offers broker-assisted trades completely free. Most traders prefer to trade online, but if you’re the type to use a broker for a phone trade, this is certainly a point in favor of OptionsXpress.
Tools: All of the OptionsXpress platforms and tools are free to customers. The company offers both web-based trading tools and a desktop platform, Xtend. Xtend offers much of what you’d expect from an options-centric platform, including customization, real-time quotes and the ability to view options chains. But it’s not a standout.
The real stars of the OptionsXpress trading tools lineup are the company’s unique web-based tools, including Walk Limit, an advanced limit order functionality that automatically updates your order in an attempt to get the best price. This removes the need for investors to continuously monitor and modify limit orders.
Other notable features: The company’s Idea Hub searches the market for trade ideas and allows investors to analyze potential strategies based on specific categories, like volatility, earnings and covered calls. You can search through ideas, view probability and profit and loss charts, and quickly execute a trade when you find a strategy you want to pursue. Trade Patterns, another idea-generation tool, gives insight into market patterns by showing popular trades and the current top option trades. And the Trade and Probability Calculator helps users evaluate strategies by running detailed analysis based on options expiration date, total investment and volatility.
Commission-free ETFs: Customers have access to Schwab’s wide network of these funds, which can be traded for free. As noted in NerdWallet’s Charles Schwab review, that ETF selection is very strong — in fact, NerdWallet picked Schwab as the best online broker for beginners who want to trade these funds.
Where OptionsXpress falls short
Trade commissions: Like its parent company Charles Schwab, OptionsXpress charges $8.95 for stock and ETF trades (though it does offer access to Schwab’s wide network of commission-free ETFs). This is on the high side when compared to many discount brokers, including options-focused competitor OptionsHouse, but it’s cheaper than TD Ameritrade’s $9.99 fee.
High costs for low-volume traders: Unfortunately, the pricing structure means if you’re a casual trader, you’re likely to pay more here. Beginners looking to ease into options trading should probably start elsewhere. The broker’s flat fee trade minimums mean low-volume customers could end up paying up to $14.95 for a single contract. To put that into perspective, a similar trade at OptionsHouse would cost $5.45; even Schwab’s costs would be cheaper at $9.70.
No-transaction-fee mutual funds: Charles Schwab hasn’t extended its extensive no-transaction-fee mutual fund network to OptionsXpress customers, which is unfortunate. However, the fee to trade mutual funds here is a very reasonable $9.95 (plus any load fee, if applicable).
The bottom line
OptionsXpress is an excellent choice for active options and futures traders. The company’s tools are advanced and unique, and commissions are very reasonable for high-volume traders. In addition, the broker offers unmatched educational resources, both within its own website and at parent company Charles Schwab’s branches. That said, OptionsXpress isn’t a good choice for infrequent traders because of its punishing minimums.
Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: aoshea@nerdwallet.com. Twitter: @arioshea.
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