10-second breakdown:
OptionsXpress is perfect for the stock trader who is ready, but maybe a little nervous to try their hand in the options market. With research tools that are advanced and easy-to-understand and educational materials that will get you up to speed, it’s a playground for the newbie options trader.
The good:
Given the name, you’d expect the options trading tools to be top-of-the-line and they don’t disappoint. Incredible features are at your disposal; like Walk Limit order type, option-scanning, and an algorithm to help you figure out the best possible way to play long and short.
If you are the skittish type, there is a $25,000 virtual money account that will allow you to try every single feature and trade type in real-time without risking any of your own money. Once you’re ready, there isn’t an account minimum which affords you even more ability to play it slow.
There are a number of quality educational resources to make you the next self-taught day trader (if that’s your thing). The level of quality and intel in their resources is really well done.
The bad:
Options fees are a noticeably higher than several other choices in the online trading market.
OptionsXpress doesn’t have many of the financial vessels you’d expect from the more notable brokers (bank accounts, credit cards, loans).
How it works:
Moving from trading the occasional stock or even managing a full portfolio of equities, mutual funds and ETF’s to the intense and exciting world of options can be daunting. The rules are entirely different and you are putting your money at a greater risk than it would be in the stock game. But as the old adage teaches, the greater the risk, the greater the reward tends to be. This thought is very evident in the options world.
OptionsXpress has created a platform that is dedicated to providing the tools to limit that risk, the design to make trading easy, and the educational tools to teach would be options players the ropes. The company itself was acquired by Charles Schwab in 2011 and will eventually be fully integrated into their platform. The timeframe of this happening isn’t clear and OptionsXpress still functions as it’s own platform.
Signing up is the standard process for any financial institution and you’ll need the typical data. There is no minimum balance (another beginner-friendly aspect), but this may change if fully integrated in Schwab’s system (they require $1,000 minimum opening balance). The fees for this broker are higher than other options-focused products (like OptionsHouse). So, if you are already comfortable with the environment and want the best rates; there may be a better solution.
OptionsXpress is easy-to-use above anything else. The platform is solid and makes everything very clear. The all-in-one trade ticket takes making trades to a whole new level and everything is labeled based on your experience level. As you become a better trader, you will become comfortable using the full suite of tools.
Perhaps the most notable and useful tool is the “Walk Limit”. It’s designed to get you the most favorable price in any of your trades, a feature that could save you some big money depending on how many contracts you buy.
There is only one trading platform (most brokers have two or more) called “Xtend”. It’s really not much to write home about, but you want to use the version on the OptionsXpress website itself. There is a desktop version, but it tends to lag and be a bit buggy. The tools on the website run pretty smooth, but they still won’t amaze you.
It’s not all bad, though. A couple of useful features do exist. To access them all from the website, you click the link to go to the list of tools (called “Toolbox”). All the gizmos inside are sortable based on the types of tools available or your skill level. This will help you narrow down what you actually know how to use.
The charting works well (there are 45 indicators that can be measured), and there is a virtual trading account available. You can use 25k worth of fake dollars to test those tools to get yourself trading at a pro level without risking your hard-earned money. There is also a probability calculator, volatility tool, and one of the most unique items called “Idea Hub”.
Essentially, it helps you come up with trading ideas and strategies. More specifically, in the words of OptionsXpress themselves:
“Customers can scan for Bullish/Bearish/Neutral ideas focusing on Volatility, Earnings, and Income generation.”
Other platforms offer tools that perform similar functions, but this one is made to help everyone from newbie to seasoned vet come out with a potentially winning strategy.
Mobile-minded investors should pay attention here. There are apps for iPhone, Android, and iPad, and the mobile website performs well if you have a solid connection. The functionality is the same as the site and the apps are well-designed to provide a decent experience.
If you want to give options trading a shot, it’s a very solid choice. Flagship brokers have options trading available, but lack some of the bells and whistles. Options-focused brokers are often too advanced for the beginner. OptionsXpress is the cup of porridge that is just right for a mix of the two. It’ll cost you more than most, but the educational tools (as well as the ease-of-use) are considerable.
For complete rankings of all online trading platforms, go here.
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