Is optionsXpress The Right Online Broker For You?
optionsXpress is a Chicago, IL based online options, stock and futures brokerage service founded in 2000 and named Best Online Broker by Barrons for four straight years. It has branch offices located in The Netherlands, Australia and Singapore. optionsXpress are specialists in options, be it equity or index options although it also offers customers the ability to trade in stocks, futures, ETFs and bonds.
One Account For Stocks, Options, Futures and Bonds
Not only does optionsXpress allow their customers to trade stocks, equity and index options, ETFs, futures and bonds, most importantly, it enables the customer to do all this through just one account. This means that you can use emini futures like ES, NQ and YM and equity or futures options for hedging or pure speculative purposes like day trading, while at the same time maintaining a stock, bonds and ETF portfolio in the same account. This is highly useful as it does away with the need to maintain multiple accounts as is the case with many other brokers who separate stock, options and futures accounts.
Minimum Amount To Open an Account
Although OX does not have an account minimum for online investing, the account must have enough buying power to pay for a trade before it is placed. A $2000 minimum is however required to maintain a margin account. It is recommended that an account have at least $30,000 cash in order to comfortably daytrade stocks and emini futures. optionsXpress accounts are also protected by the Securities Investor Protection Corporation (SIPC), which protects against losses caused by the financial failure of the broker-dealer, but not against losses resulting from depreciation in a security's value. OptionsXpress accounts are protected by SIPC up to $500,000 - including up to $100,000 for cash claims.
Trading Platform, Charting and Streaming Quotes
optionsXpress' trading platform and order interface, Xtend2, provides, other than the normal real time charting features and market depth; direct access to ECNs, market makers and exchanges, one click access for strategy trading, watch list trading and ladder trading. A trader can also establish communities with other like-minded traders to share investing thoughts and tips. There is also an option to use 3rd party frontend charting software like Quotetracker with optionsXpress' unlimited tick-by-tick streaming real-time quotes for equities, options and futures. This is a great feature for ES traders who make use of tick data to construct 233 tick charts. optionsXpress customers have free access to this data feed (including free level 2 quotes) although Quotetracker requires a minimal monthly fee (about US$14), unless you also maintain an account with Quotetracker's new owners, TD Ameritrade.
The trading platform can also execute the various type of stop orders such as trailing orders, market orders, limit orders etc. Although the most efficient method of order entry is through the online order interface, OX provides free broker assisted trading by telephone or online chat by their fully licensed staff of brokers.
The Free optionsXpress Tool Center has an impressive list of trading tools to help novice, intermediate and even advanced traders build their trades from the ground up. Tools include the Dragon, which scans the market for stocks and options that match your chosen criteria, Xspreads, which shops for potential spread trading opportunities in one convenient location and the ability to virtually trade the markets before going live.
A normal stock trading computer will suffice to use the OX Xtend2 platform and the various tools in the Tool Center tor scan the markets. Go to the Stock Trading Computer Hardware Guide for more information on hardware requirements.
Free Test Drive of Investing Tools
optionsXpress offers to their customers a full range of FREE curriculum-based tutorials and on-demand webinars. They also have a mentoring and tutoring program for investors who are seeking a one-on-one training session. If you are thinking of trying out their services and resources, the Risk Free Test Drive at optionsXpress allows you to access their suite of investing tools and educational resources for ten days.
Pricing and Commissions
Although some of optionsXpress commissions are higher than other brokers (see their website for latest Pricing & Commissions), they do offer price improvements on limit orders, which may end up saving you money instead. For example, in May 2008, over 15% of optionsXpress contracts received price improvements. The slightly higher commissions are not an issue with swing or position traders although more active and high volume traders may contact them directly to negotiate for better rates. Their fills are normally excellent which more than often compensates for the higher commissions.
Customer Service and Contact Numbers
The optionsXpress support staff are quite good as they are knowledgeable and very responsive to trader's problems and queries. They can be contacted at:
US/Canada (888) 280-0277
Europe (+31) 20-521-9307
Australia 1300 781 132
Singapore (+65) 6536-3922
In conclusion, if you are an options trader requiring the occasional access to stocks or futures as part of your overall trading, hedging or investment strategy, optionsXpress is ideal for you. Active stock and futures traders may find the standard commissions slightly high and should attempt to negotiate for a better deal before exploring other direct access discount brokerage options from their competitors such as Interactive Brokers or MB Trading.