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Broker Smackdown: Think or Swim vs. Options House vs. OptionsXpress vs. Trade King

Thomas
2376 days ago
Ok...this is it. THE DEFINITIVE THREAD ON THE BROKER ISSUE.

Once and for all, we will settle the question of:

WHICH BROKER IS THE BEST?!?!?!

Get your arguments ready and let the battle begin...
 
aa3536
2375 days ago
I can't speak about the others, but Think or Swim is really quite good for the retail trader. Good tools, good education, great platform, and negotiable rates. The founders are legit as well. Tom Sosnoff still answers client email and will occasionally speak during their weekly chat seminar.
 
Simon
2373 days ago
OptionsXpress. Definitely.

- They were the first to really embrace the options side of the retail brokerage business.

- They were the first to push the envelope with professional-quality trading technology

- They were the first to recognize the value of education for retail options customers

- The were the first to really compete on commissions for options customers and lower the per-contract fees for customers.


All in all, I'd say that puts them at the top of the heap.
 
Thomas
2366 days ago
I don't know.....

OptionsXpress is an obvious choice. They were one of the first to really dive into this business.

However, a lot of people seem to like Think or Swim on this board. So I'm going to withhold my vote until I learn more about Think or Swim.
 
Jersey Boy
2358 days ago
Does it really matter? At the end of the day, they are all the same. They all offer you some basic education, basic trading tools and relatively cheap commissions. That should be enough for the average trader.

If you want something better, then become a better trader, increase your trading size and get an institutional broker. Then you will get better commissions, better margin, better tools and much more.

Until then, arguing about which retail broker is the best is like arguing which insect is the toughest. At the end of the day, they're just insects...
 
Delta Trader
2352 days ago
I'm going to go out on a limb and say Trade King. I have limited experience with them myself, but I have several colleagues who use them for their retail accounts. This firm has quietly built up an interesting presence in the options market. Good tools. Decent position management stuff and they are building a strong educational arm. Overall, I've been impressed by what I've seen. If I open a retail account, I'll probably go with them.
 
Monkey Boy
2348 days ago
I would second the Trade King nom. I don't see them getting as much love as some of the other names on this board, but they certainly deserve it. They have made a concerted effort to become an options brokerage and have done an admirable job. I'm certainly happy with their service and their commissions. So I'm glad that they are finally getting some respect on this board.
 
Jersey Boy
2338 days ago
Like I said in the other thread, I recently saw a presentation by the founder of Think or Swim. It definitely improved my opinion of the tools available to the retail investor. I actually might open an account just to see what all the fuss is about.
 
Simon
2333 days ago
I was at that same panel. Sosnoff is a character, to say the least. His appearance doesn't exactly inspire faith in the quality of the firm. However, the feedback that I've seen about TOS seems to belie his persona. Their users certainly approve of the firm, so they can't be all bad.
 
Athos
2327 days ago
Sosnoff is something else, but I'm not a fan of his platform. I think retail options traders are better off sticking with OptionsXpress. That firm has really pushed the envelope in terms of what retail options traders should expect from their broker.

If it wasn't for OX, retail options customers would still be phoning their orders into their broker. It's because of them that the rest of these newcomers have a market to steal. I think the answer to this question is obvious.
 
jaredwoodard
2327 days ago
So far, the only argument I've heard in favor of optionsXpress is that they were the "first" to do a bunch of things. But that's in no way an argument for why anyone should use them *now*. It's a pretty absurd, claim, in fact: otherwise (by analogy), we should all be driving only Fords, since their Model T was the first affordable consumer automobile.

If other brokers have superseded them on software, execution, price, education, etc. (which seems to be the case), then it seems silly to stay with them, right?

Price: Optionshouse has the best commission structure available.

Software/Platform: thinkorswim has the best trading platform and software available.

Execution: Comparing average executions and fills is pretty difficult to do, so maybe that's a wash?

Education: Between their online resources and free seminars, it seems tough to beat thinkorswim on education. Tradeking has put together a nice playbook.

Are there any other relevant criteria I'm missing? In any case, it seems to me that thinkorswim has a pretty clear lead. If there's a reason why anyone should look again at optionsXpress, I'd like to hear it.
 
Jester
2323 days ago
Well if you're a pure price shopper, and many retail traders are, then Options House is clearly your choice. They are aggressively marking down their commissions to attract new customers, so you can really get some good deals with them right now.

I also have to give a tip of the hat to Trade King. Most people have never heard of them, probably because they don't have the word "options" in their name. However, they are coming on strong in the options world. As Jared said, they have good education and their pricing structure is competitive. They definitely merit some investigation if you are considering jumping into the options game.
 
Thomas
2310 days ago
That's true. Options House is going after the pure price shopper. But OptionsXpress is still the big daddy on the block. If you want to lure the true options trader, and therefore the most valuable brokerage customer, then you have to offer better tools, service and execution than OptionsXpress. I don't think Options House has done that yet.
 
Simon
2282 days ago
I wouldn't dismiss being the first, Jared. That gets you a lot of cache in the marketplace. It also allows you to build the market as you see fit. It also forces everyone else to follow in your wake. Judging by the middling success of later entrants like Options House, that is a substantial advantage.
 
Jester
2275 days ago
I suppose that's true, Simon. OX did get a lot of push out of being the first "true" options broker out there. Other firms like Schwab have obviously traded options for years, but OX was the first to make it their raison d'etre. Now everyone else is playing catch up to their tech.

But I have to reiterate my original post. Options House still appears to be the price leader. So if price is your main priority, and you don't have much need for advanced tools, then Options House should be your first choice.
 
Simon
2229 days ago
I think it breaks down like this:

OptionsXpress if you want the best tools

Options House if you want cheap commissions

Think or Swim if you want the best education.

Etrade, Trade King, Scott Trade and the rest of the pack if you want a broker that is mediocre in all three...
 
Tic Tac
2220 days ago
Guys, this thread is great. Thanks for all of your fantastic feedback. I'm a complete newcomer to this market and I have been shopping for a broker. Your feedback has really helped me. Thanks a ton!!!!
 
Monkey Boy
2216 days ago
I don't know if I would call Trade King mediocre. They have very good commission rates and customer service. But I agree that their tools are sub-par.
 
joeactuary
2207 days ago
No love for Interactive Brokers? At 70 cents a contract, IB would be the cost leader for orders of 14 contracts or less.
 
Tic Tac
2205 days ago
I don't know much about this stuff, but isn't Interactive Brokers aimed at professional customers? I didn't think they were a retail brokerage firm.
 
wenzi
2205 days ago
I would not say "professional". I would say experienced retail traders and professional.
 
Thomas
2199 days ago
That's true. IB doesn't really cater to the retail crowd. It's more for the high end of the options crowd. The people that understand the value of quality executions over simply low commission rates.
 
fsprea
2195 days ago
What an interesting discussion! I wanted to post a comment and ask your opinion in comparing ToS with IB. I am also a beginner, and just "paper trade" since six months option spreads on ToS (via the CBOE link). I want to start with real money and I opened an acct. on IB due to the very low fees. Now: ToS software is by far better than the IB one (TWS is a complicate and slow java machine: you can make all, but you need ages for knowing how to, and it takes minutes for logging on and opening windows). What anyway is much worrying is that, at least in the simulation, ToS fills order MUCH BETTER than IB, where I often see at the end of the day limit orders expired, the same that where immediately filled by ToS. Now ToS people were very sincere, and told me that they automatically fill simulated orders in the middle of the bid/ask spread. I don't know if IB is less efficient because it applies a more realistic simulation. Do anybody compared in real life the quality of execution of ToS vs IB?
 
Snowpro
2195 days ago
The TOS "PaperMoney" acct fills between the bid/ask and is not always reliable for realistic fills.

I remember using an X-trader simulator for futures. I was King of the World. Then I started trading for real, and I turned into the world's doormat.

I don't have the answer to your main question, ToS vs IB in the quality of execution.

What I will say, is that I sometimes get much better fill pricing (with ToS). That is encouraging.

 
fsprea
2194 days ago
Thanks Snowpro,
I have a quite amazing news. I complained at IB for the difficult filling (which, just in case, goes on), and they told me that: "combo orders are handled on a not held basis meaning that they do not have to post your bid or offer to the tape and they can trade through and around your prices or not fill your order at all in this case". It is reasonable: but do you think that it works always like that? I mean, with all brokers? Maybe the only way to test properly is keeping both brokers and try some real trade...
 
aa3536
2193 days ago
fsprea,
This would be an interesting test. Of course you have to be willing to do this same test around 20 times on various different order types and underlyings. Could be expensive to you, but interesting and educational for the rest of us. Perhaps theoptioninsider could fund such an experiment!

In fact, forget about saving a penny here or there, it would be revolutionary if someone actually did such a test on all the major option brokers and then reported on this. It wouldn't cost too much for any well funded news organization, and if reported could change the focus of brokers to quality of executions rather than all the useless bells and whistles they advertise. Of course, all of 3 retail traders would care about such results!
st

 
Athos
2192 days ago
fsprea:

You are a beginner and you are trading combos? Those are highly dangerous trades that require good execution and timing to execute properly. They aren't exactly the first trades that I would recommend for an options newbie.

On the flip side, I can understand why IB would execute them "not held." Combos are difficult to execute properly and IB may very well not be able to get both sides of the trade at the proper price, so they can't execute it at all. Trading combos is not the same thing as just executing a simple long call position. IB is doing the right thing.
 
fsprea
2191 days ago
Dear Athos,
thanks for the advice. Although I cannot completely get the point: why should a spread be more dangerous than a naked call or put? With the proper strategy you're actually hedging much better than a single arm. Of course I'm not going to short a straddle, but for instance a plain long calendar spread is better than a long put, in terms of risk. At least this is what I simulated in the last six months, with constant small but always increasing "simulated" profits. And now I want to see what happens in the real world! About IB, I'm not saying they are making the "wrong" thing, but just that maybe there is someone else making it better... It could be, isn't it? For sure you can probably agree that, if during the trading day, a position is hitting the limit several times (calculating the difference between the long snd the short arm) and you do not get filled, this means that the system is not very efficient in matching quotations for the two arms... At last, with the rebate that ToS offered me without as soon as I asked for it, I decided to go for them. At least the trading environment is much more user-friendly!
 
wenzi
2191 days ago
I think Althos means 'more dangerous' in terms of execution.

Legging combos can be difficult to get done if you are doing them yourself.

I call the institutional desk, and it is still hard to get it done the way I need it to get done.
 
Athos
2186 days ago
Exactly. You don't want to get hung or miss a leg when trading combos. They require a certain amount of finesse and the experienced hand of a good broker to execute properly.

I can't tell you how many times I've had combo trades executed incorrectly. Even if both sides of the trade are executed, they are often executed at prices that erase most of the edge of the trade. In fact, I rarely even bother with combos anymore simply because I can't find a broker that executes them well.
 
Thomas
2179 days ago
Is anyone out there even using Trade King? They don't seem to be getting much love in this thread?
 
Jersey Boy
2166 days ago
This thread has opened my eyes quite a bit. Like many pros on this board, I used to lump all retail brokerages into the same category. They all offered free, if somewhat gimped, tools and relatively low commission rates and that was about it.

However, judging from the impassioned and informed responses on this thread, there is far more to the retail market than meets the eye.
 
Athos
2156 days ago
Options House certainly seems to be taking their lumps on this board lately. I have to say that surprises me. I thought they were a rising star in the options business.
 
mark
2150 days ago
Options Insider Radio listeners will have a chance to learn more about OptionsXpress very soon. David Fisher, OX's CEO, will be our guest on an upcoming episode.

I'd like to offer forum users a chance to ask their own questions to David. Surf on over to the "Questions For Options Insider Radio" section of this forum. Once you're there, post your questions/comments for David in the designated thread. If the questions are interesting or insightful, they will be used in the final program.

Mark
 
Thomas
2124 days ago
I like it. When will it be out?
 
Thomas
2071 days ago
Great show. Finally got around to catching it.

Back to the point of the thread, have we determined an overall winner of this smackdown?

WHO IS THE BEST RETAIL BROKER OF THEM ALL?
 
Jester
2067 days ago
I think optionsXpress is probably the overall winner. Others have better individual features, but they have the best mix of price, tools, execution and customer service.
 
Archon
2044 days ago
This thread has been around forever but I have yet to weigh in on it. Strange that I haven't gotten around on it until now.

I'd have to say that my experience at Options House has been the best. Granted, I trade larger size than the average retail customer, so I'm probably biased by the flat rate. I also have most of my own tools, so i don't rely on the Options House platform as much.

But I think they are a fine broker. Particularly if you want to trade some size orders.
 
Complete Beginner
2032 days ago
I have to say that after reading this thread, and then listening to the latest episode of Options Insider Radio, I have to say that I'm considering Tradeking. That firm seems to have its act together. The CEO seems knowledgeable and I like the community aspect at that firm.

Hell..their ceo even has a blog that he apparently writes himself. You've gotta love that!
 
incometrader
2018 days ago
Hello everybody! I have been trading options for about 25 years now and I remember the days before online brokers existed! Talk about poor execution and high commissions!

Anyway, I trade with both Tradeking and OptionsXpress. I find that for beginers, Tradeking is probably the most attractive because of their straight forward, simple platform and unintimidating "look and feel".

OptionsXpress has given me very good execution and they have been more inclined to negotiate their commissions. Important for someone who puts on a lot of iron condors and butterflies like myself.

My vote goes to OptionXpress.
 
Thomas
2015 days ago
25 years. Well, you may officially be the grizzled old veteran of the board!

If I may, why do you use two brokers. If you like OptionsXpress,why not just stick with them?

Better yet, if you trade a lot of flies and condors, why not go with Options House for $10 flat fees? That would save you a lot of cash.
 
incometrader
2012 days ago
Hi Thomas,

I heard that the executions at Options House are pretty bad unless you trade size.. Again this is something I heard from someone who was trading with them and decided to go to OptionXpress. I have been with them (optionsXpress) for a couple of years now and I am pretty happy with them. I guess you get used to a platform and it takes a lot to get you to move! The account at Tradeking is an account I opened a while back at the urging of a friend who works there...I don't trade very much with them at all besides the very infrequent long shot individual call or put position, but like I said, I like their platform especially for beginners.

 
Complete Beginner
2010 days ago
Income,

It sounds like you prefer TradeKing's user interface but think OptionsXpress has better executions, commissions, etc. Am I correct on that?

As a relative beginner myself, what is it about trade king that you think makes them so newb friendly? Education? Functionality? Or, like I said, is it just the interface that you find easy to use?
 
incometrader
2010 days ago
Hello CB,

Yes that is correct

Just an observation on the "look and feel" of the Tradeking site.I think they have done a great job with their user interface.

Like I mentioned I prefer OptionsXpress for my bread and butter trading(better execution, relative cost, tools, etc, etc) but I know a lot of traders who swear by TK. I think that for the most part, once one becomes familiar with a particular trading platform it is very difficult to make a switch.



 
MaxPayne
2002 days ago
Nice post...wish I found this a couple months back when I was starting.

Two things to factor into this decision that doesn't appear to be mentioned yet are: Excercise fees and Min. Account Balance.

I'll admit that I don't have much info on either of these two as I've only used OpsXp. But as a new trader with very minimal capital avail (call me stupid for learning to invest w/ options), OpsXp was one of the few brokerages that allowed a zero min balance account; this heavily influenced my decision.

The cost for excercising may also be another factor to look into; never done it myself.
***
I can say, by the sounds of it, the fees sound cheaper w/ TK, ToS, and OptionsHouse. I've been looking around lately to see if I can find a better deal w/ equal quality. As somebody who only trades 3 contracts; $15 one-way (OpsXp) becomes costly overtime. But I won't do away w/ fees if execution, quality and comfort are sacrificed. Research away I go!!!
 
Bearhawk
1987 days ago
I'm a newbie trading options. I am only doing the buy to open and sell to close routine in two different cash accounts. I got my inspiration from buying a Darlene Nelson course. I virtual traded with OX and OH. When it came time to fund I went with OH.

In my office there are three of us trading options. Two are with OXpress and I am at Optionshouse. During all the recent volatility the OX guys can't get logged in (not enough server at OX) while at OH I can login and make my trades. Two of the three of us are newbies (I'm one of them). I hate it when I make a bad trade but at least my commissions don't give me a big kick when I'm down adding insult to injury!

As for execution, OH has been great for me. Once I get within a penny of my price (for either buying or selling) I know it will be gone quickly and it is.

I virtual traded several months before funding. I liked the "feel" of Oxpress better than OH at first but I have come to really like the OH platform. This along with not being able to login during heavy trading moments is why there will be three of us trading at OH very soon. The other two guys haven't been able to login enough that they've had it with Xpress.

Things Xpress has that I liked that OH doesn't have:
charts for each individual option
OCO and OTO orders (OH says they will get these soon)
"ticker" that can be detached from the webpage for each option with option price plus index values (this is great at work as a quick glance is all that's needed to see where the position is).

Things I like about OH over Xpress:
$10 per trade (really helps in a losing trade but I keep more $ on a good trade)
order page shows all data on one page so I don't need to fumble between pages
Modifying an existing order to change the price on an open order
ability to replicate a previous order as quick as you can click your mouse

The modifying order thing has been a detriment for my friends at work and I think that might part of why OH says "fast matters".

 
Tic Tac
1976 days ago
I'm surprised that OX doesn't offer order modification. That would seem to be a standard feature for any trading platform these days.

Aside from OH, do you know of any other brokers that offer that feature BearHawk?
 
Monkey Boy
1970 days ago
I believe Think or Swim also offers that functionality, although don't quote me on that.
 
Snowpro
1970 days ago
I don't like to blast brokers or trader's personal choices. But seriously, I cannot believe this discussion for who's the best broker.

As option brokers, TOS, IB, OX, TK, OH know what they are doing. And if you trade a few options here and there they will all do. If you trade large lot sizes OH is certainly the best commission deal. OX has some pretty nice tools, Dragon, etc. TK, has nice basic tools and risk graphs. But IB, charging for trade cancellations, that is simply BS. To actually trade daily, and monitor positions in real-time. Come on boys... ThinkorSwim's think desktop is really the only "Best".

The speed and flexibility of the platform cannot be matched by any web-based platform, even TOS's own web-based platform.

Quickly customizing views to see Prob of touching/expiring, delta, IV,etc of the entire chain in multiple series at the same time. One click to see pricing of Verticals, Calendars, Fly's, Iron Condor's, etc. And then one click more to see and adjust the risk graphs, quickly do Vol crush tests on each leg. Come on now... And all-the-while the new trader can simple click an enter a put or call.

Personally, I prefer to use 1&2-lots for price discovery, so OH isn't the best for me, if I am only using one broker. Then when I get my price I can quickly reload and spread my subsequent orders through multiple accts at the same time.

Also being able to beta-weight my portfolio to the SPY (or any other index) in multiple categories is invaluable for me to keep track of my portfolio greeks in one acct or all of them. And I know my risk throughout the day.

Bearhawk, you can detach news, charts, alerts, orders, etc from the platform and drag it to different parts of your desktop.

I have been holding back from posting, but I couldn't stand it any longer.

trade well,
sp
 
Jester
1955 days ago
Ha! You are missing out on the fun and apirit of this thread, SP. While it's true, we want to find the best broker in terms of price, execution, etc..


...but we also want the horse race!!! We want to get in and fight for our favorite broker and slam the ones we hate!! That's probably the best part. It's also the reason why this thread has been going strong for well over a year. People just love to dive in and mix it up when it comes to brokers.