Looking for feedback from clients of the broker OptionsHouse, quality of fills, software, ability to place self directed orders. Any input is appreciated. Thanks in advance.
No idea as they've just started to accept clients. Peak6 is a fairly savvy firm, but what's with the browser-based app?
From what I've seen, they're a pretty reliable firm. I don't use them myself but I know several people that do. However, as the previous poster mentioned, they are brand new. So if you want to wait a while and feel them out before committing funds, I wouldn't blame you.
OptionsHouse was built on top of/along side some fairly sophisticated in-house trading tools at PEAK6. For instance, I believe their risk viewer is pretty much a port of the windows-based risk analysis tool they use internally, albeit somewhat dumbed down. They know how to build tools, however I'm less confident they can run a successful business. E.g., their $10 flat-rate for option trades doesn't cover their direct out-of-pocket for any order of size. They may be losing money on every trade, but they're making it up on volume! I'd give them a try, but don't be surprised if they 'adjust' their rates in the not too distant future.
Thanks for the feedback. Does anyone know whether the flat rate applies to directed orders, i.e., choosing to which exchange I route?
Why would you want to direct your orders? Unless you are a large order flow provider who has an internalization deal with a DPM on a particular exchange, it doesn't make economic sense. Just let your broker route your order to the exchange posting the best price on the NBBO. It will save you money in the long run.
Some brokers will route to the NBBO, optionally asking BOX if they can improve on the price. Other brokers route to a predetermined exchange, even if it isn't the NBBO. I don't know what Optionshouse does, but sometimes it pays to direct route yourself.
Sb, I agree that in most cases smart routing is a good option. There are some others, where I would want to direct: to BOX for price improvement or to CBOE after an indication of the market for a larger size transaction. Also, I have not routed to AMEX or PHLX for years even when they had the NBBO - black holes where orders would sit neither executed or easily cancelled...things may have since improved on those exchanges in the past few years though.
OptionsHouse has been pretty great to me. I opened an account and had it opened with funds within 3 weeks. The software is pretty good, although missing some features (such as Level II quotes, even though some say options traders don't need them) and maybe a software platform, although the web-based is extremely easy to use. Most of my orders were executed on ISE, using the Smart Routing that they use. When you do an exchange lookup on the option, they'll show you the NBBO and generally route your order to the best exchange as shown. I am pretty sure if you need to route it to a specific exchange you can call your broker there and do so (no additional charge for broker-assisted trades).
I suspect they lose money on commissions but they make it up elsewhere. I wouldnt be surprised if their credit interest rate is pitifully low.