How is it possible that OptionHouse is providing flat-rate trades? No one else charges less than $0.50/contract as far as I know... But OptionHouse can go $12.95 flat? I'm thinking about moving in/out of 200-contract positions on a regular basis (for hedging), so commissions will add up quickly. Is OptionHouse providing legit fills at those prices? I'm just concerned they're going to make it up on the back-end with poor prices...
Turns out there's a long discussion here: http://www.elitetrader.com/vB/showthread.php?threadid=152275 And it seems mostly positive!
My guess (Page 4 of the above linked thread, last comment) turned out to be accurate. They piggyback off Peak 6's connection and since Peak6 gets good rates due to the massive amounts of business they do with the exchanges, they can make money off the rates they charge. They get paid for orderflow as well, but a suprisingly wide amount of brokers get paid for orderflow and it doesn't actually affect fills as much as some people seem to believe it does. (The last part is from personal experience, not some line of crap fed to me by OH).
Everyone gets paid for order flow. If you're a retail trader you can bet your life that someone is paying for your order to be sent to them. Thats how they do it. Since when you're a retail trader you get the NBBO then it has no effect on your fill.