I am considering opening an account with one of these two firms to trade options exclusively. Anyone with experience with both that can tell me which one is likely to give the best executions for simple and complex option trades? Thanks for the help...
I have an account at ToS, and am very happy with them. Their software is great and they are constantly improving it. They have a great feature that will search for verticals, diagonals, butterflies, and the works. The thing I'm most happy about is their order execution. ON more than one occasion they have filled my orders at a price BETTER than my limit order. If you try to 'shave' the price on a spread it seems they really try to get it filled for you on the floor. I can't give a comparative review because I have never used OptionXpress. Cheer, Kevin
================= jetfuel; Am not trying to make you decision more complex than necessary; but agree with Interactive Brokers -have more than one [1 ]account High volume underlying helps also.
First of all I do not know TOS but pls do not open acct with OX, their commission is $14.95 per 1-10 contract. That's 0.1495/share if you trade 1 contract. So when u open a position u r losing $0.29/share for 100 share that's $29.00 per contract before u know u have a profitable position. Unless you r trading 10 contract everytime only then it will justify to use OX (but read bellow...). Use InteractiveBrokers.com or MBTrading.com (I do not have an acct with them) or any brokerage firm that offer $0.01/share for stock & options with no minimum contract. You should be able to buy 1 option contract for $1.00 commission NET. Say u want to open 1 covered call position and then closed it couple months later. OX is (59.80 - 4)/4 = 1395% more expensive than IB. See below for the calculation. Open 1 Covered Call Position Buy 100 shares XYZ Sell 1 XYZ Jan 06 30 Call Close 1 Covered Call Position Sell 100 shares XYZ Buy 1 XYZ Jan 06 30 Call Use OX ====== Open Commission = 14.95 * 2 = 29.90 Close Commission = 14.95 * 2 = 29.90 Total = 59.80 Use IB ====== Open Commission = 2 Close Commission = 2 Total = 4 (59.80 - 4)/4 = 1395% Let's see if you open 10 covered call position Use OX ====== Open Commission = 14.95 * 2 = 29.90 Close Commission = 14.95 * 2 = 29.90 Total = 59.80 Use IB ====== Open Commission = 20 Close Commission = 20 Total = 40 Still OX is (59.8-40)/40 = 49.5% more expensive than IB. So EVEN you trade MINIMUM 10 contract EVERYTIME it still make sense to use IB than OX. Couple things u'll need to know before hand about IB is 1. $10 monthly charge if ur commission is less than $30 2. They do charge cancelation fee - $1.xx. But u can use [Day] or [GTD] order to let it exp. by itself so it inflict no charges 3. Their customer service is, how should I put it mmmm....different. On top of all these, don't forget the spread of option trade for ITM usually around 0.20 if u want to close a losing position u will probably loss another extra 0.10 to 0.20. All these add up to a sizable amount through time with the commission we paid, to be fair the spread lost is almost certain no matter which brokerage firm u use. But u can minimize that by holding it till the option exp. --- The End ---
Fair enough- Let's throw IB and MB Trading into the mix. Let's also get more specific. Commissions are fairly easy to compare. What about option fill prices during particularly fast moving markets. Out of OX, TOS, IB & MB can anyone compare them on option execution during volatile times? Any insights would be most appreciated...
I use OX and am very happy. Their commissions are a little high if you trade less than 10 contracts, but they have an active trader discount requiring only 35 trades per quarter. This discount lowers the cost to $1.25 per contract with a $12.95 minimum. OX gives me good fills especially on spread orders. Rarely do I pay the full B/A width if I am willing to wait a little while. Several times I got a better fill than my limit order. I once bought a Butterfly for 4 cents even though I submitted a very chintzy bid of 5 cents. They have lot's of good tools and their phone support is very good. OX has a very low margin requirement for credit spread orders basically the difference between the strikes. Very helpful. They also have very liberal options trading capability in IRA accounts. I heard good things about IB and TOS, but have no direct experience. However, I have heard that IB charges for order changes or cancellations, but that it is fairly reasonable. I have used Schwab, Fidelity, and Ameritrade and I can say OE is way ahead of them.
I agree. OptionsXpress trading platform is up almost 24 hours a day; 7 days a week. I traded with them for over two years, and could not recall when I was unable to access my account. Interactive Brokers is a completely different story. However, the margin requirements for selling options, especially index options of Interactive Brokers are much lower than those of OptionsXpress(please check their web site for details). OptionsXpress charges option exercise/assignment as an ordinary stock trade, whereas I ***THINK*** Interactive Brokers charges nothing for that. Cancellations of QQQQ option trade via Interactive Brokers during regular trading hours are almost instantaneously. For OptionsXpress, it sometimes took several minutes. Whenever an option trade was in the status of "Pending Cancel" for more than five minutes, I would contact the customer support of OptionsXpress. Unfortunately, I have done that more than 10 times. Over 75% of my QQQQ option trades were routed by OptionsXpress to PSE by default, and then got executed there. When I chose the "SMART" feature, Interactive Brokers usually routed my QQQQ option trades to ISE. I have never traded with Thinkorswim. Hence, no comment regarding this online broker. IMHO: There is NO perfect Online Broker. If there is one, all the others will be out of the business within a short period of time. We just have to COMPROMISE.
As a Professional option trader I don't use any of these brokers. But if I had the choice of a broker who defaults to P-coast or the ISE. I would choose the ISE. Best executions, Price improvement, fast cancels, tight markets. I don't trust the P-Coast and I trade on the Amex.