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Discount Brokerage Pricing Review
*Update: As of Sept. 2012 optionsXpress Canada has suspended accepting new Canadian accounts
OptionsXpress is a different animal compared to other discount brokers because it has a much more sophisticated options trading platform relative to its competitors. Because optionsXpress also allows its clients to trade stocks, however, is why we’ve decided to include them in our review.
Even though this discount broker is a subsidiary of Charles Schwab, a massive American discount broker, and it has an American office and sister company by the same name, optionsXpress Canada is catered towards Canadians and is a member of the Canadian Investor Protection Fund (CIPF). Like other Canadian discount brokers, optionsXpress allows for trading of stocks, mutual funds, options, ETFs and bonds. In addition, you are also able to trade futures. The registered accounts available include tax-free savings accounts (TFSAs) and registered retirement savings plans (RRSP) accounts.
OptionsXpress Canada does not require a minimum amount (for cash accounts) to open an account nor do you have to maintain a minimum balance. For margin accounts, a minimum deposit of $2000 is required to open and maintain the account. Their commission pricing for stock trades is based on trading activity, so the more often you trade, the better the rate you get. The best price they offer for trading stocks is $9.95 per trade up to the first 1000 shares, and $0.01 per share for orders of 1001 shares or more. This “best price” is offered to clients who trade more than 9 times in a quarter. For those who trade less frequently than 9 times a quarter, the starting rate for a trade is $14.95 for orders between 1 and 1000 shares after which point the cost switches to $0.015 per share (for trade orders of 1001 shares or more). One very interesting pricing feature is that they have no fee broker assisted trading, a very rare feature amongst any of the Canadian discount brokers.
The Bottom Line
OptionsXpress Canada’s pricing seems to favour infrequent investors/traders who keep the order sizes small. With account minimums only for margin accounts, and no inactivity fees as well as no additional charge (other than the commission for the trade) to having a broker assisted trade, if you need a bit of extra hand holding or just require access to phone rep assistance when making trades, optionsXpress’ model is certainly unique. If you have an understanding your trading habits and requirements, you can certainly figure out if optionsXpress makes sense for you.
|Options Xpress Website LinksHere are some useful links to important information on Option Xpress’s website.||Discount Broker Ratings:Link to ratings by Barron’s:|
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