Trades on eOption cost as little as $0.10 per contract, and stocks and ETFs for $0. With ridiculously low margin rates to boot, it’s no wonder why eOption reviews are mostly positive.
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eOption - Reviews & Ratings
Account minimum: $500 for US-based clients
Fees: Stocks and ETFs are $0. Options are $0.10 per contract
Best For: Active options traders
Highlights: Super low commissions and margin rates
Investor Warning: Options involve risk and are not suitable for all investors.
eOption is a brokerage firm founded in 2007 that specializes in options trading but has a wide range of investment types to offer its users. The pricing system is geared for active options traders and the company offers its services internationally.
The brokerage is part of Regal Securities, Inc., which is a member of the Securities Investor Protection Corporation, a federally mandated corporation based in the U.S. founded in 1970. Essentially, SPIC guarantees that eOption’s clients will be reimbursed quickly if eOption fails in any way.
Regal Securities, Inc. was founded in 1977 and offers a traditional brokerage along with many other financial services like the eOption online brokerage. Stocks and options trading was the focus of the company since its founding, and multiple smaller firms work under Regal Securities in order to provide lower prices and a better trading experience to their clients.
eOption is an international online broker which means that it accepts clients from a number of countries besides the US. International accounts require a high initial deposit of $25,000 in any combination of USD or US/foreign securities.
The broker accepts unsolicited accounts from these countries: Austria, China, Germany, Netherlands, Ireland, Luxembourg, New Zealand, Mexico, Singapore, South Africa, Australia, Switzerland, and the UK.
Overview and Summary
- An options-focused broker that offers a wide selection of investment types.
- The prices are fantastic for stocks, ETFs, and especially options trades.
- Watch out, margin traders! eOption has some of the lowest margin rates in the industry.
- An attractive offer for investors interested in automated trading.
- Trading platforms are average in most respects, but very user-friendly.
- Research and technical analysis capabilities are very limited.
- Education is a bit lackluster but clients can practice with a paper trading tool.
Options are the main focus of eOption, however, the brokerage offers many other investment types. There are no futures options and forex available, and the selection of stocks you can short is very small. eOption offers the following investment types:
- Mutual funds
- Foreign stocks
What eOption is Great At
Pricing – Their Finest Quality
eOption has low fees in general. The commissions on Stocks and ETFs were lowered to $0 in November 2019 but broker-assisted orders are $6.
Options go for $0.10 per contract and there are no per-leg fees. Foreign stocks commissions are $39. Auto trade commissions for options are $2 + $0.10 per contract.
There is, however, a $1.99 per-trade fee for options, which means that this pricing system is best for users who trade 4 or more contracts in a single trade. Mutual funds have a $5 commission and bonds are $5 for the first 25 bonds, and then go down to $3. There’s a well-made, comprehensive pricing schedule on eOption’s website you might want to check out.
Margin Rates are Super Low
As of late 2019, eOption’s margin rates have dropped even further. Now, their margin rates are some of the lowest you can come across. Accounts with less than $25,000 have a 7.75% base rate, and accounts with more than $250,000 enjoy a tiny margin rate of 4.75%.
The fees are not the greatest. You can find many brokers with lower requirements in today’s competitive brokerage industry. The minimum initial deposit is $500 for US-based clients and $25,000 for international accounts. Also, look out for potential annual fees.
The broker charges a $15 annual fee for IRA accounts. Regular accounts who have fewer than 2 trades per year, or less than $10,000 in credit or debit balances, are charged $50 per year. These fees are not low but the overall low commissions should make up for that, and active traders probably won’t have anything to worry about.
eOption offers auto trading based on professional advice, namely, newsletters. Users can subscribe to one of 50+ available newsletters and then allow eOption to automatically carry out traders recommended by the selected newsletter.
Users can set some trading terms like the maximum amount per trade (in $). Also, clients can terminate the subscription or change the newsletter at any time.
Auto trading has a higher price than regular trading. Equities are $2 and options are $2 + $0.10 per contract.
Users receive alerts from the newsletter regularly but that doesn’t provide enough time to analyze the order before it is finished. Putting your account on complete autopilot might be appealing but manually reviewing the newsletter’s recommendations as they pop up is a bit impractical.
Their education might not be the best but eOption offers users, as well as non-users, a free paper trading feature. With this feature, investors get $100,000 of virtual money to practice with. This provides investors with a realistic trading simulation which can help prepare them for real-life investing with no risk.
The customer support can be reached via email, phone, or live chat on working days from 8:00 a.m. to 8:00 p.m. In all cases, the company’s representatives answer very quickly.
It took less than a minute for the representatives to respond to my live chat message. All in all, eOption’s customer support might not have 24-hour coverage, but they are quick to respond and professional.
Where eOption Can Improve
Unremarkable Trading Platforms
eOption offers users the ETNA trading platform, as well as their own eOption Trader. There is also a mobile platform, and users have access to great auto trading resources.
Clients can also trade using DAS Web, DAS Pro, and Sterling Trader Pro. However, these platforms can incur additional fees.
The main trading platform is browser-based and provides users with all the fundamental analysis, charting, and research capabilities, and is best suited for direct access trading. Users can customize their interface to a great extent and the platform is quite easy to use.
Having a look at your portfolio during trading hours is easy enough, but conducting any sort of analysis is a lot more difficult. Users have to import their portfolio data into Excel or some other external software to analyze it. However, eOption is developing portfolio analysis tools that will most likely be integrated into the platform very soon.
All the fees and other costs of placing a trade are displayed on the trade verification window, which is a fantastic little feature that more platforms should have. Aside from these qualities, the platform is pretty much average and not a threat to the best options brokers in the industry.
The mobile app is a good adaptation of its desktop counterpart. They both look pretty much the same and their watchlists are synched.
Looking at the performance of your current positions and your portfolio is simple and quick. If you have an Amazon device, you can even ask Alexa to cite stock quotes.
With features like market news, charting, account management, and streaming quotes, eOption’s mobile platform provides an above-average experience to traders, especially those who want their mobile platform to be a mirror-image of the software on their desktop device.
eOption’s educational resources are focused on options trading. They are not suitable for beginners but can prove valuable for intermediate traders who are already familiar with options trading to some extent.
The educational content primarily consists of a blog, a Youtube channel, and some links to Options Industry Council. The blog on their website is not lacking in content but is also not very engaging, especially compared to competitors’ blogs.
eOption’s Youtube channel is basically irrelevant as it has 5 videos on it, but you can find a couple of hundred educational videos on OptionsPlay’s Youtube channel. All of these educational resources are free and available to the public.
The more experienced trader might appreciate the scope and depth of market analysis in eOption’s educational content, but some other brokers provide a better service, even in this respect. New investors will find many better alternatives among the best brokers for beginners.
You won’t get anything special in terms of research tools from eOption. Their main research feature is OptionsPlay, which is a package of tools used for screening ETF, stock, or option strategies. However, there are no screeners for bonds and mutual funds.
The Bottom Line
eOption caters to options traders by offering them $0.10 per contract commissions. Stocks and ETFs can be traded without commission fees, and the margin rates are also extremely competitive.
The brokerage offers great automated trading capabilities to users who want to put their portfolio on autopilot, and a paper trading tool for those who want to try the platform out.
The company doesn’t stand out in other respects as their trading platforms and research tools are mediocre. eOption’s education might be a good fit for some more knowledgeable traders, but beginners will probably look elsewhere to start learning about investing.