eOption Review – A Discount Brokerage with Competitive Rates

eOption.com is a discount online trading brokerage that provides stock, bonds and options trading services. As the name indicates, this brokerage specializes in options trading and provides many unique trading tools like OptionsPlay to help optimize strategy analysis and execution.

Launched in 2007, as a division of Regal Securities, Inc., eOption has perpetually refined the trading platform to accommodate the full spectrum of options trades from simple directional long call/puts to more sophisticated quad-legged iron condors. eOption is also one of the oldest firms that has been providing auto-trading services for client accounts subscribed to various affiliated newsletters and trade signal providers through their specialized auto trade desk. New U.S. accounts have a $500 minimum while international accounts require $25,000. All new accounts must be funded within 30-days of creation.

eOption Commissions and Fees

The eOption platform has flat commissions for stocks, ETFs, bond and options trades along with various regulatory fees. This is not to be confused with the direct access trading platform.

The eOption flat-rate commission schedule is exclusive of the various exchange and regulatory fees that are tacked on to transactions. 

Stocks and ETFs can be traded commission-free.

Options are $1.99 per-trade plus $0.10-per contract. Broker assisted trades are an extra $6-per trade. Options assignment and exercise is $9.00-per trade.

Bonds are $5-per bond for the first 25 and $3-per each additional bond with a minimum commission of $39. 

Mutual funds are $5-per trade.

Auto-trade commissions are $1-per trade for stocks and 15-per trade plus $0.10-per contract for options.

Minimum equity requirements for margin is $2,000 for all instruments. Naked options require a minimum of $25,000 for puts, $100,000 for calls and $500,000 for indexes.

eOption doesn’t allow short-sales on stocks under $3-per share nor allows margin on those stocks.

Direction Access Trading Fees

eOption offers direct access trading through Sterling Trader Pro ($230-per month) and Das Trader Pros ($150-per month) and browser-based Das Active Webtrader ($30-per month) with mobile access for an additional $40-per month. Active traders will also need to pay for exchange data feeds and ECN routing fees.

eOption Platform Features and Tools

These features apply to the eOption trading platform. DAS Trader and Sterling Pro have their own features.  

Charts

eOption provides various charts from candlesticks, line, bar, area and open-high-low-close (OLHC) in multiple time frames ranging from minutes to monthly periods. alerts/alarms set at key trigger levels. There’s a useful compare function that enables multiple stocks to overlay onto a single chart to compare price action. 

Technical Indicators

Basic momentum, price and volatility technical indicators are available. These range from Bollinger bands, moving averages to stochastic and MACD. Users can also draw trend lines directly on the charts. The indicators can be configured easily with the various tabs. This platform reminds me of Think or Swim in terms of navigation and flow.

OptionsPlay

Options Play is a great analysis tool that enables users to define risk and reward outcomes ahead of time. It enables users to scan, create and implement simple or complex options strategies ranging from directional longs to sophisticated multi-leg spreads and derivatives strategies. It comes complete with strategy analysis tools to visualize potential outcomes before putting on the trade and explains in detail the underlying mechanics of the potential trades. For every options trade, it will also supply a strategy checklist so that users are completely aware of factors like Probability of Worthless, Annualized Return, Earnings Date and Spread Liquidity.

Technical Strength Analysis

I also like how OptionsPlay will rate the technical strength of the underlying stock complete with notable price level indications that include support/resistance levels. Of course, these are price levels a seasoned trader should know ahead of time, but it’s just another value-added feature proves useful more often than not.

Customer Service

The customer support is excellent with direct phone access open Monday through Friday 8 AM EST to 8 PM EST. E-mail support is available as well. I like being able to talk to a live person. Broker-assisted trades are an additional $6-per trade. 

Extended Hours Trading

eOption allows pre and post-market trading for listed and NASDAQ stocks through ECN limit orders. However, it’s crucial to be aware of the limited after-hours trading times. Pre-market hours are from 8:00 AM EST to 9:28 AM EST, while post-market is from 4:00 AM EST to 6:00 PM EST. Be careful not to get stuck holding a trading position you were planning to scalp out of in post-market because you weren’t aware of the 6 PM EST cut-off.

Basic Order Entry

eOption order entry is done through an order entry window with level 1 quotes. There are button tabs to buy or sell, but orders need to be configured before placing. Orders are routed internally through eOption. Direct access routing and level 2 are accessible through the DAS Trader and Sterling Trader Pro platforms.

Complex Multi-Legged Order Entry

eOption really shines here for options traders seeking to put on multi-legged strategies from simple spreads and straddles to more complex iron condors, butterflies and calendar spreads. Users can pull up the option chains and easily click each leg as the platform constructs the trade for you. This simple intuitive design streamlines the process beautifully.

Mobile App

The eOption mobile app is available for customers through Android and iOS. Users have access to real-time account information, news and trade management functions. However, it doesn’t allow for extended hours stock trading.

Direct Access Trading

For active stock traders seeking direct access routing, eOption provides direct access trading through Sterling Trader Pro and Das Trader platforms. Users will have to sign additional agreements and expect to pay software, ECN pass-thru and data feed fees.

What Type of Trader Is eOption Best For?

eOption is best suited for seasoned and beginner options traders thanks to the ease-of-use and instructive nature of OptionsPlay. The ability to have ideas presented and analyzed for you takes a lot of legwork out of the process and saves time. For those looking to up their options game with income generation multi-leg strategies, this is the ideal platform.

Pros

• Stock and options commissions are highly competitive
• Intuitively designed for streamlined and seamless options strategy management platform
• Good options strategy learning tools with plain English descriptive explanations applied to specific trades
• Reputable auto-trading desk for subscribers of affiliated signal provider services
• Solid customer service support

Cons

• Direct access trading is only available through third-party vendors and expensive
• After hours trading cut-off at 6 PM EST is two-hours earlier than direct access brokers