Thinkorswim vs OptionsXpress Overview
Good trading tools can be found at optionsXpress and on TD Ameritrade's advanced platform thinkorswim. Neither broker charges any fees to use its sophisticated software. Let's take a close look at what exactly each broker offers, and see how the two firms compare to each other.
Commissions and Fees
TD Ameritrade customers pay $6.95 for every stock and ETF transaction. Derivative traders pay an additional 75¢ for option contracts.
The broker charges a somewhat steep $19.99 for option exercises and assignments. However, these rates are negotiable for active traders;
one of the traders we worked with trades at $5.95 per equity trade.
At optionsXpress, ETF and stock transactions are $9. Option trades under 11 contracts are a flat $14.95, while larger trades are
$1.50 per contract. Active traders receive a $2 discount on the flat rate and a 25¢ reduction on the latter rate. Exercises and
assignments are at the standard $9 commission.
There are several helpful tools on the optionsXpress website. Walk Limit, for example, automatically updates limit orders on options to try to achieve a better fill. Idea Hub helps users explore different option trading ideas. It is able to search through various strategies based on criteria such as earnings, volatility, and income. A trade and probability calculator analyses a potential trade based on expiration dates, volatility, and investment amount. The broker also operates Virtual Trade, a paper trading platform. Here, traders can practice buying and selling a variety of securities using the same software found in a regular OX account.
The charting software on the optionsXpress website is very good. First is the basic chart function, which displays a security's price action on a smaller graph. This version cannot be displayed full screen. There is also a streaming chart option. This version can fill the entire screen. Users can zoom in on the chart, use drawing tools, and show tick-by-tick price action. A number of technical studies can be shown on both graphing programs. These include MACD, Linear Regression Trendline, and Moving Average Envelope. Convenient buy and sell buttons appear near the graph for quick order entry. Besides traditional candlesticks and lines, the streaming chart can show price action as scatter, percent, and P/C ratio.
The optionsXpress website has a convenient trade bar at the bottom of the browser. However, it only provides trade data, such as current bid-ask spread and the day's volume. It does not have the ability to display a small chart or place a trade. An all-in-one trade ticket conveniently places trades for stocks, options, ETF's, and futures. It appears as a simple web page. Multi-leg orders can be created. That's about it from this broker. There is no desktop platform.
Thinkorswim is TD Ameritrade's very sophisticated desktop platform. Unlike other desktop systems from other brokers, this one is free for all the firm's clients. There are no active trader requirements or account minimums. After launching the software, the login window has an option to choose live trading or paper money. The practice platform has all the regular features that live trading boasts.
The charting tools are very advanced. There are over 400 technical studies available, far more than what the OX website offers. These indicators include exotics, such as Dark Cloud Cover, Rainbow Average, and Awesome Oscillator. Several drawing tools can be used, including arrows and Fibonacci time extensions. Besides bars and candles, the graph can be shown using equivolume and Heikin Ashi.
A useful tool called Option Hacker scans thousands of possible option trades. Input criteria include open interest, implied volume, and theta. The results can be sorted by many variables, such as maximum covered return and several underlying stock characteristics. Spread Hacker scans many different option spread possibilities and returns several pre-populated ideas. These include diagonals, double diagonals, and butterflies.
Thinkorswim has real-time data on currency pairs, which optionsXpress no longer offers. Forex can be traded on thinkorswim, including on the paper trading system. Like optionsXpress, futures can also be traded on thinkorswim.
TD Ameritrade offers three mobile platforms, including a thinkorswim app. This app has many of the great charting features that the desktop system has. All the technical studies are there, minus the drawing tools. Futures and forex are available for trading. Alerts and account information are also available on the app. Live streaming of CNBC can be accessed by all traders at no cost.
The optionsXpress app has less charting capability compared to the thinkorswim app. It does have an all-in-one trade ticket that allows stocks, ETF's, options, option strategies, and futures to be traded. Several of the research tools from the website are available on the mobile platform, including Idea Hub. Numerous technical indicators can be used on a chart, although there are more on thinkorswim.
OptionsXpress vs Thinkorswim Recap
The thinkorswim (read review) platform is perfect for traders who want a desktop program or
need sophisticated charting tools but don't want to pay for them. optionsXpress (read review)
is ideal for frequent traders who can qualify for the broker's reduced commissions. The beter options research tools are at optionsXpress,
while the better trading software and pricing for frequent traders is at thinkorswim.