eOption rating

eOption Review (2021)


eOption Overview


Although eOption isn’t the best known brokerage firm in the world, it does have some decent resources that option traders (and stock and ETF traders) may want to be aware of. Here’s the rundown on this often overlooked company:


eOption Cost and Minimum Deposit


InvestmentsCommissions
Stocks and ETFs $0
Options $1.99 + $0.10 per contract
Option Exercise and Assignment $9
Foreign Stocks $39
Extended Hours Trading $0
Mutual funds $5
Listed Bonds first 25 bonds - $5 per bond, each additional bond - $3 per bond, minimum - $39
Auto Trade Equities $2
Auto Trade Options $2 + $0.10 Per Contract

Investments stocks, options, mutual funds, bonds, foreign stocks, ETFs
eOption minimum deposit to open account $0 for US; $5,000 for international accounts


Bulls Focus On...


Good prices on derivative trades of four contracts or more. Small trades are pricey.

Advanced orders are available. Good for multi-leg trades.

Surprising amount of tools for stock and ETF trading. Research is very good.


Bears Focus On...


Many option tools are missing. Strange, but true.

Platform can be buggy. Based on our research using Chrome.

Parts of the broker’s pricing schedule aren’t competitive. Fees for assignments and exercises.


Available Assets


eOption Investments Rating

As you might expect, with an eOption account you can trade option contracts. You can also trade these investment vehicles:

- Equities
- Fixed-income assets
- Funds (all 3 types: closed-end, mutual, and exchange-traded)

eOption’s stock offering does include some foreign stocks. But missing are cryptocurrencies, precious metals, futures, forex, and warrants.


eOption Fees and Commissions


eOption Cost Rating

Placing trades for the products eOption offers does come with trading fees in some cases. Option trades have a $1.99 base charge with a 10¢ per-contract fee. Exercises and assignments cost $9.

Somewhat surprisingly, eOption offers better pricing on stock and ETF trades. They are completely free for any number of shares. But stocks on foreign exchanges have a steep $39 trade fee.

All mutual fund trades (including both purchases and sales) are $5 each.

The worst part of eOption’s fee schedule is a $50 charge for inactivity. It is assessed once per year against accounts that have less than 2 trades in the year. Holding at least $10,000 in assets will also avoid the fee.


Customer Service


eOption Customer Rating

eOption has no branch locations, so you won’t be walking into any type of traditional environment. The company does have an e-mail form on its contact page 24 hours a day, 7 days a week. But there’s no online chat function.

Phone reps are available from 8:00 am to 6:30 pm, EST. The broker is closed on the weekend and on market holidays.


Fund Resources


eOption Funds Rating

Although eOption does offer trading in mutual funds, we did not find any mutual fund profiles or other fund tools. Although ETFs do have profiles, they are rather sparse. Earnings histories and analyst ratings for the most popular ETFs are completely absent. We did find these features:

- Time & sales data
- Basic fund details
- Trade data, such as 52-week change
- SEC filings


eOption review


Software


eOption Platforms Rating

To submit orders for equities, options, and ETFs, eOption offers a browser platform. It is fairly simple, but nevertheless comes with some useful trading tools.

For example, the charting program is available in full-screen mode. During our testing, we found roughly forty technical indicators, six graph styles, and an unlimited number of comparisons. A chart can be saved as a png file, and data can be exported to a spreadsheet file. On the downside, there are no company events, and right-click trading is not possible.


eOption review: charts


The platform’s order ticket has several advanced features. We really like the number of extended-hours options (pre-market only, regular session plus after-hours, and several others), and discrete buttons for sell short and buy to cover are a big plus. Unfortunately, we only found two time-in-force choices.

A watchlist makes an appearance on the platform, and it’s really easy to create and delete multiple lists. A list from an external file can also be uploaded, a unique feature.

There is an alerts widget on the platform. However, we were disappointed in the number of triggers. The tool offers only bid, ask, and last triggers.


eOption review: trading


Mobile App


eOption App Rating

If the browser platform isn’t to your liking, eOption does have a user-friendly mobile app with several nice features. Some of these are the same tools on the computer platform, like alerts and a watchlist that syncs with the browser platform’s.

Charting is a little weaker compared to what the PC platform offers. During our investigation, we found no charting tools of any kind, a major weakness.

The order ticket on the app has several order types, including stop and stop limit. However, there are no trailing orders, which the browser system does have.


eOption review: mobile app


Other Platforms


eOption Software Rating

eOption’s browser platform doesn’t offer several key features that day and swing traders may want. These include direct-access routing and Level 2 quotes. If you need these features, you can upgrade to a third-party platform from Sterling or DAS. But eOption requires at least $25,000 in account equity for access. Plus, these software programs come with fees. Expect to pay $150 per month or more.


Margin Borrowing


eOption Margin Rating

eOption offers margin accounts with rates that range from 4.75% to 7.75%. Naked call and naked put trades are marginable positions at eOption. Stocks priced below $3 cannot be shorted.

For long stock positions above $5, eOption imposes a 50% initial margin requirement and a 30% maintenance requirement. US government debt has margin requirements that range from 2% to 10%.


Options Trading


eOption Options Rating

Finally we come to options trading. Given the name of this broker, you might be expecting a huge home run in this category. On the contrary, during our research we didn’t find many option tools (like a screener, an analyzer, or an income backtester).

eOption customers do get OptionsPlay for free. This is a discrete derivative platform that comes with several nice features. These include a tool to custom build four-legged trades. The software will suggest trades based on bullish or bearish sentiment on a ticker symbol. A profit-loss diagram is shown for these suggestions. Data points include maximum gain and loss points.

If you decide to try option trading on your own, the regular platform offers a very good order ticket that incorporates approximately thirty option spreads. Examples include:

- Long put butterfly
- Bull put spread
- Collar
- Short strangle


Education and Research


eOption Research Rating

Other than OptionsPlay, eOption doesn’t offer any option research tools. Its website does have a large amount of educational materials devoted to options trading (courtesy of the Options Industry Council). And we found three videos on options trading.

Perhaps the biggest paradox with eOption is that it seems better for stock trading. Equity profiles have lots of information on them, from analyst ratings to corporate events to key ratios. For General Electric, we found trade recommendations from 12 analysts. SEC filings can be downloaded in multiple file formats. But there is no stock screener, which is a major disappointment.


Other Services


eOption Trading Rating

Individual Retirement Accounts: eOption customers can open a variety of IRAs: Traditional, Roth, Rollover, SEP, and SIMPLE. But the broker charges an annual fee of $15 and a closeout fee of $50. SIMPLE accounts have even higher fees.

Fractional-share Trading: The broker’s software doesn’t yet offer whole-dollar investing.

Dividend Reinvestment Program: It’s possible to automatically reinvest cash dividends from stocks and ETFs as additional shares.

IPO availability: eOption does not offer IPO participation. It is possible to trade IPOs with limit orders the day they begin trading.

Extended Hours: eOption traders can buy and sell securities an hour and a half before the opening bell rings. The broker’s after-hours period lasts for two hours. What we really like about eOption here are several extended-hours trading choices on its order ticket.

Automatic Mutual Fund Investing: Not available at eOption.


Comparison to Other Option Brokers


Firstrade provides options trading with no base charge, no per-contract fees, and no exercise or assignment fees. Despite this unbeatable commission schedule, the broker offers several good option tools, including OptionsPlay. And Firstrade doesn’t have an inactivity fee, either.

TD Ameritrade offers many option tools not found at eOption or Firstrade. These include a probability calculator, Greek values, and an income backtester. And TD Ameritrade has a powerful desktop platform with no account minimum.


Recommendations


Active Stock and ETF Trading: While we do like eOption’s equity research tools and $0 commissions, Webull does an equally good job with a free desktop platform.

Mutual Fund Investors: According to customer service, eOption offers every publicly-traded mutual fund that’s open to new investors. But the lack of a mutual fund screener, not to mention other fund resources, makes it look very unappealing to us. We would pick Firstrade.

Long-Term Investors and Retirement Savers: eOption does not have good resources for long-term investing. And we don’t like its IRA fees. We recommend Ally Invest.

Beginners: TD Ameritrade has better learning materials with 24/7 customer service.

Small Accounts: With eOption’s account fees, we would go with Tastyworks instead.


eOption Review Verdict


eOption doesn’t live up to its name. Strangely, it doesn’t offer many option tools, and its pricing for trades of less than four contracts isn’t competitive. While larger trades will get better pricing, it’s quite easy to find even better deals elsewhere. Stock and ETF traders will find much to like, but without a free desktop platform, the broker again fails to impress.