New brokerage OptionsHouse offers flat trading fee
CHICAGO, Jan 8 (Reuters) - Online brokerage OptionsHouse, Inc., a subsidiary of private options firm PEAK6 Investments, L.P., said on Monday it has launched a platform offering clients a standard flat fee for all options and stock trades.
The commission on each trade will be $9.95, regardless of size, OptionsHouse said.
The new brokerage hopes to differentiate itself in the crowded options trading segment of the securities industry with a platform that allows traders to analyze trades and execute orders in less time with fewer clicks.
But OptionsHouse faces challenges from big competitors such as TD Ameritrade Holding Corp. (AMTD.O) and Charles Schwab Corp. (SCHW.O) , whose services now also include options trading.
Other rivals mining the profitable options landscape include Chicago-based online brokerages optionsXpress Holdings Inc. (OXPS.O) and thinkorswim Group Inc. which was acquired by investor education firm INVESTools Inc. IEDU.O.
The U.S. options marketplace has seen explosive volume, with its busiest year in 2006.
More than two billion option contracts changed hands last year, reflecting broader institutional and retail participation and ongoing deployment of technology, according to Options Clearing Corp., which tracks the industry.
Increasing public familiarity with options, which give the right to buy or sell an underlying asset such as a security at a predetermined price within a specific time period, is another big factor boosting U.S. options volume.
"We are still at the beginning of what will be a very long trend in growth in retail options trading," OptionsHouse co-Chief Executive John Haas told Reuters. "We believe there is room for a broker serving savvy option and stock traders."
