eOption Review: The Ultimate Guide before Starting

Finding the right broker can make or break your investment strategy if you’re an active options trader. eOption is a low-cost, no-frills broker that promises to cater to cost-focused options traders. But is it worth your investment? This eOption broker review will analyze eOption’s offerings, educational resources, drawbacks, and overall suitability.

eOption: Website

Account Minimum: $0

Fees: $0 per stock/ETF trade, $3.99 base per leg, plus $0.10 per contract for options trades

eOption is an online discount broker that specializes in serving cost-focused options traders. Founded in 2007, the broker aims to provide low-cost trading solutions with no account minimums. eOption offers a simple and efficient trading platform that allows traders to execute their trades quickly and easily.

eOption launched in 2007, but its parent company, Regal Securities, has been around since 1977. The broker wants to work with active but infrequent traders of options and stocks, especially those on a tight budget.

However, before you sign up for the huge discounts, remember that eOption has a restricted variety of offerings and needs more tools and resources than long-term investors and beginners may want. eOption has scaled up its instructional effort to serve additional tiers of traders. We’ll look into the eOption broker review to help you decide if it fits your trading needs well.

Customer Service

• Phone line available Monday-Friday, 8 a.m.–8 p.m. (Eastern time). Phones are answered quickly (The company reports an average hold time of ten seconds).
• Desktop-only client chat
• Live broker available from 8 a.m. to 6 p.m. (Eastern time).
• No chatbot
• Residents of Austria, Australia, China, Germany, Ireland, Luxembourg, Mexico, Netherlands, New Zealand, Singapore, South Africa, Switzerland, and the U.K. can open eOption accounts. Foreign accounts must have $25,000 equity in U.S. dollars or exchange-traded securities.

Products

eOption provides limited investment products, including equities, ETFs, options, mutual funds, and fixed income. Commodities, futures, futures options, currencies, virtual currencies, assets in other countries, and fractional stock shares are not included. eOption does not offer a Robo-advisory service. Here’s a quick rundown of what you can trade using eOption:

• Stocks long and short (Though with a smaller easy-to-borrow list for short sales)
• Mutual funds
• Bonds
• Simple and multi-leg options

Pricing

eOption announced zero-cost equity trading. However, it still charges a per-leg fee for options trades. The per-contract charge is deficient ($0.10). Thus, high-volume options traders will likely pay less with eOption than with other brokers. Clearing and exchange fees, typically a fraction of a penny per share, are displayed on the order confirmation screen and passed on to customers.

One of eOption’s biggest draws is its low options contract fee of $0.10, significantly lower than the industry average of $0.65. This makes eOption an attractive option for active traders who want to minimize their trading costs, but customers need to read eOption broker reviews to decide on another factor.

Order Types

You can enter the market, limit, stop, stop limit, trailing stop, trailing stop limit, and OCO/OTO conditional orders on eOption Trader (the browser-based platform). Only market, limit, stop, and stop limit orders are available through the mobile app. Selecting a tax lot is not an option when closing out a position. The default ordering method is “first in, first out.”

Usability

The eOption website is straightforward to navigate, and opening an account is simple. Click the green “OPEN AN ACCOUNT” button at the top of any eOption page. You can begin trading with either a paper or live account (hover over each to learn what you can do with that type of account). If you need assistance, there is a FAQ section, live chat, and phone support.

eOption Trader resembles a downloaded direct-access platform. However, it operates within a web browser. When you log in, you can choose the “Basic” layout for novices or the “Full” style, which includes more buttons and tabs. You can change your design by dragging and dropping widgets, which are easy to get to. This has order entry widgets. Option strategies can be added to a “watchlist,” The platform has an option called “OptionsPlay” for those who trade options often.

The mobile application is less user-friendly and flexible than the web-based platform, but they have a similar appearance and feel. The same asset classes can be traded on web-based and mobile platforms, and the watchlists are synchronized. Both systems offer real-time data and news streaming, but mobile has fewer charting and order entry options.

Trade Experience

You can enter orders in eOption Trader using the “Trade” and “Options Chains” sections. Your trading costs, like exchange fees, are shown on the deal verification screen. This great feature makes it easy to see how much everything costs. There are real-time quotations and news streaming, and a marquee at the top of the screen displays your watchlist tickers or open position information. The platform allows chart trading, trailing stops, and conditional orders such as OCO and OTO orders, which cancel each other out. However, charges cannot be held for subsequent entries.

Along with eOption Trader, the company gives clients access to the Sterling Trader Pro, DAS|WEB, and DAS|Pro Direct Access Trading platforms. These are designed for high-frequency trading, and additional access fees may exist.

Account and Research Amenities

eOption provides many free research tools such as a stock screener, an options screener from OptionsPlay (A good platform perk), and third-party research from Hammerstone Report. The research tools provided may be enough for option traders with much experience but not for investors just starting.

Security and Reliability

The security of eOption conforms to industry standards:

• Two-factor authentication is supported on both mobile and web platforms.
• Biometric (facial or fingerprint) authentication is available for app users.
• Lloyd’s of London offers Securities Investor Protection Corporation (SIPC) insurance with a maximum total loss of $200 million.
• The corporation holds a cybersecurity insurance policy of $3 million.
• eOption did not report any significant or widespread platform disruptions or data breaches.

Transparency

The rates and fees for eOption are easily accessible and mentioned on its website. To examine price details for commissions, margin rates & requirements, ACH/checks/wires, retirement accounts, and other fees, click the “Rates & Fees” button at the top of any page. Your trading costs, including exchange fees, are easily comprehended on the deal verification screen. This is a feature that more brokers should provide.

Available Account Types

eOption provides all standard account types such as:

• Individual and joint Trusts subject to tax
• Custodial
• Corporate
• International
• Individual retirement savings accounts (IRA)
• Traditional IRA
• Rollover IRA
• IRA for simplified employee pensions (SEP)
• The SIMPLE IRA
• Coverdell savings account for education

Education

eOption’s educational offerings are primarily focused on options trading. Options Industry Council (OIC) articles and videos cover many topics such as the basics, a long list of options techniques, and progressive ideas (e.g., volatility and the Greeks). There are a few general trading articles, a blog, and a simple glossary.

The organization is adding more learning opportunities and webinars to its list (hosted by the Options Industry Council). There are no tools for planning life stages or long-term calculations, but eOption offers a free paper trading platform with a little late data.

Pros and Cons

Pros Clarified

• Options trades continue to incur a per-leg commission from eOption. However, the cost per contract is only $0.10. Therefore, if you trade five contracts or more per order, eOption’s fees will be lower than those of practically every other broker.
• The eOption Trader platform is straightforward and user-friendly. The layout can be changed to fit your needs, and the order entry screens are easy to use and make sense.
• You can automatically tell eOption’s “Auto Trading” feature to act on trade alerts from your chosen newsletter. You select the maximum trade size based on a monetary amount, the number of contracts, or a percentage of your account’s worth.

Cons Clarified

• eOption facilitates trading equities, ETFs, mutual funds, fixed income, and options. You cannot trade commodities, futures, futures options, currency, cryptocurrencies, or fractional stock/ETF shares. This limited selection of products and services will be a deal-breaker for some investors and traders.
• No minimum is required to open an account with eOption if you reside in the United States. Otherwise, an overseas account requires a minimum of $25,000 in equity. A new account must be funded within 60 days of opening, or it will be closed.
• Most eOption’s educational products are geared toward experienced options traders. Thus, novice traders may need to go elsewhere for straightforward and primary content.

Is eOption A Worth Broker to Get?

Unlike many of its larger competitors, eOption doesn’t try to serve every type of investor in the world of finance. eOption is made for people who trade options and is an excellent deal for active and comfortable people choosing their trading strategies. Options traders who trade frequently will benefit from scanning strategies and low costs. The pricing ($0.10 per contract + $1.00 for each trade) is difficult to beat if you trade more than four options contracts at once.

While eOption is a solid alternative for active options traders, you must trade forex, futures, commodities, or cryptocurrencies elsewhere. It’s also different from the broker if you’re a long-term passive investor, require handholding, or want a Robo-advisor. This is to say that active options traders should seriously look at eOption, especially if they intend to trade at least five contracts at a time.

Conclusion

eOption Brokerage is a low-cost options trading platform that offers powerful trading tools, expert support, and commission-free trading. With its simple account opening process, low fees, and numerous features and benefits, eOption is an attractive option for those who want to get into options trading.

FAQs

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Source: Investopedia