Firstrade

OptionsXpress vs Interactive Brokers


Compare Interactive Brokers vs OptionsXpress - who is the better broker in 2020? Cost, IRA accounts, online trading platforms, mutual fund offerings.


OptionsXpress is Gone


OptionsXpress has been assimilated into Schwab. See Top 25 Brokers article instead.


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Interactive Brokers: Open account and get $200 for a friend you refer.

Webull: Get one free stock when you deposit $100+ into Webull account.




Account Pricing, Commissions, and Fees




OptionsXpress


Interactive Brokers

  • Stocks and ETFs: $4.95
  • Options: $4.95 + $0.65 per contract
  • Mutual funds: $9.95
  • Bonds: $5 per bond, $9.95 minimum
  • Futures: $3.50 per contract
  • Options on Futures: $3.50 per contract
  • Forex: No commissions. OptionXpress receives compensation through the bid/ask spread.
  • Spreads, Straddles & Combos: 2-10 contracts - $12.95 flat (active traders) $14.95 flat (non-active traders); 10 + contracts - $1.25 per contract (active traders); $1.50 per contract (non-active traders)
  • Investments: stocks, options, mutual funds, bonds, futures, options on futures, covered calls, forex, ETFs
  • OptionXpress minimum deposit to open account: $0 for cash account, $2,000 for margin account

  • Stocks and ETFs: $0.005 per share with $1 minimum, 0.5% of trade value maximum for SMART routed orders
  • Options: $0.70 per contract if premium => $0.10; $0.50 per contract if $0.05 =< premium < $0.10; $0.25 per contract if premium < $0.05 + exchange fees. Minimum $1 per order.
  • Mutual funds: $14.95 (minimum size on initial fund order is $3,000, subsequent minimum order size is $100)
  • Corporate and municipal bonds: 0.1%* face value (10 bps) if <= $10,000 face value; 0.025%* face value (2.5 bps) if > $10,000 face value
  • Treasuries (bills, notes, bonds): 0.02%* face value (2 bps) if <= $1,000,000 face value; 0.002%* face value (0.2 bps) if > $1,000,000 face value; $5 minimum
  • Metals: 0.15 basis point * trade value; minimum $2; storage cost 0.10% per annum
  • US-future and future options: $0.85 per contract
  • Forex: 0.20 basis point * trade value if <= $1,000,000,000; minimum $2
  • Investment products: stocks, options, mutual funds, ETFs, bonds, futures, currency transactions, US SSFs, EFPs, metals
  • Interactive Brokers\IB minimum deposit to open account: $0 for cash account, $2,000 for margin account




Companies Pros



OptionsXpress


Interactive Brokers

  • Very cheap mutual fund commissions at $9.95 per transaction
  • Great customer service
  • Many well-designed trading tools and cutting-edge trading technology
  • Free streaming quotes
  • No fee IRA accounts
  • Free virtual trading
  • No money down to open new brokerage account
  • Free DRIP: dividend reinvestment plan (contact customer service to set up)
  • Access to financial advice and additional brokerage services through Charles Schwab

  • Low pay-per-share commissions on stock trades with up to 1,000 shares and on options trades of up to 20 contracts
  • Professional trading platform
  • Lowest margin rates in the industry
  • Access to 100 markets worldwide
  • Rich selection of products for trading




Companies Cons



OptionsXpress


Interactive Brokers

  • High margin rates
  • NTF mutual funds are not offered

  • $10 per month minimum commission requirement to avoid $10 monthly fee (rises to $20 monthly if account balance is less than $2,000; waived for $100,000+ accounts)
  • $10 monthly for market data feed (waived if trade commissions are more than $10 per month)
  • $7.50 quarterly fee for IRA accounts ($30 per year)
  • $10,000 minimum to open most accounts
  • Complicated fee structure
  • Trader Workstation is designed for professional traders; it is not intuitive and difficult to learn
  • Expensive to make trades with over 1,600 shares
  • Lots of customer complains about snobby customer service (and yes, we experienced it ourselves)
  • Merciless margin tightening and fast margin calls - IB apparently doesn't care if their customers get completely wiped out
  • Minimum size on initial mutual fund order is $3,000 (subsequent minimum order size is $100). Only no-load funds and short term redemption fee funds are offered
  • Technical problems with trading platforms and website
  • Long login process




Interactive Brokers vs OptionsXpress: Comparison Summary



OptionsXpress by Charles Schwab charges higher commissions on stocks and ETFs than Interactive Brokers/IB on orders of up to 900 shares. Both companies don't have surcharges on penny stocks and extended hours trading.

OptionsXpress provides excellent customer service, and new clients can open an account in minutes with no money down and no obligation. Compare that to $10,000 minimum, and tons of paper-work plus many days of waiting for approval and activation required at Interactive Brokers.

IB has a notoriously rude customer service, and the company discourages beginner investors to apply for an account. The firm doesn't seem to care if its customers loose all their money: positions are liquidated automatically as soon as account gets into negative territory, and margin requirements are tightened at the worst time for the clients.

Both firms don't have IRA setup fee but IB charges $30 annual IRA fee. Unlike Interactive Brokers, OptionsXpress doesn't have monthly fees, which at Interactive Brokers could be as high as $360 a year (!).

Interactive Brokers' customers are mostly very active and experienced traders - and for this type of clients we recommend this firm. Because of fewer fees and better customer service, OptionsXpress would work much better for everyone else, especially beginners investors, buy-an-hold investors, and retirement account holders. We also suggest for our readers to research high rated firms in our Best Brokerage Firms article for more ideas for a brokerage account.