eOption Review

Category: Reviews | Author: Trading Brokers | Date: October 7, 2023

As you navigate the vast landscape of online brokerage services, the name ‘eOption’ might have piqued your curiosity. In this in-depth review, we invite you to step into the world of eOption, a brokerage that dares to stand apart in a crowded marketplace. This evaluation goes beyond the surface, delving into the unique attributes, strengths, and potential drawbacks of eOption, all in an effort to provide you with a balanced and insightful perspective. Whether you’re an experienced trader seeking fresh opportunities or a beginner ready to embark on your investment journey, this exploration of eOption aims to guide you in making an informed choice tailored to your financial goals.

Pros & Cons

  • Robust trading platform with powerful tools, such as eOption Mobile, OptionsPlay, and Autotrading
  • Several funding options to deposit and withdraw funds
  • Low commissions and fees for U.S. equities, equity options, and ETFs
  • Different types of accounts to suit different types of traders
  • Free access to strategy tools and research on options trading
  • No trading of other types of securities or international markets
  • No investment advice or recommendations
  • Limited market access to U.S. equities, equity options, and ETFs only

Summary

eOption Review

eOption Review

eOption is a stock brokerage firm that offers online trading services for U.S. equities, equity options, and ETFs. eOption is a member of FINRA and SIPC. eOption provides a robust trading platform with powerful tools, such as eOption Mobile, OptionsPlay, and Autotrading. eOption also provides some resources on its website that can help traders learn about options trading, such as Options Strategy, FAQ, and Blog.

eOption offers different types of accounts to suit the needs and preferences of different traders, such as Individual Brokerage Accounts, Joint Accounts, Corporate Accounts, Trusts, Custodial, and International. eOption does not have a minimum to open an account if you are a U.S. resident, but it requires a minimum of $25,000 equity for an international account. eOption offers several funding options for its customers to deposit and withdraw funds from their accounts, such as wire transfer, ACH, and check.

eOption’s markets are limited to U.S. equities, equity options, and ETFs that are listed on the major U.S. exchanges. eOption does not offer trading of other types of securities or international markets. eOption’s market hours are from 9:30 a.m. to 4:00 p.m. ET on regular trading days, and from 4:00 p.m. to 8:00 p.m. ET on extended trading hours.

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Regulations

eOption, a prominent player in the realm of stock brokerage, offers a diverse array of online trading services encompassing U.S. equities, equity options, and ETFs. One distinctive aspect of eOption’s regulatory landscape is its exemption from oversight by the Securities and Exchange Commission (SEC). Instead, it aligns itself with the Financial Industry Regulatory Authority (FINRA), a key authority in the U.S. financial industry, primarily responsible for monitoring the activities of broker-dealers.

Moreover, eOption takes a proactive step in safeguarding its customers by being an active member of the Securities Investor Protection Corporation (SIPC). This membership extends a protective umbrella over eOption clients, with coverage reaching up to $500,000, reassuring investors of their financial security, albeit with a defined limitation of $250,000 for claims pertaining to cash balances.

Beyond these structural aspects, eOption adheres meticulously to industry standards and regulatory frameworks. It diligently follows FINRA’s stringent margin requirements, ensuring responsible trading practices. The brokerage also places paramount importance on order handling rules, guaranteeing that client transactions are executed with precision and fairness. In alignment with its commitment to transparency, eOption openly shares its order routing practices and execution quality statistics on its official website, empowering investors with the information they need to make informed decisions.

While eOption presents a unique proposition within the brokerage landscape, it’s worth noting that it operates within a specific regulatory context. Depending on individual preferences and risk tolerance, investors may choose to explore alternatives within the realm of regulated brokers. For those seeking different avenues, please see a list of regulated brokers for some alternative options.

Platforms and Tools

eOption offers a robust trading platform for online trading of U.S. equities, equity options, and ETFs. eOption’s trading platform is innovative and trader-friendly, with features such as real-time market scanning technology, income reports, credit spread ideas, market signals, and more. The platform allows traders to create alerts, track their portfolios, and paper trade using the platform.

eOption Trading Platform

eOption Trading Platform

eOption also provides free access to strategy tools that can help traders to trade U.S. equities, equity options, and ETFs with ease and efficiency. Some of the tools that eOption offers are:

  • eOption Mobile: This is a mobile app that provides account access, trading, and order status of stocks, ETFs, and options, including advanced charting and multiple order types. eOption Mobile is available for iOS and Android devices, and it allows traders to trade anytime and anywhere.
  • Direct Access Trading: eOption’s Direct Access Trading tool provides clients with direct access to the market, allowing them to place orders directly on the exchange and see real-time quotes and executions.
  • Advanced Screener: eOption offers an advanced stock screener tool that allows clients to search for stocks based on 60 different criteria. The stock screener is offered for free and can help clients find trade ideas that match their trading strategies.
  • OptionsPlay: This is a trading tool that provides a range of features to help traders explore, analyze, and execute options trading strategies. OptionsPlay is integrated into eOption’s trading platform, allowing traders to access the tool directly from the platform. OptionsPlay helps traders find the best options strategies based on their market outlook, risk tolerance, and target price. OptionsPlay also provides trade recommendations, risk/reward analysis, and probability charts.
  • Autotrading: This is a service that automatically enters trade alerts in your eOption account that you receive from third-party newsletters. Autotrading allows you to follow the trades of professional traders without having to monitor the market constantly. You can choose from a variety of newsletters that cover different strategies and markets.

Education

eOption does not offer a dedicated educational program for its clientele; however, it does furnish valuable learning resources accessible through its official website. Among the educational materials made available by eOption are:

  • Options Strategy: This is a section on eOption’s website that provides information on options strategies. This section includes articles on topics such as “The Basics of Options Trading” and “How to Trade Options”. These articles can help traders understand the fundamentals of options trading, such as the types of options, the factors that affect their prices, and the risks and rewards involved. These articles can be found under the “Education” tab on eOption’s website.
  • Webinars & Videos: eOption provides a variety of webinars and videos on topics such as options trading, market reports, and investing. Clients can sign up for upcoming webinars or watch previously recorded webinars and videos.
  • Research Reports: eOption offers research reports on stocks, ETFs, options, and futures. Clients can access these reports to stay informed about market trends and make informed investment decisions.
  • FAQ: This is a page on eOption’s website that provides answers to frequently asked questions about eOption’s brokerage accounts. This page can be a helpful resource for traders who are new to eOption and want to learn more about the platform, such as how to open an account, how to fund an account, how to place an order, and how to use the tools and features. This page can be found under the “FAQ” tab on eOption’s website.
  • Blog: This is a section on eOption’s website that includes articles on options trading and investing. These articles cover a range of topics, from basic options trading strategies to more advanced concepts, such as volatility, hedging, and income generation. The blog also provides market updates, news, and analysis that can help traders to stay informed and make better trading decisions. The blog can be found under the “Blog” tab on eOption’s website.

Markets

eOption offers trading services for a variety of markets, including stocks, options, ETFs, mutual funds, and fixed income. However, eOption does not offer trading services for commodities, futures, futures options, forex, cryptocurrencies, or fractional shares of stocks/ETFs.

Here is a more detailed breakdown of the markets offered by eOption:

  • Stocks: eOption allows clients to trade stocks from major exchanges such as the NYSE, NASDAQ, and AMEX. Clients can trade stocks long and short, though with a smaller easy-to-borrow list for short sales.
  • Options: eOption offers low-cost options trading, with options trades costing just 10 cents per contract. Clients can trade equity options, index options, and ETF options.
  • ETFs: eOption allows clients to trade ETFs from major exchanges such as the NYSE, NASDAQ, and AMEX.
  • Mutual Funds: eOption allows clients to trade mutual funds.
  • Fixed Income: eOption allows clients to trade fixed-income securities such as bonds.

Accounts

eOption, a distinguished stock brokerage firm, extends a variety of account options tailored to accommodate the diverse needs and preferences of traders. These account offerings are thoughtfully designed to cater to both individual and corporate clients seeking to trade U.S. equities, equity options, and ETFs. The array of account types provided by eOption includes:

  • Individual Brokerage Account: This standard account is designed for individual traders, enabling them to engage in the trading of U.S. equities, equity options, and ETFs. It provides the flexibility to trade with cash or margin, as well as the utilization of diverse options strategies like covered calls, spreads, straddles, and strangles.
  • Joint Account: Ideal for multiple individuals wishing to trade collaboratively, this account can be established as either a joint tenant with rights of survivorship (JTWROS) or tenants in common (TIC) account. The JTWROS option ensures the seamless transfer of ownership to surviving account holders in the event of one’s passing, while the TIC account structure permits distinct interests in the account, which can be passed on to heirs.
  • Corporate Account: Tailored to meet the needs of corporations and partnerships, this account category facilitates the trading of U.S. equities, equity options, and ETFs. It entails additional documentation, including articles of incorporation, partnership agreements, corporate resolutions, and tax identification numbers.
  • Trusts Account: This account is for trusts that are established for various purposes, such as estate planning, asset protection, or charitable giving. A trust account allows the trustee to trade U.S. equities, equity options, and ETFs on behalf of the trust beneficiaries. A trust account requires additional documentation, such as a copy of the trust agreement, a certification of trust existence and authority, and a tax identification number for the trust.
  • Custodial Account: This account is for minors who are under the legal age to trade on their own. A custodial account allows the parent or guardian to open an account for the minor and trade U.S. equities, equity options, and ETFs on their behalf. The parent or guardian has full control over the account until the minor reaches the age of majority, which varies by state. A custodial account requires additional documentation, such as a copy of the minor’s birth certificate or passport, and a tax identification number for the minor.
  • International Account: This account is for non-U.S. residents who want to trade U.S. equities, equity options, and ETFs. An international account allows the account holder to access the U.S. markets and trade in U.S. dollars. An international account requires a minimum of $25,000 equity in any combination of U.S. dollars and U.S./foreign exchange-traded securities. An international account also requires additional documentation, such as a copy of the account holder’s passport or national identity card, a proof of address, and a tax identification number for the account holder.

Funding

To facilitate its customers’ financial operations, eOption offers a range of funding alternatives, which include wire transfers, ACH (Automated Clearing House) transactions, and traditional checks. These diverse funding options empower clients to seamlessly manage their accounts and engage in trading activities with convenience and flexibility. Let us take a closer look at how these channels can be used for funding operations with eOption:

  • Wire Transfer: This is a fast and secure way to transfer funds between your bank account and your eOption account. You can use wire transfer to deposit or withdraw funds from your eOption account. To deposit funds by wire transfer, you need to fill out a wire transfer form on eOption’s website and provide the information to your bank. To withdraw funds by wire transfer, you need to fill out a wire transfer form on eOption’s website and provide the information to eOption. Wire transfers usually take one to two business days to process, but they may incur fees from eOption or your bank. eOption charges $25 for domestic wire transfers and $50 for international wire transfers.
  • ACH: This is an electronic transfer of funds between your bank account and your eOption account. You can use ACH to deposit or withdraw funds from your eOption account. To use ACH, you need to link your bank account to your eOption account and verify it. ACH transfers usually take two to three business days to process, but they are free of charge. However, there are some limitations on ACH transfers. You cannot withdraw funds that were deposited by ACH within 30 days of the deposit date. You also cannot withdraw more than $25,000 per day or $100,000 per month by ACH.
  • Check: This is a traditional way to transfer funds between your eOption account and your address. You can use check to deposit or withdraw funds from your eOption account. To deposit funds by check, you need to mail a personal check, cashier’s check, or money order to eOption’s address. To withdraw funds by check, you need to request a check from eOption’s website and have it mailed to your address. Check transfers usually take five to seven business days to process, but they are free of charge.

Conclusion

In conclusion, our comprehensive review of eOption reveals a brokerage firm with a distinct focus on providing online trading services for U.S. equities, equity options, and ETFs. While eOption excels in its specialization, offering various account types and funding options to suit the needs of different traders, it’s essential to note its limitations, including the absence of offerings in other asset classes and international markets. As with any brokerage, eOption’s suitability depends on individual preferences and trading objectives. Ultimately, eOption’s commitment to transparency and investor empowerment is evident through its educational resources and informative materials. Prospective clients should carefully consider their trading requirements and goals to determine if eOption aligns with their unique financial journey. However, it’s worth noting that while eOption offers strong features, there are other brokers with longer track records that might be worth considering as alternative options. For those seeking additional choices, we encourage you to explore our trading brokers reviews. This exploration will empower you to make a well-informed decision that aligns seamlessly with your unique financial objectives and aspirations.

eOption Logo

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eOption is an online broker that specializes in options trading, offering low commissions and fees for active traders. It also provides access to stocks, ETFs, mutual funds, bonds, and automated trading services. eOption is suitable for experienced options traders who value cost efficiency and fast execution.

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.


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