Options Trading

Options Trading: The Importance of Execution

There are so many things to keep in mind in options trading that it can be easy to take for granted one of the most crucial aspects - the quick, seamless execution of your actual order at the best price available.  In options trading, fast and simple execution of trades can often mean the difference between profit and loss, which is why it's important that your broker take the execution process very seriously. At optionsXpress, we realize that execution is one of the most vital parts of the options trading experience, which is why we work so hard to make our execution process the best possible.   

The first consideration is trade placement. optionsXpress offers innovative technology that helps simplify order entry for even the most complex options trading. Whether entering an order from our customizable position screens or our innovative Chains, populating the order ticket for options trading is a relatively simple point and click away. We strive to offer you the services to help manage your position, with multiple risk management order types such as trailing stops, contingent orders, One-Triggers-Others (OTOs) and One-Cancels-Others(OCOs).

And because spreads are such a big part of options trading, optionsXpress continues to be a pioneer for the retail spread trader. We understand that spreads offer quantifiable risk/return opportunities for savvy, self-directed investors. We were the first to offer online spread tickets for options trading, the first to offer fully electronic spread routing - which meant faster fills and easier order modification - and we were the first to reflect tighter spread liquidity with our Xspreads® Direct Quote functionality.

The second step is routing. Once the order is placed, we make every effort to find the best price available. We currently route option orders directly to four options exchanges, and are connected to six option brokers. We manage to our customers' expectations, and our brokers are reminded of this daily. Our systems team monitors all these connections, working to keep these options trading connections running smoothly.  We monitor our orders in real time, moving orders to the exchange with the best price available.

The final step is review. We review options trading executions every 15 minutes, confirming the best price available and standing by our NBBO guarantee. We keep a close eye on the market-makers, making sure they are not taking advantage of customers with wide or flickering quotes. And we are always on the lookout for breaking news events or deal stocks, where an absence of competitive quoting can hurt market quality and the execution price.

Quick, smooth and correct execution is a crucial element in options trading. While this brief review has barely scratched the surface of how optionsXpress works to help ensure that your trade is completed effectively and in the shortest amount of time possible, you can rest assured that options trading is how we made our name, and we will continue to focus on doing everything possible to make the trading experience even better for the retail options investor. Visit www.optionsxpress.com to learn more about options trading at optionsXpress.

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