Charles Schwab Buys OptionsXpress Brokerage

I got an e-mail this morning that my trading account with OptionsXpress is merging with Charles Schwab. Well, considering Schwab (SCHW) has a market cap over 20 times that of OptionsXpress (OXPS), it’s more like they bought OX for their options/futures trading platform and active-trader clients. The WSJ reports:

OptionsXpress shareholders will get 1.02 shares of Schwab stock in exchange for each OptionsXpress share. That values OptionsXpress at $17.91 a share–a 17% premium based on Friday’s closing prices. OptionsXpress’s stock jumped 17% to $17.90 Monday, while Schwab finished up 0.5% to $17.65.

That 17% premium works out to valuation of $1.0 billion. Looks like I’m going to be Schwab customer for the first time. What about commission rates? OX’s options rates are very competitive.

Schwab doesn’t “have any plans right now to take away the OptionsXpress platform” at this time, Bettinger said. The firm said it would try to implement across the combined company the lower of the merging companies’ commission rates.

OptionsXpress still has their $100 sign-up bonus offer live, so if you want a Chuck Schwab account, this way you’ll get a bonus for joining. Here’s a link to my perhaps-soon-to-be-stale OptionsXpress review.

Comments

  1. I opened an account with Charles Schwab about two weeks ago. Sad to miss the $100.

    However, you’ll love the customer service! Also, they have no commission fees on their ETFs and Mutual Funds [which mimic most of Vanguards Funds] with a lot lower expense ratios than Vanguards.

    Side note: I just landed on your blog. Great stuff! Now I have another great blog to add to my Google Reader. I have similar goals that you do sans the house and more traveling [we're spending $30k on a 10 month travel instead of saving for a downpayment].

    Why did you stop sharing your net worth and investment allocations (last one was almost a year ago?)

    Anyways, thanks for sharing your learnings and tips! I started investing late (I went the PhD route and barely graduating at age 30). Go figure!

    Thanks!

  2. I’ve been with Schwab since I can remember and have ALWAYS loved their customer service. They are available 24/7 and also have several brick and mortar locations to meet with a Schwab specialist as needed.

  3. I’ve been using Schwab for most of my banking needs (checking, investment, i401K, HELOC, & Credit card) for 5 years now and I have only good words to say about them.

    They’re not the cheapest but certainly very low cost.

    Excellent customer service, great website, and they don’t nag me on the phone or via direct mail. Just a feel good banking establishment.

    Welcome to Schwab Jonathan!

  4. OptionsXpress will still be around after this merger. It will be owned by Schwab, but still operate like it does today. TD Ameritrade had purchased ThinkorSwim (which is like OXPS) and has largely left it alone. Also look to Amazon and it’s purchase of Zappos.com.

    They’re buying business, but not folding it into their existing business. Or so the reports read.

  5. I hope Schwab will fix the getting worse by the day optionsxpress’s ablity to handle the administrative part of the job. opx does trading at a 9, admin at a 3. telephone helpers are not trained, they say anything to get you off the phone and many times the answer is incorrect!

  6. Recently had money stolen out of my MF Global account, and learned they might try to justify this via “rehypothecation” – using customer account money as collateral for their own trades. Options Xpress has “rehypothecation” in their contracts which allows them to do the same thing – which means customer money is not completely safe. Anyone know of an options firm with a contract without “rehypothecation” in it”?

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