OptionsHouse and tradeMONSTER, two Chicago-based online trading firms, have recently merged in an attempt to increase their reach by offering a multitude of mobile trading options. Currently, the decision to join forces is part of a bigger picture: to be the go-to market leader in the online brokerage world.
Ultimately, the merger’s goal is to stay competitive with the other heavy hitters in the industry, like E*Trade, Fidelity and Charles Schwab. But how will this merger affect investors?
So what does the OptionsHouse and tradeMONSTER merger mean for you? Investors can expect improved customer service, increased mobile accessibility, and more tools and resources.
Background of OptionsHouse and tradeMONSTER
OptionsHouse, an online trading firm that was started in 2005, “is distinguished as a pioneer of trading technology, having been one of the first firms to apply proprietary tools to more efficiently manage risk in the options market,” as stated on their website.
The firm’s specialties include: the trading of stocks, options and other financial products. OptionsHouse is known for their no-fuss, affordable online trades that have low comission prices. Although their namesake is grounded in options, the firm offers much more, including retirement accounts, stocks, ETF’s, and mutual funds.
tradeMONSTER started a few years after OptionsHouse in 2008. On their website they describe themselves as “an innovative online brokerage that helps self−directed investors manage their money with the skill and confidence of professionals.” The firm’s focus is integrating strategy into investing, to create strong, diversified portfolios. tradeMONSTER has several different options to choose from including stocks, bonds, options, futures, mutual funds and ETF’s.
What Does the Merger Mean for Investors?
The decision to merge firms appears to be a beneficial move for both parties, with the goal of improving user experience.
“The online brokerage industry is highly fragmented. This transaction represents a tremendous opportunity to bring together two best-of-breed, online brokerages and create an organization that, as a market leading player, will challenge the status quo in the online brokerage industry,” said Dirk Mueller-Ingrand, CEO of tradeMONSTER. “Our goal is to continually improve our customers’ trading experience as one of the most dynamic and innovative companies in the industry.” — OptionsHouse press release source
The merger is meeting the market’s demand for more sophisticated and easy-to-use technology, as well as the demand for mobile trading services. As the companies merge, investors can be hopeful about upgrades in technology, customer service, and more.
Both companies headquarters will remain in Chicago. The combining of forces, along with the experienced staff of each company, are expected to benefit customers.
Will This Affect Your Accounts?
Currently, both companies say it’s business as usual and don’t anticipate any changes to your account. As the companies transition, their customer service avows to share any and all upcoming changes far in advance.
One thing that will remain the same with the merger is using Apex to clear transactions. While the front-end software will be new for investors, the actual technology behind clearing transactions will remain intact. This should make the transition fairly smooth in regards to merging customer accounts.
One concern with mergers is usually around price. Currently, the price for both OptionsHouse and tradeMONSTER stock trades are fairly similar, with only a marginal difference. Stock trades are $4.75 and $4.95 respectively. Moving forward, investors can expect those prices to even out. One area where the companies differ? Their pricing for options base, minimum deposit amounts and mutual funds.
The current rates will stay intact for all current customers. In addition, all promotions, like free trades, will continue to be honored. The merger is likely to strengthen both companies.
“By joining forces, we’ll bring together the best of both companies. As a result, we believe we’ll be uniquely positioned to provide active traders with a competitive edge in the market. We’ll develop innovative tools and provide fast, reliable execution, seamlessly delivered across desktop and mobile devices. And our focus on providing superior value at competitive prices will remain a hallmark of the new company.” — Source
The merger is slated for the third quarter of 2014, pending regulatory approval. Until that time, each company will continue to do business separately and prepare for the upcoming merger.