OptionsXpress 3Q Profit Jumps 55 Percent

OptionsXpress earned $25.3 million, or 40 cents per share, in the third quarter, compared with profit of $16.3 million, or 26 cents per share, in the third quarter of 2006. Analysts expected a profit of 38 cents per share, according to a Thomson Financial survey.

Revenue, which the company books mostly by collecting commissions for brokering options trades, surged 46 percent to $64.1 million from $43.8 million. Analysts expected revenue of $62 million.

The turmoil in financial markets this summer fueled demand for options, OptionsXpress said.

Options give the holder to the right to buy or sell a stock at a given price within a certain timeframe. People buy options when they want to protect their stocks from losing value, or want to bet that stocks will rise.

When prices swing more wildly, as they did this summer, options become more attractive.

"Heightened volatility in the market contributed to customer activity reaching its highest level in more than a year," Chief Financial Officer Adam DeWitt said in a statement.

OptionsXpress brokered 36,900 trades a day during the third quarter, a 53 percent increase. The heightened trading volume offset a 9 percent decline in the average commission charged on trades.

The company has added 51,400 accounts and expanded the money clients keep at the brokerage by nearly a third to $5.62 billion in the past year.

Shares of OptionsXpress Holdings climbed 57 cents, or 2.1 percent, to $27.40 in morning trading.