Charles Schwab to buy OptionsXpress for $1B

Charles Schwab Corp. Ticker:(SCHW) agreed to buy Chicago-based OptionsXpress Holdings Inc. for $1 billion in stock, adding the 10-year-old retail options broker to its equity and mutual fund offerings.

Charles Schwab Corp. Ticker:(SCHW) agreed to buy Chicago-based OptionsXpress Holdings Inc. for $1 billion in stock, adding the 10-year-old retail options broker to its equity and mutual fund offerings.

The largest independent brokerage by client asset will exchange 1.02 shares for each share of optionsXpress, according to a statement today. Based on Schwab’s closing price on March 18, the transaction values optionsXpress stock at $17.91 apiece, or about $1 billion.

Schwab is expanding in one of the securities industry’s fastest-growing businesses. Options trading in the U.S. has increased every year since 2002, rising 7.9 percent to 3.9 billion contracts in 2010, according to the Options Clearing Corp. in Chicago.

As of Feb. 28, 2011, optionsXpress had 385,200 client accounts, $8.1 billion in assets and a 12-month average of 44,800 daily average revenue trades, according to the statement. Schwab’s client assets totaled $1.6 trillion.

Shares of Schwab have gained 55 percent since the Standard & Poor’s 500 Index reached a 12-year low in March 2009, trailing the 161 percent rally in the S&P 500 Financials Index. The stock fell the most in almost six months on Feb. 3 after the company said 2011 expenses would rise faster than some analysts estimated.

Shares of San Francisco-based Schwab lost 0.4 percent to $17.49 at 8:45 a.m. New York time. In 2011, they have advanced 2.6 percent before today.

–Bloomberg News–