optionsXpress Holdings Shares Popped: What You Need to Know (OXPS, SCHW)

optionsXpress Holdings Shares Popped: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of retail options brokerage optionsXpress Holdings (Nasdaq: OXPS ) climbed 15% on Monday after Charles Schwab (NYSE: SCHW ) said it would buy the company for about $1 billion.

So what: The all-stock deal values optionsXpress at $17.91 per share and represents a 17% premium to its Friday closing price. The booming popularity of options trading in the U.S. makes the move an obvious one for Schwab, especially considering that its option-trading customers are about six times as active and tend to be longer-standing than other clients.

Now what: The acquisition, in which each optionsXpress share will be exchanged for 1.02 shares of Schwab, is expected to close in the third quarter. Schwab sees $80 million in revenue and synergies arising from the deal, as well as a modest profit boost in the first year as a combined company. Of course, with the trend toward nontraditional asset classes likely to continue, the long-term upside that Schwab gains is what's most appealing.

Interested in more info on optionsXpress? Add it to your watchlist.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. optionsXpress and Charles Schwab are Motley Fool Stock Advisor selections. Try any of our Foolish newsletter services free for 30 days.

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