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"The company delivered a profit report that surpassed even the most optimistic expectations," said Frederic Ruffy, an analyst at California-based Optionetics, an investment education and analysis firm.

The solid performance confirms the options business is growing as more investors embrace the potential advantages of trading puts and calls, he said.

OptionsXpress said fourth-quarter net income rose to an all-time high of $15.6 million, or 25 cents per share, from $8.7 million, or 15 cents a share, a year earlier.

Revenue grew 56 percent to a record $39.9 million.

The quarter’s performance blew past analysts’ mean estimate of 22 cents per share on revenue of $37.2 million, according to Reuters Estimates.

"In 2005, our low customer acquisition costs, strong account generation and efficient, highly scalable platform combined to drive revenue growth at double the rate of expense growth," OptionsXpress Chief Financial Officer David Fisher said in a statement.

OptionsXpress allows investors to trade in stocks, bonds, futures and mutual funds, but its niche is in the fast-growing options business.

It competes with online discount retail brokers such as Ameritrade Holding Corp. (AMTD.O: Quote, Profile, Research) , whose services includes options trading.

Daily average revenue trades in the fourth quarter rose 60 percent to 24,200.

Trades per account on an annualized basis rose from 38 trades in the third quarter to 39 trades in the fourth quarter and average commission per trade increased to $18.25 from $17.94 over the same period.

At the end of 2005, the company said total customer accounts stood at 161,800, up 60 percent from 2004.

The U.S. options business got off to an explosive start in January 2006 with a record average daily volume of 9.2 million contracts, surpassing 5.9 million contracts last year.

More than a record 1.5 billion contracts changed hands last year, up 27 percent from 2004 as more investors used options to protect portfolios, increase investment income and maximize returns on stock, according to the Options Clearing Corp.

Investors greeted the earnings report by sending OptionsXpress shares sharply higher. By midday, shares rose 8.9 percent, or $2.55, to $31.23 after earlier hitting a record high of $31.38 on the Nasdaq since its debut a year ago.

During the conference call, the company said it has expanded its customer base and is now registered to open accounts in Singapore and Canada.

OptionsXpress also said it plans to clear its own trades, a step which would reduce expenses and deliver a better product to its customers.

"Our clearing firm and back office are with Goldman Sachs (GS.N: Quote, Profile, Research) . But that will change later in the year," Chief Executive David Kalt said. "We are early in this initiative."