Totally free options trading

[kDiqq]

So I have been watching reviews of the popular free trading app Robinhood and it seems to be doing very well. For those unfamiliar, Robinhood is a basic stock trading broker that only charges a monthly fee for using margin. For outright trading, there are zero fees. They announced yesterday (I think) they are getting ready to launch a totally free options trading service called Jellifin (https://www.jellifin.com/). Anxious to see how this turns out. I use margin frequently, so I don't know if it would ever make sense for me to utilize it, but this seems to be a shake-up in the broker world! Hopefully free market takes hold and everyone benefits.

[akhouston]

There's no free lunch. With options trading, while cost is important, execution is everything.

[SeanM]

On 4/4/2017 at 7:29 AM, akhouston said:

There's no free lunch. With options trading, while cost is important, execution is everything.

Partially disagree. I did a lousy job of record keeping last year, but in 2015, I had pretty decent executions, despite the crowded nature of what we do. I use IB, so trade costs were about as low as one can get. Commissions reduced my annual return by a little over 40%.

 

Returns for that year are the dream of probably any trader or investor, myself included even including commissions and member dues. 

 

I guess my point is that transaction cost is extremely important, and also acknowledge that without execution you obviously miss the trade or possibility over pay, making execution also very important. I don't think execution is everything, though, as that 40% is quite significant. Imagine what kind of impact commissions at a traditional online broker would be.

Edited May 3, 2017 by SeanM