SteadyOptions is an options trading forum where you can find solutions from top options traders. Join Us!

We’ve all been there… researching options strategies and unable to find the answers we’re looking for. SteadyOptions has your solution.

1,289 posts in this topic

Recommended Posts

3 minutes ago, sakura said:

sorry @SBatch, I misunderstood and replied too fast. Did not mean to be rude, as I now realize it was. Sorry again. 

No problem at all.

Share this post


Link to post
Share on other sites

Bear in mind as I think this was already mentioned earlier in this thread, even though they state the commissions are only the flat fee, you will pay regulatory fees of about 0.09 to 0.11 per contract.  For example, on a 20-lot calendar spread I traded yesterday on an equity, according to the trade confirmation statement I paid 3.86 in these fees on the 40 contracts transaction.  You may or may not already be paying with these extra fees with your broker, and usually need to check the trade confirmation statements to see them as they don't always show up in the trading platform.

Also, they are not margin friendly when it comes to unbalanced flies.  As soon as you break a fly/condor or make the wings unbalanced, the margin relief for the credit spread side goes away (at least the last time I traded one, sometime earlier this year).

And yes, no calendar spreads on cash-settled options.

Just some surprises I've noticed.

Tim

 

  • Upvote 1

Share this post


Link to post
Share on other sites
18 minutes ago, luxmon said:

Bear in mind as I think this was already mentioned earlier in this thread, even though they state the commissions are only the flat fee, you will pay regulatory fees of about 0.09 to 0.11 per contract.  For example, on a 20-lot calendar spread I traded yesterday on an equity, according to the trade confirmation statement I paid 3.86 in these fees on the 40 contracts transaction.  You may or may not already be paying with these extra fees with your broker, and usually need to check the trade confirmation statements to see them as they don't always show up in the trading platform.

Also, they are not margin friendly when it comes to unbalanced flies.  As soon as you break a fly/condor or make the wings unbalanced, the margin relief for the credit spread side goes away (at least the last time I traded one, sometime earlier this year).

And yes, no calendar spreads on cash-settled options.

Just some surprises I've noticed.

Tim

 

Good info.  The ORF is .0465 per contract and the OCC clearing fee is .05, so that makes sense.  Still a massive savings for everyone as most seem to pay between .50 and 1.00 per contract.  I've had the same issue with OX regarding unbalanced flies, however a call to the margin department does result in margin relief.  Have you tried contacting the trade desk regarding this?  Also, what has been your experience with execution?  Thanks.

Share this post


Link to post
Share on other sites
3 hours ago, SBatch said:

Good info.  The ORF is .0465 per contract and the OCC clearing fee is .05, so that makes sense.  Still a massive savings for everyone as most seem to pay between .50 and 1.00 per contract.  I've had the same issue with OX regarding unbalanced flies, however a call to the margin department does result in margin relief.  Have you tried contacting the trade desk regarding this?  Also, what has been your experience with execution?  Thanks.

I just point out those fees as some brokers eat the OCC fee themselves (in fact, Tradier did until a few months ago) so one can do a correct head to head cost comparison.  I have contacted Tradier's trade desk (more often than I care to admit) and that's how I originally discovered the unfriendly margin treatment as the culprit for the large amount of missing buying power.  They claimed the margin requirement was being imposed by their clearing firm, and they offered to restore the missing buying power for the day within their backend system.  However, they claimed I needed to call them every morning thereafter as long as that position was on to have the buying power restored.  Additionally, they did warn me that if my trading exceeded the buying power beyond what the clearing firm required, I would receive a margin call the next morning.  I decided at that point not to do those types of trades there.  As far a execution, I have not noticed any differences with other major brokerage accounts I have, although I did run into some strange incidents recently of having the exact same order stall at TOS but be filled at Tradier.  I didn't follow up on this any further and don't have any hard data to prove Tradier is better.

I hope this helps.

Tim

  • Upvote 2

Share this post


Link to post
Share on other sites
1 minute ago, luxmon said:

I just point out those fees as some brokers eat the OCC fee themselves (in fact, Tradier did until a few months ago) so one can do a correct head to head cost comparison.  I have contacted Tradier's trade desk (more often than I care to admit) and that's how I originally discovered the unfriendly margin treatment as the culprit for the large amount of missing buying power.  They claimed the margin requirement was being imposed by their clearing firm, and they offered to restore the missing buying power for the day within their backend system.  However, they claimed I needed to call them every morning thereafter as long as that position was on to have the buying power restored.  Additionally, they did warn me that if my trading exceeded the buying power beyond what the clearing firm required, I would receive a margin call the next morning.  I decided at that point not to do those types of trades there.  As far a execution, I have not noticed any differences with other major brokerage accounts I have, although I did run into some strange incidents recently of having the exact same order stall at TOS but be filled at Tradier.  I didn't follow up on this any further and don't have any hard data to prove Tradier is better.

I hope this helps.

Tim

Quick question. On Tradier is the treatement of pre-earnings calendar spreads on stocks the same as IB and TOS?

 

Share this post


Link to post
Share on other sites
14 minutes ago, luxmon said:

I just point out those fees as some brokers eat the OCC fee themselves (in fact, Tradier did until a few months ago) so one can do a correct head to head cost comparison.  I have contacted Tradier's trade desk (more often than I care to admit) and that's how I originally discovered the unfriendly margin treatment as the culprit for the large amount of missing buying power.  They claimed the margin requirement was being imposed by their clearing firm, and they offered to restore the missing buying power for the day within their backend system.  However, they claimed I needed to call them every morning thereafter as long as that position was on to have the buying power restored.  Additionally, they did warn me that if my trading exceeded the buying power beyond what the clearing firm required, I would receive a margin call the next morning.  I decided at that point not to do those types of trades there.  As far a execution, I have not noticed any differences with other major brokerage accounts I have, although I did run into some strange incidents recently of having the exact same order stall at TOS but be filled at Tradier.  I didn't follow up on this any further and don't have any hard data to prove Tradier is better.

I hope this helps.

Tim

Thanks for the info.  The issue with TOS doesn't surprise me.  They don't smart route, but rather funnel heavy order load to the exchange where they get the largest incentive. Therefore, they often have inferior execution as their orders only sit at one exchange (similar to eTrade and eOption).

Share this post


Link to post
Share on other sites
49 minutes ago, SBatch said:

They don't smart route, but rather funnel heavy order load to the exchange where they get the largest incentive. Therefore, they often have inferior execution as their orders only sit at one exchange (similar to eTrade and eOption).

 

 

So that's my problem.

 

I decided to stay at eTrade after negotiating really low options fees at eTrade by telling them I would go to Tradier, but I bad fills; if I don't chase, my GTC orders often never get filled.

 

Besides inertia, another factor that concerned me was the safety of my life's savings at a smaller less-established player vis-a-vis eTrade.

 

Is there any reason to think I'd be worse off with my money at Tradier if the unthinkable happens (like sovereign debt bomb explodes and world financial system collapses)?

 

Edited by Noah Katz

Share this post


Link to post
Share on other sites
59 minutes ago, Noah Katz said:

 

 

So that's my problem.

 

I decided to stay at eTrade after negotiating really low options fees at eTrade by telling them I would go to Tradier, but I bad fills; if I don't chase, my GTC orders often never get filled.

 

Besides inertia, another factor that concerned me was the safety of my life's savings at a smaller less-established player vis-a-vis eTrade.

 

Is there any reason to think I'd be worse off with my money at Tradier if the unthinkable happens (like sovereign debt bomb explodes and world financial system collapses)?

 

Regardless of which broker you use, you're still protected by SIPC. This gives you $500,000 total protection for securities and cash combined (with a maximum of $250,000 for the cash portion).

Edited by SBatch

Share this post


Link to post
Share on other sites

 

25 minutes ago, Noah Katz said:

 

Good to know, thanks.

 

Is that total assets, or per account?

Total assets held in the same capacity.  For example, all individual accounts would be aggregated and held to the $500,000.  However, if you also held a joint account that would be considered a separate capacity and would quality for an additional $500,000.

Edited by SBatch

Share this post


Link to post
Share on other sites
5 minutes ago, Noah Katz said:

 

Not sure what capacity means.

 

I have a regular IRA, Roth IRA, and a cash account; are they each protected, or just in aggregate?

Yes, those are all held in separate capacity and would all qualify for the $500,000 each.

Share this post


Link to post
Share on other sites

 

Great, thanks very much, and for your other great postings as well.

 

Looking forward to seeing how your Tradier trading goes.

 

Edited by Noah Katz
  • Upvote 1

Share this post


Link to post
Share on other sites

I just found this platform that is backed by Tradier Brokerage.

It say's something like "try us for 1 month for $10"

I have not been able to get my hands on their analysis and backtesting software but, it looks like it might be interesting.

Also, a way of getting some great analysis tools while using it to trade through Tradier.

I have not looked into it fully yet but.....here it is......

http://www.key2options.com/

Share this post


Link to post
Share on other sites

 

SBatch,

 

I emailed etrade about their options order routing and got this reply:

 

"...Quarterly 606 Report"... will show you exactly where we route specific orders in order to give you the best available execution at the time of order entry. You may also utilize the following link to read more about order routing:

https://content.etrade.com/etrade/powerpage/pdf/OrderRouting11AC6.pdf"

Specifically, the report mentions on page 5 that "E*TRADE routes orders in exchange-listed options to broker-dealer intermediaries, which in turn use smart order routing technology to seek the best execution available in the market."

 

So they say they smart-route, or does it all depend on who the broker-dealer intermediaries are?

 

Edited by Noah Katz

Share this post


Link to post
Share on other sites
5 hours ago, SBatch said:

This is how you get a special deal by going through SO from what I understand.

All of the benefits will be in the form of commissions, which is a big deal.

But, from what I can see, if you enter through these people.....http://www.key2options.com/

then you might be able to have access to some pretty serious research tools, and the commissions might still be similar.

But , if you mention SO, maybe you can work a deal where you get the best of both worlds (commissions + research tools)

Share this post


Link to post
Share on other sites
21 minutes ago, Noah Katz said:

 

SBatch,

 

I emailed etrade about their options order routing and got this reply:

 

"...Quarterly 606 Report"... will show you exactly where we route specific orders in order to give you the best available execution at the time of order entry. You may also utilize the following link to read more about order routing:

https://content.etrade.com/etrade/powerpage/pdf/OrderRouting11AC6.pdf"


Specifically, the report mentions on page 5 that "E*TRADE routes orders in exchange-listed options to broker-dealer intermediaries, which in turn use smart order routing technology to seek the best execution available in the market."

 

So they say they smart-route, or does it all depend on who the broker-dealer intermediaries are?

 

Looks like they changed their policy, no doubt in reaction to this:

https://www.law360.com/articles/652831/e-trade-gets-finra-wells-notice-over-order-routing-tactics

http://www.finra.org/newsroom/2016/finra-fines-etrade-900k-best-execution-and-protection-customer-order-information

Based on these changes, yes their intermediaries would smart route.

Share this post


Link to post
Share on other sites
18 minutes ago, cuegis said:

This is how you get a special deal by going through SO from what I understand.

All of the benefits will be in the form of commissions, which is a big deal.

But, from what I can see, if you enter through these people.....http://www.key2options.com/

then you might be able to have access to some pretty serious research tools, and the commissions might still be similar.

But , if you mention SO, maybe you can work a deal where you get the best of both worlds (commissions + research tools)

Yes, I was providing the link to a member that had asked for it.

Share this post


Link to post
Share on other sites
17 minutes ago, SBatch said:

 

Very interesting, thanks!

Share this post


Link to post
Share on other sites

Those of you that use OptionsHouse, what is your experience? I see some negative reviews in this thread, but they're 5 years old and OH has changed a lot since then.

What is your take on OH becoming part of Etrade?

For what it's worth, I've been using OH for 6 months and I prefer their interface over ToS, which in my opinion is just all over the place. I especially love their tradeLAB feature:

oAQnF7f.png

Example tradeLAB screen for the recent RUT broken wing condor.

As far a commissions, I get 0.50 per leg + $4.50 per ticket.

I get a fairly quick fill most of the time, at least not slower than ToS.

Share this post


Link to post
Share on other sites
6 minutes ago, xsgex said:

Those of you that use OptionsHouse, what is your experience? I see some negative reviews in this thread, but they're 5 years old and OH has changed a lot since then.

What is your take on OH becoming part of Etrade?

For what it's worth, I've been using OH for 6 months and I prefer their interface over ToS, which in my opinion is just all over the place. I especially love their tradeLAB feature:

oAQnF7f.png

Example tradeLAB screen for the recent RUT broken wing condor.

As far a commissions, I get 0.50 per leg + $4.50 per ticket.

I get a fairly quick fill most of the time, at least not slower than ToS.

I think OptionsHouse has the best platform of all the brokers.  It is actually the TradeMonster software as OptionsHouse purchased TradeMonster a few years ago before being acquired by eTrade.  I don't think the eTrade aquisition will hurt as the objective was to gain an existing player in the option trading market (similar to Schwab with OptionsXpress).

Share this post


Link to post
Share on other sites

optionhouse doesnt permit time spreads on the indices...i still have an ira with them but use LiveVolx (with IB) for trading

Share this post


Link to post
Share on other sites

I have been trading options with OptionsXpress for quite a long time now. I find their platform quite good but I'm not so sure how their commissions compare with those being mentioned in this thread. It seems there are much better commission rates available from other brokers. Would appreciate feedback from those of you who are with OX or were with OX and decided to leave them for another broker. 

Share this post


Link to post
Share on other sites

suddenly ONE wont pull price data from IB for me and Im having trouble pulling quotes on any futures.  Can you screenshot your current subscriptions @Kim?

Share this post


Link to post
Share on other sites

might be an option net explorer issue...some symbols I get an error message telling me to update my subscription on IB...others it will pull full price data

Share this post


Link to post
Share on other sites
1 hour ago, RapperT said:

suddenly ONE wont pull price data from IB for me and Im having trouble pulling quotes on any futures.  Can you screenshot your current subscriptions @Kim?

@RapperT    I am a new trial subscriber to ONE and I use IB. Are you able to get any IB data feed after the 4pm close? The little green dot on the lower right of the main screen is grayed out and the option chains doe not fill in. Is this your experience? I understand that ONE provides "historical" data but not for the current day after circa 4pm. Is this your understanding?  Also do you know how to limit the data lines pulled from IB ?  I get a pop-up notice saying I have exceeded the 100 line limit but I just ignore it and data keeps coming in.

Share this post


Link to post
Share on other sites
30 minutes ago, 4tach said:

@RapperT    I am a new trial subscriber to ONE and I use IB. Are you able to get any IB data feed after the 4pm close? The little green dot on the lower right of the main screen is grayed out and the option chains doe not fill in. Is this your experience? I understand that ONE provides "historical" data but not for the current day after circa 4pm. Is this your understanding?  Also do you know how to limit the data lines pulled from IB ?  I get a pop-up notice saying I have exceeded the 100 line limit but I just ignore it and data keeps coming in.

Close some of indices that are not necessary will take care of line limits 

futures are only thing live after 4pm

  • Upvote 1

Share this post


Link to post
Share on other sites

i wont get any data at all with certain underlyings...just get an error message

 

but yes, typically just OED data after 4pm.  I havent checked but i believe its from current day

Edited by RapperT

Share this post


Link to post
Share on other sites
4 minutes ago, Noah Katz said:

@SBatch,

 

Have you tried Tradier yet, and if so what do you think?

Not yet, waiting until July 1st for tracking purposes.

Share this post


Link to post
Share on other sites

I have just opened accounts with Tradier and they have asked me to email them the Steady option agreements so that they can adjust my commissions. What agreements are they are they asking for ?

Share this post


Link to post
Share on other sites

Probably your PayPal subscription. Did you use the link from our website to open the account?

Share this post


Link to post
Share on other sites

I began trading in my Tradier account today.  So far so good - filled both my SVXY trade and the RUT Steady Condors trade at better than the mid.  Their user interface/trade ticket is very basic but also extremely easy to use.  It's really just a matter of building a custom order for each trade which is simplistic.  I will continue to use OptionsXpress for my research and analysis and just use the Tradier online platform to place the trades.  In the future I will probably begin using the Option Dynamics platform by Dynamic Trend.  It has some incredible features that I have not seen elsewhere and I did verify that it works seamlessly with Tradier so once launched there is no need to access the Tradier website.

Share this post


Link to post
Share on other sites
3 minutes ago, Kim said:

Thanks for sharing.

What SVXY trade did you do?

I put it in the SVXY thread when I executed it:

 

Share this post


Link to post
Share on other sites
7 minutes ago, Noah Katz said:

Do you know if Tradier allows short strangles?

 

Sure:

https://brokerage.tradier.com/support

 

Do any levels of options trading require a minimum account value?

Yes, to write uncovered puts, there is a $25,000 minimum. To write uncovered calls, there is a $100,000 minimum.

 

Share this post


Link to post
Share on other sites
On 6/29/2017 at 0:08 PM, SBatch said:

In the future I will probably begin using the Option Dynamics platform by Dynamic Trend.  It has some incredible features that I have not seen elsewhere and I did verify that it works seamlessly with Tradier so once launched there is no need to access the Tradier website.

 

The closest thing I see at the Tradier site is Dynamic Trend with Elliott Wave Turning Points; is that it?

 

Share this post


Link to post
Share on other sites
Just now, Noah Katz said:

 

The closest thing I see at the Tradier site is Dynamic Trend with Elliott Wave Turning Points; is that it?

 

It is, but I learned that it cannot be utilized with the $0 commission offer.  Therefore, I am trying the 30 day free trial with TradeHawk.  It is $297 per month with the unlimited $0 commission trades.  Also, in this case one does not also have to pay the $40 SO fee.  I actually have a demo scheduled for today.

Share this post


Link to post
Share on other sites
On 6/29/2017 at 0:08 PM, SBatch said:

In the future I will probably begin using the Option Dynamics platform by Dynamic Trend.  It has some incredible features that I have not seen elsewhere and I did verify that it works seamlessly with Tradier so once launched there is no need to access the Tradier website.

 

Good to know, thanks

 

 

Share this post


Link to post
Share on other sites

Here is a quick update on Tradier while using the TradeHawk platform.  Tradier execution continues to be as good as OptionsXpress was for me (and they have very good execution).  The TradeHawk platform is very good.  There are some things that need tweaking but they are ridiculously responsive (see email below).  I will mention that you do need to have a large monitor (or multiples which is a compatible configuration) to work with this platform.  All windows are found on the main "Command Center" page, rather than multiple pages or tabs.  This takes up a lot of screen real estate.  They can all be detached or maximized, but there are times where you will want to work with multiple windows simultaneously which is most easily done from the Command Center.  I will continue to make suggestions to the developer to improve the platform and as mentioned above here is an example of that thus far:

Hi Scott,

Looks like many of your suggested changes have been added to version 1.0.12.  I'm messing around with them now.  
 
1. For Cost basis of position, there is a button up top of the Risk Portfolio that allows a toggle between cost per contract/share and total position cost.  Also, a current VALUE column has been added.
2. If you choose a confirmation box before a trade, when you go to modify an order from the Order page, a box will appear confirming your changes.
3.  Mid point for spreads not there yet...give us a bit on that one.
4. For stock traders, auto exit order is available now.
 
Let me of any questions.
 
Thanks,
 
Lex
 
  Kevin "Lex" Luthringshausen
  OptionEyes, LLC
  M: 312.343.5273

 

  • Upvote 1

Share this post


Link to post
Share on other sites
On 7/11/2017 at 10:19 AM, SBatch said:

Here is a quick update on Tradier while using the TradeHawk platform.  Tradier execution continues to be as good as OptionsXpress was for me (and they have very good execution).  The TradeHawk platform is very good.  There are some things that need tweaking but they are ridiculously responsive (see email below).  I will mention that you do need to have a large monitor (or multiples which is a compatible configuration) to work with this platform.  All windows are found on the main "Command Center" page, rather than multiple pages or tabs.  This takes up a lot of screen real estate.  They can all be detached or maximized, but there are times where you will want to work with multiple windows simultaneously which is most easily done from the Command Center.  I will continue to make suggestions to the developer to improve the platform and as mentioned above here is an example of that thus far:

Hi Scott,

Looks like many of your suggested changes have been added to version 1.0.12.  I'm messing around with them now.  
 
1. For Cost basis of position, there is a button up top of the Risk Portfolio that allows a toggle between cost per contract/share and total position cost.  Also, a current VALUE column has been added.
2. If you choose a confirmation box before a trade, when you go to modify an order from the Order page, a box will appear confirming your changes.
3.  Mid point for spreads not there yet...give us a bit on that one.
4. For stock traders, auto exit order is available now.
 
Let me of any questions.
 
Thanks,
 
Lex
 
  Kevin "Lex" Luthringshausen
  OptionEyes, LLC
  M: 312.343.5273

 

I did a quick search and may have missed it, but did you do an ACAT transfer from IB to Tradier? How long did it take? 

I see you had some issues with cost basis, did you find out if the information tracked properly across the transfer?

Share this post


Link to post
Share on other sites
1 minute ago, Sirion said:

I did a quick search and may have missed it, but did you do an ACAT transfer from IB to Tradier? How long did it take? 

I see you had some issues with cost basis, did you find out if the information tracked properly across the transfer?

I think you may have seen a different member with issues regarding the transfer.  I was actually with OptionsXpress not IB.  I did do an ACAT and it took about 5 business days.  All information was properly transferred from OX to Tradier in my case.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account. It's easy and free!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now

  • Similar Content

    • By Ringandpinion
      I wanted to start a new topic on recent problems with major retail brokers.  With the recent dropping of commissions and subsequent massive influx of new retail traders (for many reasons), the major retail brokers have all run into slow downs, outages, backlogs and other failures.  I've been aware for sometime that my fills on both TOS and IB have had intermittent problems.  The recent thinkorswim outage was a real pain to me and I didn't get hurt by it, just massively inconvenienced, no doubt others were hit in the pocket book.  I'm a big fan of TOS, mainly because I've been on their system for a long time, their rates aren't the greatest but they don't have any other fees.  The problem I see is that there is no end in sight for these brokers to be overloaded.  Little or no commissions, zero or very little account size, and massive new resources needed on their part to solve the problem.
       
      I don't have a problem with a minimum account size and I would even be willing to pay a little more in fees or even a monthly tithe for a platform to get better fills and steadier service.  I'm starting the broker search now, I'm not looking forward to any of this, I was happy with what I had but I don't think I have that any more.  I'll post my efforts here if anybody is interested and would appreciate feedback from others as well.
    • By cwerdna
      I figured I'd start a general topic on IB since this isn't about commissions.

      I found a quirk w/IB that I'd not seen w/TOS. I bought a FDX call (not a trade discussed here) and had an open sell order on it. With the sell order open, I tried to buy another FDX call and IB won't let me. It says "Order Reject: This account cannot have open orders on both sides of the same US Options contract in any related accounts."

      If I try to override and transmit, it rejects it for the same reason. Known issue? Any workaround or just something I have to live with?

      I can do the same thing on TOS (and am doing it now). it doesn't care. It lets me do that.

      I'd rather not cancel the open sell order on FDX as I'd get hit w/a cancel/modify fee on IB, which is something unheard of on TOS (and most brokerages that I'm aware of).
    • By cmh1008
      Hi there, I am new to using the IB/ TWS platform. My understanding is that the probability of ITM can't be displayed in the option chain in TWS. As a substitute you can use the option's delta, however that does not seem to correlate very well. I would expect deviations in the low one digits but get much bigger differences. For example, in the attached screenshot I am looking at selling a 70.7 delta put on the SPY which should have a probability ITM of around 30% (1-70.7%) , then looking at the quote details shows me a probability of profit 59% which is quite far off? My only explanation would be commisions but is that it? Really stuck here so help is really appreciated? Many thanks!
       

    • By Kim
      I would like to share some parameters of selecting the right broker, based on my personal experience and feedback from our trading community. You can also read our extensive Brokers and commissions discussion on our forum.

      First, lets take a look at excellent Brokers Review published by Barrons. They do it every year, and it's worth to review the results and to read the brokers description.

      In 2018, Interactive Brokers takes the top spot, dominating in range of offerings, portfolio analysis and reports, and costs categories.



      What is more important for us as options traders is the "Best for Options Traders" category. Interactive Brokers is #1 in this category as well.



      What makes IB the best overall broker?

      You can read the Barrons article for details, but let me share my personal opinion.

      I believe that there are three most important factors when selecting the options broker:
      Cost
      Lets assume that you buy a straddle for $2 ($1 each option). With IB you will pay 0.70 per contract. To do a round trip trade is $2.80. This is 1.4% of the cost of the trade. So if my gain is 10%, then I keep 8.6% after commissions.

      If you pay $1.5 per contract, then your total cost is $6. That's 3%. You need 3% gain just to break even.

      Over time, this is HUGE. Commissions are probably the single most important factor if you are an active trader.

      Some brokers also charge a fee per ticket. This is an account killer, especially for smaller accounts. If your broker charges a ticket fee, you need to change brokers immediately.

      Here is an example from Etrade:



      Just to be clear, you will be paying $6.95 PER TRADE ($4.95 for more active traders) In addition to per contract fee. So if you trade for example one straddle, it will cost you (as an active trader) $11.90 for a round trip trade, compared to ~$3 with IB.

      TD Ameritrade is even worse:



      I'm sorry, but this is a robbery. Those brokers simply don't deserve your business.

      IB used to be the cheapest broker, but there are few other excellent options today in terms of cost.

      SteadyOptions members might consider Tradier Brokerage Special Offer. Tradier offers a special $40/Month of Flat Price Trading for SteadyOptions Clients. For $40/month the SteadyOptions client can trade unlimited options trades and there will be no per trade commissions. Please review the link for details.

      eOption also offers a special rate of $1.99 per options trade (or equity trade) plus 10₵ per options contract.to our members. Please see eOption Brokerage Special Offer for more details.

      tastyworks is also an excellent option, especially for larger accounts. They charge $1.00 per contract for opening trades, $0.00 for closing trades (so just slightly cheaper than IB), but they also capped the commissions to $10 per leg. For larger accounts, this means huge savings.
      Execution
      What's the point to have low commissions if your execution sucks?

      Well, IB has one of the best executions in the industry, thanks to its "Smart Routing":
      Unlike smart routers from other online brokers, IB SmartRouting never routes and forgets about your order. It continuously evaluates fast changing market conditions and dynamically re-routes all or parts of your order seeking to achieve optimal execution and maximize your rebate. IB SmartRouting represents each leg of a spread order independently and submits each leg at the best possible venue. From my experience, and based on members feedback, this algorithm does indeed provide an advantage compared to most other brokers. However, members who used Tradier and tastyworks also reported pretty good results.
      Platform
      Having a good and intuitive platform is the third factor that you should consider.
      It should be stable, intuitive and offer fast way to place trades. IB platform requires some learning curve, and some users consider it outdated, but personally, I like it. I might be biased as I have been using for over 10 years now, but I believe the learning curve is well worth it.
      Many users praise TD Ameritrade (thinkorswim) platform for its expensive features, but their current commissions structure makes it terrible for active options traders. Unless you were grandfathered at their older rates, or can negotiate commissions under $1.00/contract with no ticket fee, I would avoid them.
      Other Considerations
      There are some other things that you should consider, such as:
      How is the Customer service? Unfortunately, IB has one of the worst customer services in the industry. Don't expect any hand holding, and don't expect any help in case you have some trading issue. Their philosophy is "our algorithm is always right, obviously you (the customer) did something wrong."  Does the broker charge extra for real time data and how much? How about assignment fee and exercise fee? IB charges ZERO for both, while some other brokers charge $15-20. What are the margin rates? IB has the lowest margin rates in the industry. What happens in case of margin call? IB has the strictest rules regarding margin rules. When you get a margin call (in case of assignment for example), they might liquidate your positions within minutes. It's an automated process, nothing you can do about it, so try not to get a margin call with IB. What about Global Markets? IB is rated #1 by Stockbrokers.com in the Best for International Traders category. It offers very wide range of international markets and products, and also accepts clients from all around the Globe. Many other brokers have limited exposure in terms of countries they accept clients from.  Conclusion
      In this article, I tried to offer some personal perspective on selecting an options broker. In my opinion, Interactive Brokers, tastyworks and Tradier offer the best combination of cost, execution and platform. 

      That doesn't mean there are no other good brokers. This conclusion is based on my personal experience and feedback from hundreds of members.
       
      Additional reading:
      Brokers And Commissions Trading and getting fills with Interactive Brokers Executing Orders in Interactive Brokers Tradier Brokerage Special Offer Tastyworks A New Brokerage Firm eOption Brokerage Special Offer
    • By cuegis
      Have all of the IB customers received the email last night (Mar 17) informing us that we have to change our data feed subscriptions by
      April 1, 2017, otherwise we are going to be defaulted to 20 minute delayed quotes? With each quote being a "snapshot" of a moment in time and no longer "streaming" info?
      I was not 100% sure what I needed to do but, I added a $4.50 package that appears to turn the delayed data back into real-time streaming data.
      I think that was the correct choice, but I just wanted to hear from others
    • By Crazy ayzo
      I'm looking for someone that is a power user of some of the following... Tradehawk with Tradier, Interactive Brokers, Optionnetexplorer ONE, CMLviz TradeMachine... and any other tools that you find particularly useful.   My schedule is fairly flexible.  I'm in the pacific time zone.
      If this is something that interests you either post here or PM me with an hourly rate.  It's ok if you only know some of the tools, I don't expect anyone to know them all.  I can pay via paypal.
      After I get a better handle on the tools, I'd also be interest in working with someone on strategy of non-directional trades.
       
      P.S.  I did get Kim's approval before making such an off-topic post.
    • By Kim
      The impact of commissions on your results can be astonishing.
       
      This excellent article by Business Insider is asking the right questions (and also answering some of them):
       
      When you pay commission fees for online stock trades, where does that money go? Do you get better execution by paying $9.99 to TD Ameritrade than by paying $1 to Interactive Brokers? How much better? Enough to justify the difference in price?
       
      Their conclusions:
      At least 17 million investors overpaying for online brokerage Only 12% of commission fee is used for trade execution at top brokerages Over $1.8 billion per year wasted on unused premium services Lets analyze one specific month, January 2015, and see how different commissions structure can impact the returns of our SteadyOptions model portfolio.
       
      SteadyOptions $10k model portfolio traded 228 contracts in January. If you paid $0.75/contract with no ticket fee, you spent $171 on commissions, which is 1.7% of your portfolio value. While not cheap, but considering the fact that we produced 20.7% ROI in January (12.4% return on the whole account assuming 10% allocation), it is completely reasonable.
       
      However, if you had a ticket fee of $8, in addition to $0.75/contract, you would pay $427 in commissions, more than double. In this case, your returns will be reduced by 4.3%.
       
      This will make HUGE difference in the long term. To see how huge, I went to pro-trading-profits.com, a third party website that tracks performance of 400+ newsletters. I clicked on SteadyOptions performance report and played with different parameters. Using the $0.75/contract with no ticket fee, a $10,000 portfolio would produce $35,693 gains since inception. Adding $8 ticket fee to each trade would reduce the gains to $23,869.
       
      The impact of the ticket fee is especially significant if you have relatively small account.
       
      Of course commissions is only part of the whole package. Other factors include tools, platform, customer service etc. Barron's publishes a comprehensive brokers review every year. Here is the last one. Interactive Brokers (IB) was ranked #1 by Barron's third year in a row. This is the broker I personally have been using for the last 7 years and I'm very happy.
       
      Barron's mention that "IB offers a lot more support to new clients, including individuals, especially those with larger accounts. Yes, using the word "support" in the same sentence as Interactive Brokers (without the modifier "dismal") is a change for us, but the firm has clearly made this a point of focus."
       
      Their conclusion:
       
      "Interactive Brokers continues to have extremely competitive pricing, and the lowest margin fees of any broker in our survey. You may incur some data fees, but the firm takes care of any options-exercise costs, which can generate unexpected fees at many other brokers."
       
      On the open section of our forum, we have couple very useful discussions about brokers:
       
      Brokers and commissions
      Interactive Brokers tips, tricks, webtrader etc.
       
      There is a consensus among our members that IB and TOS by TD Ameritrade offer the best combination of commissions, platform, and execution. If you decide to go with TOS, I highly recommend that you negotiate a commissions structure that does not include a ticket fee.
       
      Here are couple more good articles worth reading:
       
      The Truth Behind Broker Commissions - Learning Markets
      Comparison of online brokerages in the United States
      Relative Importance Of Options Brokerage Fees
       
      For Canadian traders, here is an excellent study on the commissions schemas offered by Canadian discount Brokers.
    • By Kim
      I tried to to buy 1 Apr SPX 1300 put and getting an error message that I have insufficient margin. The message indicates that the margin will increase by 53,985 (see attached image).

       

      I opened a ticket with IB. Their response was:

       

       

       

      I couldn't believe this, but the fact remains.
    • By Bschulz
      I'm opening an account at IB and wondering if there is a promotion code or partner code to use for SO members?
  • Recently Browsing   0 members

    No registered users viewing this page.