Brokers and commissions

[Kim]

You are absolutely correct. I was just trying to understand why 1.5 per contract is cheaper. It is not really .  .65/contract pricing with TDA and so its cheaper to trade more contracts than IB . e.g for 100 contracts it will be   

on IB at  1.5  =  $150  and on TOS it is  just $75  at   .65/contract  and $10 ticket fee.

 

So TOS is cheaper for high volume trades 

Not sure about your math. 100 contracts with IB = $75. 100 contracts with TOS = $65+$10=$75. So even for 100 contracts, you will pay the same.

 

Look at this this way:

 

We trade around 150 trades per year. Most of them are double calendars or straddles with some adjustments, so around 4 orders per trade. Total of 600 orders. With $10 ticket fee, that's $6000. If you have 10k account, you give 60% of your account to the broker, And this is even before the contract fees.

 

For small(er) account, the ticket fee is a disaster.

[Dr. Z.]

mukunda: IB has discounts for volume customers. See https://www.interactivebrokers.com/en/index.php?f=commission&p=options1

 

Unfortunately I don't quite do 10,000 contracts per month yet 

[Optrader]

Not sure about your math. 100 contracts with IB = $75. 100 contracts with TOS = $65+$10=$75. So even for 100 contracts, you will pay the same.

 

Look at this this way:

 

We trade around 150 trades per year. Most of them are double calendars or straddles with some adjustments, so around 4 orders per trade. Total of 600 orders. With $10 ticket fee, that's $6000. If you have 10k account, you give 60% of your account to the broker, And this is even before the contract fees.

 

For small(er) account, the ticket fee is a disaster.

 

Completely Agree that for small accounts, no way you should be paying ticket fee and that is why when I started last year, I saw transaction fees piling up . I immediately started calling TOS and started reducing it as it was just too much.

I trade too much . Not quite 10K per month, but the step up from .70 to .50 in IB  is huge gap.

 

But the mobile platform in TOS has saved me a lot of money I believe which I may not have in IB by entering the right prices of spreads . 

The problem that I have is I cannot use a computer for trading as I work full time. I have to rely on mobile app almost exclusively.

and the mobile app in TOS is so feature rich and easy that I am on top of all the trades with precision .

Only time I use computer is for backtesting which cannot be done on mobile. even IB does not have backtesting mobile app or anyone.  

 

I tried to demo dough today. It looks quite neat site with bell curve which I always wanted to see, which is nice .  But I dont think it will ever become a primary platform as its ok for long term trades and more of learning tool , but for short term. The precision pricing  and real time is more important than a strategy analysis tool.

 

Thanks everyone for your comments and advise. I appreciate you taking time and effort to respond 

[lrfsdad]

How many of use only use IB mobile trader app ONLY ?

Me. And tos mobile too.

[marektmika57]

I've been using Dough for a while and don't see any difference in executing pricing. I was running side by side Dough on Mac and TOS on PC and pricing are the same maybe fraction of the second. Of course using demo Dough version it's not real time same as TOS if you don't have account I don't think they going to get real time pricing for free. As far as mobile app not using since working on 2nd shift on west coast practically I can monitor account on bigger screen 29".

Just my 2 cents.

Mark

[Edwin]

I've been using Dough for a while and don't see any difference in executing pricing. I was running side by side Dough on Mac and TOS on PC and pricing are the same maybe fraction of the second. Of course using demo Dough version it's not real time same as TOS if you don't have account I don't think they going to get real time pricing for free. As far as mobile app not using since working on 2nd shift on west coast practically I can monitor account on bigger screen 29".

Just my 2 cents.

Mark

I think Dough is more meant for beginners and an intro to options, and providing a somewhat simpler web interface into options trading compared to TOS, and allow newbies to follow other traders on their trades for free to understand different strategies and management of positions.  They also want people to watch Tastytrade, and there are some portfolio visualizations available if you have a TOS account.  There's also an iPhone mobile app for Dough.  I'll stop now before sounding like a I work for them...

[Kim]

I must say that to me, the whole Dough/tastytrade/TOS connection is very fishy. 

 

Think about it: Tom Sosnoff mantra is “trade small, trade often”. Who benefits from it the most? TOS. But wait - isn't Sosnoff one of the shareholders in TOS?? To me, this is HUGE conflict of interest.

 

You can read a review of tastytrade here:

http://www.the-lazy-trader.com/2013/04/tastytrade-truly-changing-financial.html

 

And here are couple of my articles about some of their so called "studies":

Buying Premium Prior To Earnings - Does It Work?

Can We Profit From Volatility Expansion Into Earnings

[krissi]

I must say that to me, the whole Dough/tastytrade/TOS connection is very fishy. 

 

Think about it: Tom Sosnoff mantra is “trade small, trade often”. Who benefits from it the most? TOS. But wait - isn't Sosnoff one of the shareholders in TOS?? To me, this is HUGE conflict of interest.

 

 

 

Agreed.  I used to watch TastyTrade a lot, but they lost me with their "trade small, trade often" mantra and also the fact that they let their losers run and manage their winners.  How can you make money if you take your winners off at 10-15% but you let your losers run?  So one bad iron condor trade can ruin a whole year of winning trades.  No thanks.  

[Edwin]

I would agree that TastyTrade's main premise is to trade small and often, which is basically luring people to create more transactions with TOS/TDA.  I would imagine that their main revenue source is from their "partnership" with TOS, "Bob the Trader" and any money made from trading.  They suggest selling straddles and strangles with IVR is high in non-correlated products and managing winners at 25% of max profit for straddles and 50% for strangles.

[BobS]

I, like everyone else, is trying to reduce commission costs. I came across this web site http://www.onlinebrokerrev.com/commissions_and_fees/options-trading-commissions.phpwhere you can enter the number of round trip contracts and it will come back with the costs for each online broker. Not sure if it is 100% accurate but even if it close, then eoption appears to be the cheapest, by far. Is anyone using them and if so, what is your experience ? Unless TOS can at least match IB, I will be moving away from them but before I do, would like to know if anyone has any experience with eoption. Even with the best ROI on my trades, if I do not get the commission structure right first then I am shooting myself in the foot. Thanks,

[BobS]

Another interesting perspective on eoptions written in March 2015. It points what it appears a lot of members are doing; use another website for analysis and using IB to place the trades. https://stockpeer.com/blog/27/eoptioncom-hands-down-the-cheapest-trading-commissions

[luxmon]

Does anyone have any experience with Tradier?  They seem to be a low cost brokerage integrated with a lot of platforms, including OptionNET Explorer (https://brokerage.tradier.com/platforms/optionnet-explorer).  The pricing page seems to indicate that ONE costs $55 per month for brokerage clients, and is further discounted with increasing trading activity.  

 

The last thing I need is another brokerage platform / account to deal with, but might be a cheapskate way to access the ONE software and get good commission rates on smaller cost spreads.  Just checking to see if anyone has used them and might provide some feedback on execution and customer service.

 

Thanks,

Tim

[Kim]

ONE is $450 GBP for SO members, which is around $700, so not a big difference from $55/month.

[Almony]

I did not read this entire forum so please forgive me if someone already asked this question. 

Since there are many members on this site that use IB as their broker, can we negotiate with

them for a group rate on option commissions  ? 

[Kim]

As far as I know, IB doesn't negotiate commissions. 

[Bigswan]

Anyone tried lightspeed / livevolx? Platform looks pretty robust, rich option analysis etc, and lowest commissions out there, yet I never dad of any members using it? Appreciate your comments.

[Thinkola]

Hi investments friends! Greetings from Norway!

 

(I'm a very new member here, so sorry if I ask about what most of you already know very well)

 

Could someone give an update per autumn 2015 what broker is cheaper for what number of contracts per leg? Are 4 legs (2 legs when we buy and 2 legs when we sell) per trade the average for our trades? It feels like a small number as we adjust/roll quite often on each trade, right? 

 

Our recommended account sizes are $10K-$100K, and suppose we allocate 10% into each trade, we do trading of between $1000 and $10000 pr trade, so the larger accounts will often buy at least 10 contracts per leg, maybe a lot more.

 

This thread started with mentioning TradeKing being cheaper (than IB) in 2012 when buying 5 contracts or more per leg (assuming 4 legs on each trade). But thats a long time ago, an update on commisions would be very nice!   

[Kim]

I still believe that no matter your account size, you should still get rid of the ticket fee. We often scale in and out of the trades, plus adjust, and those ticket fees will add up. I don't see one single reason not to trade with IB. They have the best combination of execution, commissions and platform.

[Thinkola]

Thank you for quick answer! (This service is promising in many ways :-) 

 

I understand the ticket fee problem when scaling in and out of the trades (if that means going in and out of the trade with adding one or a few contracts several times over), but I couldn't see the commision problem when rolling all of a legs contracts to another strike price if the ticket fee + contracts fee is lower than IB contracts fee. But maybe the difference on contract commision fees has become much smaller than it was in 2012?

 

I'm glad to be at the broker you recommend then. As new to your service, do you recommend any subscription on either of these data services for at least $39 a month (see pasted content below)? And is it more expensive to use TraderWorkStation than only the WebTrader service (I tried to find that in the price list, but couldn't find it)? If so, do you still recommend TraderWorkStation?

Data Services: Research Data Bundle

The Research Data Bundle for each region includes the following:

• Reuters Worldwide Fundamentals
• Reuters StreetEvents Calendars
• Region Specific Dow Jones Trader News

• MT Newswires
  (Global Professional and North America Professional only)
• The Fly
  (Global Professional and North America Professional only)

• Briefing.com
  (Global Professional and North America Professional only)
• Recognia

  Non-Professional
Monthly Fee Professional
Monthly Fee Global (includes all three regions) 64.00 197.00 North America 39.00 149.00 Europe 39.00 149.00 Asia-Pacific 39.00 149.00

[Kim]

I don't subscribe to any of those.

 

I have:

Market Data Express Indices $2.00

CBOE Futures $2.50

 

That's it.

[Vin]

I use "IB" and fidelity. Looks like "IB" is charging "$1.57" per vix contract and also "$1.54" for SPX contract.   Planning to switch to eoptions when i trade more than 3 contracts. I think they charge "$.79" for SPX and "$.69" for vix contract plus $3.00 per base per leg. I think other options trade at "$.19" per contract with $3 base per leg.   Have any one used eoptions ??  How much does trade station charge. they say "$1", but with misc fee how much doe sit come to ?? Any suggestions.

[craigsmith]

I use "IB" and fidelity. Looks like "IB" is charging "$1.57" per vix contract and also "$1.54" for SPX contract.   Planning to switch to eoptions when i trade more than 3 contracts. I think they charge "$.79" for SPX and "$.69" for vix contract plus $3.00 per base per leg. I think other options trade at "$.19" per contract with $3 base per leg.   Have any one used eoptions ??  How much does trade station charge. they say "$1", but with misc fee how much doe sit come to ?? Any suggestions.

Just be aware, eoptions sells their order flow. It doesn't hit the market directly. It's my understanding IB sends orders directly to the market. This is just my understanding about IB. If someone that knows exactly how IB and other brokers handle orders, please respond.

[Vin]

I think eoptions execution is very efficient. They are on par with other tob brokers. Only thing is we cannot execute more than 2 legs at a time. Their trading platform is not good. They are planning to release new trading platform next month. I think it should take care of that issue.

[Yowster]

Also, since you mentioned the VIX options, beware that brokers other than IB have typically have much higher margin requirements for VIX calendar spreads, and some don't even let you open these trades.   Before switching, I'd recommend finding out how they handle these trades.

[Vin]

You are correct. Epotion doesn't let us do calendar trades on VIX.

For $1050 margin I can trade 7 VIx contracts at IB. ANd comission for 7 legs is          (7* $1.57 ) *2 = $21.98 . So its $21.98 + $21.98 = $43.96 to open and close the trade. Does anyone pay less than this commission. Please suggest.

[candreouTrade]

Hi Kim, what do you think of using TradeStation instead of using IB and OneNet?

 

My understanding is that TradeStation has lots of back data available so run historic backtesting etc.

[Kim]

It's a good broker, probably among the best. Here are the reviews - http://investimonials.com/brokers/reviews-trade-station.aspx

[Rogers]

I am at $1.25 per contract with TOS and my request for a lower rate was denied.  Thinking about going to IB but the tools on TOS are so much better.  How is the IB mobile application?  I do all of my trading on an iphone.

 

At first glance the IB iphone application looks like it leaves A LOT to be desired.   suggestions?

[Turtle]

I started using TOS mobile because, like you, i do most of my trades on my iphone. TOS mobile is light years ahead of the IB mobile version. The risk of errors is greatly reduced too in TOS. Worth paying $1.25/lot in my mind

Edited March 9, 2016 by Eric Attias

[samstrong]

As a new member I have been paper trading but today decided to enter the BABA trade with 36 contracts only to discover my commission was $215. So I can compare, would someone be able to tell me what their commission would be for doing that size on the whole trade - ie 144 contracts

[greenspan76]

As a new member I have been paper trading but today decided to enter the BABA trade with 36 contracts only to discover my commission was $215. So I can compare, would someone be able to tell me what their commission would be for doing that size on the whole trade - ie 144 contracts

I don't know who your broker is, but I am using IB (Interactive Brokers). IB quotes $0.70 per contract, but there are pass-through exchange fees of a couple cents plus by default they will route your order to the cheaper overall cost, even if it means routing to an exchange with higher commission. Overall, you can expect an average of about $0.75-$0.80 per contract - I believe there is a pretty extensive discussion in this very thread about it, so you may have already read about this.

 

To your question, I have opened 42 spreads on BABA so far and paid $65.89 in commissions, so I would expect the total commission after they're closed to be below $135. If you paid the same rate on opening and closing 36 spreads, it would be about $113 total commission.

Edited May 1, 2016 by greenspan76

[samstrong]

Thanks for your reply - I appreciate it.

May 16 77.5 put 36

May wk1 77.5 put 36

May 16 80 Call 36

May wk1 80 36

[samstrong]

Thanks for your reply - I appreciate it. Just to be sure - when you say I have opened 42 spreads is that:

May 16 77.5 Put 42 (number of contracts)

May wk1 77.5 Put 42

May 16 80 Call 42

May wk1 80 CALL 42

.....If so your commissions are are significantly cheaper than Optionsxpress and I need to change my broker!

[Gary]

Thanks for your reply - I appreciate it. Just to be sure - when you say I have opened 42 spreads is that:

May 16 77.5 Put 42 (number of contracts)

May wk1 77.5 Put 42

May 16 80 Call 42

May wk1 80 CALL 42

.....If so your commissions are are significantly cheaper than Optionsxpress and I need to change my broker!

 

I think greenspan76 is referring to a single calendar, while you are referring to a double calendar.

 

greenspan76's commission per contract is 65.89 / (42 * 2) = $0.78

 

If I understand your post correctly, your commission per contract is 215.00 / (36 * 4) = $1.49

 

So yes it seems you could save on commissions by switching brokers. Aside from commissions, you will probably also benefit from better execution (from what I've heard about OptionsExpress). I like IB. TOS and TradeStation are also popular. If you want to negotiate I think you'll have better luck with TOS or TradeStation (although not sure you'll beat IB). I have accounts with all three to enable analysis but trade with IB. Good luck.

[greenspan76]

Thanks for your reply - I appreciate it. Just to be sure - when you say I have opened 42 spreads is that:

May 16 77.5 Put 42 (number of contracts)

May wk1 77.5 Put 42

May 16 80 Call 42

May wk1 80 CALL 42

.....If so your commissions are are significantly cheaper than Optionsxpress and I need to change my broker!

Sorry, like Gary said, I was referring to opening and closing a single calendar for $113 total. A double calendar would be twice as much Edited May 1, 2016 by greenspan76

[samstrong]

Thanks to you both - it seems the costs are very close then although I take your point about better execution. Whilst paper trading I was rather overlooking the impact of commissions - it means that in the case of BABA for example the spread has to move at least 7% odd to break even.

[greenspan76]

Thanks to you both - it seems the costs are very close then although I take your point about better execution. Whilst paper trading I was rather overlooking the impact of commissions - it means that in the case of BABA for example the spread has to move at least 7% odd to break even.

Two things:

 

1) Remember, I was quoting the price to both open and close the trade. So for someone using IB, opening 36 double calendars (144 total contracts) would cost about $113 + you'll still have to close the contracts for another $113, so about $226 total. The commissions you're paying are $215 to open + you'll pay another $215 to close, for a total of $430. A fair comparison is IB = $226 vs $430 for your broker.

 

2) This is why SO rarely trades calendars that are this cheap. The reason for trading this one is that it is a very good price historically, so probabilities say it should move enough to cover the commissions and still provide a reasonable profit. Of course, that doesn't mean it will happen in this particular case, but we're just playing probabilities here.

[samstrong]

Yes you are right of course - thanks again for coming back, appreciated!

[Kim]

When comparing commissions, please make sure you compare apples to apples - meaning price per contract. Quoting something like "I opened 42 spreads" might cause confusion since we don't know if you refer to single or double calendar. Generally speaking, I believe that IB is very hard to beat in terms of commissions.

[krisbee]

Hi,

I'm planning to switch to IB, and getting familiar on their tools. for a sample RIC trade of 10 contracts each like the below example

BTO 10 LULU CALL / STO 10 LULU CALL / BTO 10 LULU PUT/ STO 10 LULU PUT

IB shows the commission estimate as (16.57 ... 51.37 USD). My current broker fidelity shows 36.95. (I've negotiated trade fee of 6.95 with them)

Now, since IB shows a range in commission, I'm not sure what it'll be. 

Can anyone tell me if there is a settings?The only reason I wanted to switch to IB is for cheaper commission.

[Kim]

I'm laying on averag 0.75 per contract. So for 10 ICs it will be around $30.

[krisbee]

34 minutes ago, SteadyOptions said:

I'm laying on averag 0.75 per contract. So for 10 ICs it will be around $30.

Thanks Kim. Since the IB is showing the maximum commission range of 51.37, will there be a chance they'll change more than 30$? I saw the commission rate as .75 per contract and 1$ per transaction. So I'm assuming it should be 31$ overall

[Kim]

IB don't charge for transaction, only per contract. I'm not sure why the show the range. the official rate is 0.70 per contract plus various exchange fees. The calculation is complicated, sometimes you will pay more than 0.70 and sometimes less, but in the long term, the average is around 0.75.

[Kim]

Yes, except for the price that should be around 1.50 not 15.0.

[ahrdlicka]

I trade with Scottrade Pro. As far as I can tell, Scottrade is the introducing broker, but my account is actually held at IB. The pricing is quite a bit different than IB's regular pricing. Options are 50 cents per contract, but with a $5 minimum. So, if a trade only has 2 contracts, I'll pay $5 plus the usual exchange fees. But if a trade has 10 contracts, I'll still only pay $5 plus the usual exchange fees. So, for trades with 1-7 contracts IB's regular commission structure is better. But for trades with 8 or more contracts, Scottrade Pro's structure is better. 

 

Just thought I'd throw this out there, since I haven't seen any discussion about it, and the 50 cents per contract price is a 28 percent decrease from IB's standard pricing.

[pintodave]

On 6/7/2016 at 8:01 AM, ahrdlicka said:

I trade with Scottrade Pro. As far as I can tell, Scottrade is the introducing broker, but my account is actually held at IB. The pricing is quite a bit different than IB's regular pricing. Options are 50 cents per contract, but with a $5 minimum. So, if a trade only has 2 contracts, I'll pay $5 plus the usual exchange fees. But if a trade has 10 contracts, I'll still only pay $5 plus the usual exchange fees. So, for trades with 1-7 contracts IB's regular commission structure is better. But for trades with 8 or more contracts, Scottrade Pro's structure is better. 

 

Just thought I'd throw this out there, since I haven't seen any discussion about it, and the 50 cents per contract price is a 28 percent decrease from IB's standard pricing.

 

Is the mobile platform any different than the regular IB mobile app? 

[ahrdlicka]

3 hours ago, pintodave said:

 

Is the mobile platform any different than the regular IB mobile app? 

I just downloaded the app and logged right in with my IB credentials. You would never know that Scottrade is involved.

Once you're setup it's treated like a regular IB account. In fact, when I opened my Scottrade Pro account I even had to ACAT my Scottrade IRA to IB.  I have an IB login, complete with the goofy security card.  And all of their TWS software is available. 

It really is like having an account with IB. The difference is in commission pricing, and the fact that there's a customer support team at Scottrade that is very responsive. 

[krisbee]

 

5 hours ago, ahrdlicka said:

I just downloaded the app and logged right in with my IB credentials. You would never know that Scottrade is involved.

Once you're setup it's treated like a regular IB account. In fact, when I opened my Scottrade Pro account I even had to ACAT my Scottrade IRA to IB.  I have an IB login, complete with the goofy security card.  And all of their TWS software is available. 

It really is like having an account with IB. The difference is in commission pricing, and the fact that there's a customer support team at Scottrade that is very responsive. 

https://about.scottrade.com/news/releases/2015/Scottrade-Introduces-New-Active-Trading-Offering-for-Complex-Options-Traders.html

[pintodave]

I really need to sit down to see if I can tolerate the IB mobile platform...... That is a pretty sweet commission structure.

[RapperT]

On 6/13/2016 at 4:45 AM, pintodave said:

I really need to sit down to see if I can tolerate the IB mobile platform...... That is a pretty sweet commission structure.

I would like some feedback on this...anyone travel a lot for work and have feedback on tradestation vs IB vs whomever?

Even the "good" mobile platforms can be lacking so if IB is that bad, Im not sure I could do it.

 

I have to move to a better broker though