Best Commission Rates? Best Broker?

[mks212 0]

I am curious as to what people are paying per trade at their respective brokers? If I am going to start doing more of these option trades I'd like to take a hard look at what I am paying, obviously. I am paying about $10 per trade at TD Ameritrade and am thinking that this is too much. Interactive Brokers seem to be cheaper.

Also, I don't love entering trades on Think Or Swim, I find it a bit confusing and very easy to select the incorrect contract. Is the Interactive Brokers technology better/easier to use?

Also, I am sure I am not the first person to ask this, but I searched the forum and didn't see a post regarding brokers. If there is one, kindly paste the link here and I will read there.

Thank you.

[RobertB 5]

mks212,

If you search this site for words such as Interactive Brokers, IB, TOS, ThinkOrSwim, you'll find a lot of discussions about some of your questions. Perhaps someone will post a few links for you to some of these areas.

TOS is much easier to learn than is IB, but IB has lower rates and (in my opinion) better fills. If you find TOS confusing, just play around with it some more in paper trading mode. Most people find that they have very few complaints about TOS's interface.

[cwerdna 12]

I am curious as to what people are paying per trade at their respective brokers? If I am going to start doing more of these option trades I'd like to take a hard look at what I am paying, obviously. I am paying about $10 per trade at TD Ameritrade and am thinking that this is too much. Interactive Brokers seem to be cheaper.

Also, I don't love entering trades on Think Or Swim, I find it a bit confusing and very easy to select the incorrect contract. Is the Interactive Brokers technology better/easier to use?

Also, I am sure I am not the first person to ask this, but I searched the forum and didn't see a post regarding brokers. If there is one, kindly paste the link here and I will read there.

Thank you.

See http://steadyoptions...ns/page__st__0.

Yes, $10/trade at TD AM is a rip. I opened an account w/ TOS at $2.95/contract and was grandfathered into that when the TD AM and TOS integration was complete. I got feedback from Kim and others that it's too high. I negotiated them down to $1.25/contract, but I was doing >$700/month in commissions w/TOS at the time I was paying $2.95/contract.

Well, for me, TOS can be daunting as there's so much functionality and so much that one can learn (some you have to learn via Investools training, someone showing you, Swimlessons, videos, etc.) But, if you think TOS is bad, IMHO, IB is even worse in terms of UI.

IB's commissions are lower, but they suck for trading non-spreads due to cancel/modify fees on singled-legged options trades. At least they finally recently reduced them. IB also doesn't let you close out short option positions of a nickel or less for free.

IB has a few pros for SO trades. It is very convenient to be able to easily see, act on and monitor multiple spreads at a time. I don't know of a way to do that on TOS. Also, I don't think you can graph spread prices on TOS, unlike IB.

Also, on IB, their treatment/terminology of certain types of trades and having to use NEGATIVE limit prices for those can be real confusing. I and others got bit by this: http://steadyoptions...entry5750.��TOS is usually pretty clear about debit and credit and there are only a few cases on TOS where you have confusing negative price values. (See post 59, my link got mangled. Seems to happen here a lot.)

IB also has annoying commission monthly minimums, otherwise you might have to pay for difference and/or for data feeds.

In the cases where IB's terminology is confusing and usage of negative prices are required, I usually just use TOS for that, to avoid confusion. Also, back to TOS vs. IB, for some of Kim's non-earnings trades, since I'm not real familiar w/IB, I find making adjustments to be extra confusing on IB. It's easier on TOS, but then again, I've been using TOS way longer.

Edited November 29, 2012 by cwerdna

[Marco 223]

There's a looong post about this here. http://steadyoptions.com/forum/topic/5-brokers-and-commissions/

I think above post sums up the pros and cons of TOS and IB quite well. Most people here seem to use either IB or TOS. There are cheaper deals around, also depending on the average size of your trade however it seems members experience a lot worse fill with these brokers (option house etc.) so fees aren't the only thing to watch.

IB is a bit more 'complicated to use' and probably more geared towards more experienced traders. TOS has a trading platform that most people here seem to like better than IB's however they are a bit more expensive. If you go with TOS I think Kim has negotiated a discount for SO members which is better than their standard rate, but if you are very active you might get even better rates than that.

I'd say group consensus (from above thread) is to go with either IB or TOS. Both offer paper accounts so have a look at their platforms and which you like better.

I'm with IB.

[mks212 0]

Thank you Marco and cwerdna. My biggest issue with TOS is when entering trades that cross expirations (calendar spreads for example). I have found it a little bit to easy to select the wrong option.

Reading the posts you mentioned, I'm going to stick with TOS for now since I at least know their system the best. I'll revisit in a month. In the meantime, I will give them a call and see about reducing rates for the options trades that I am starting to do as I will be trading for real starting in Dec, not just using the paper system.

[Kim 7,943]

I agree with all the above. The consensus seems to be that TOS and IB are the best overall. I'm with IB, I just don't see a reason to pay over $1 if I can pay .70 with IB. Over time, it adds up. btw, TOS has special 1.50 rate for SO members, it this is less than you are paying now, you can reduce it. And 1.50 is a starting point, you can try and negotiate less.

[Beltdancer 1]

I'm in the middle of dumping optionshouse for IB after getting absolutely horrible fills. The execution advantage of IB over optionshouse, for example, should far outweigh the .70 vs. .15 commission. Plus optionshouse charges a ticket fee of $12.50 for spreads. I don't see any advantage of going with anyone other than IB or TOS. Even on the most liquid options, e.g., SPY, IB will still get better fills on average. There are no savings to be had from so-called low commission brokers when you factor in trade execution, IMO.

[Beltdancer 1]

Kim, one question on IB. What cost structure do you use and what data packages do you pay for? I know they wave some of the fees for activity.

[Marco 223]

Kim, one question on IB. What cost structure do you use and what data packages do you pay for? I know they wave some of the fees for activity.

if you go for the 'US bundle' you get feeds for (pretty much) all stock options, futures and stocks. It costs 10$/month and is free if you pay comm of 30$ or more a month. I have 'Russel Indicies' and 'CBOE/MDX Indicies' for 1$ and 2$ a month on top to see RUT and VIX etc.

[Gary 20]

Has anyone tried tradeMonster? Barron's rated them highly for options. Of course, they rated OptionsHouse highly too (I've read all the posts about OH's fills). tradeMonster's commissions will be higher than IB unless you're trading enough contracts to overcome that fixed cost per trade. Their tools seem to be excellent though (nice "spectral" visualizations of the greeks, for example). Not sure what their fills are like.

 

I've been using IB for years so I'm comfortable with the interface and think they have a good balance of cost & execution quality. I may fund a tradeMonster account with the minimum just to see what their tools are like and possibly to try and get a couple of fills (you get a few commission free trades to start). I was also thinking of funding TD/TOS with the min to gain access their tools. Are there any other brokers that might be worth a try for the tools if nothing else?

 

Happy trading.

Edited February 17, 2013 by Gary

[Marco 223]

you can use many TOS tools (like think back) with a paper trading a/c. You have to renew that every 2 months (pretty quick) otherwise if you have $2k to spare thats their minimum.

Never tried TradeMonster - but as you say fees wouldn't be my only concern. Execution make make much more of a difference.

[greenday 0]

What is the best commission one can negotiate with TOS?

[samico 8]

Has anyone tried tradeMonster? Barron's rated them highly for options. Of course, they rated OptionsHouse highly too (I've read all the posts about OH's fills). tradeMonster's commissions will be higher than IB unless you're trading enough contracts to overcome that fixed cost per trade. Their tools seem to be excellent though (nice "spectral" visualizations of the greeks, for example). Not sure what their fills are like.

 

I've been using IB for years so I'm comfortable with the interface and think they have a good balance of cost & execution quality. I may fund a tradeMonster account with the minimum just to see what their tools are like and possibly to try and get a couple of fills (you get a few commission free trades to start). I was also thinking of funding TD/TOS with the min to gain access their tools. Are there any other brokers that might be worth a try for the tools if nothing else?

 

Happy trading.

I ve used trade monster in the past and their fills are horrible. I am almost sure they cross orders internally, something that tos and ib don't do (i believe). 

 

Rodrigo

[Lucky Trader 1]

I'm using Trade Station.  $1.00 per contract.  Free platform if you trade at least 50 contracts per month, otherwise platform fee of $100 per month.  Live feeds cost about $10 per month.  There is a lot of functionality on the platform.  I am happy with the fills.  I usually get filled at the mid unless I am in a hurry.