FORUMS BROKERS SOFTWARE
Home
 
    Forums > Main > Options > The Cheapest Option Broker


Reply
 
Thread Tools
Old Jul 27th, 2011, 03:24 PM   #1
dragonman
 
 
Join Date: Jun 2011
Posts: 147
I am trying to find the cheapest online option broker for a retail trader regarding US options as measured by the commissions per option contract (I trade usually low volumes so I measure the commission per single contract and not per larger volumes).

So far Lightspeed ($0.60 with $1.00 minimum), IB ($0.70 with $1.00 minimum), MB ($0.95), and TOS ($2.95) are the cheapest that I found, but there may be other brokers with cheap option commissions of which I am not aware and I would appreciate if you let me know about them.

I heard some stories about problems with brokers (such as regarding their customer service) and I know there are other important things except for price, so I try to find the best balance between cheap price and reasonable service. Thanks in advance for your feedback.
    Quote
Old Jul 27th, 2011, 03:30 PM   #2
TheGoonior
 
 
Join Date: Oct 2009
Posts: 883
$2.95 seems high on TOS. I currently pay $1.25/contract and I'm by no means a high roller and don't do hundreds of contracts a month. I did open my account several years ago, so maybe things have changed since they got picked up by TDA. They won't match IBs price, but you might at least ask and see if they can do better than $2.95.
The TOS platform itself is first rate for options.
I use both TOS and IB currently and that's been a good combo.
    Quote
Old Jul 27th, 2011, 04:50 PM   #3
SideTrader
 
 
Join Date: Jan 2011
Location: San Diego, CA
Posts: 22
I agree with TheGoonior. I also have TOS and negotiated to $1.50 a contract outright with no ticket charge. I only swing about 200 contracts a month, so that's the best rate they'll give me as of now. I just heard that they will match their parent company, TDA, which is $9.99 plus $0.75 a contract. Probably a better deal if you consistently put on trades of about 14 or more contracts at a time. Their platform great for options trading, however, I can only compare with one other company.

OptionsHouse may have slightly better rates but the platform was not for me. Not as easy to use as TOS.
    Quote
Old Jul 28th, 2011, 06:45 AM   #4
FrankSlaughtery
 
 
Join Date: Aug 2010
Posts: 849
+1 re negotiating TOS' rates. also remember to take into account other fees like ib's modify/cancel fee. yes you can get credited on this for PART of the fee but it can still add up if you modify/cancel orders a lot. i know i do this alot (and pls don't say "if you always hit the bid/ask you'd never have any fees ). the total package (all fees, execution, security of funds,etc) should be taken into account when looking at a broker.
    Quote
Old Jul 28th, 2011, 07:45 AM   #5
spindr0
 
 
Join Date: Nov 2005
Posts: 4,156
Quote:
Quote from FrankSlaughtery:

+1 re negotiating TOS' rates. also remember to take into account other fees like ib's modify/cancel fee. yes you can get credited on this for PART of the fee but it can still add up if you modify/cancel orders a lot. i know i do this alot (and pls don't say "if you always hit the bid/ask you'd never have any fees ). the total package (all fees, execution, security of funds,etc) should be taken into account when looking at a broker.
The exchanges charge the cancel fees. IB provides a credit for executions so if you trade cleanly, there are no cancel/modify fees passed through. Most brokers overcharge you on the commission side and eat the cancel fee. So for someone who modifies/cancels orders a lot, IB may not be the best place for you.

Why shouldn't someone say "if you always hit the bid/ask you'd never have any fees." ? It's true (check out their "execution credit" page).
    Quote
Old Jul 28th, 2011, 07:49 AM   #6
zdreg
 
 
Join Date: Oct 2003
Posts: 9,099
el cheapos- there are differences in quality of executions which more than make up for higher commissions.
    Quote
 
Reply
Thread Tools

Forum Jump



   Conduct Rules   Privacy Policy   Sitemap Copyright © 2014, Elite Trader. All rights reserved.   

WHILE YOU'RE HERE, TAKE A MINUTE TO VISIT SOME OF OUR SPONSORS:
Advantage Futures
Futures Trading & Clearing
AMP Global Clearing
Futures and FX Trading
Collective2
Automated Trading Services
CTS
Futures Trading Software
dom993trading.com
NinjaTrader Consulting
eSignal
Trading Software Provider
FXCM
Forex Trading Services
Global Futures
Futures, Options & FX Trading
Interactive Brokers
Pro Gateway to World Markets
JC Trading Group
Direct Access Trading
MB Trading
Direct Access Trading
NinjaTrader
Trading Software Provider
optionshouse
Option Trading & Education
Rithmic
Futures Trade Execution Platform
SpeedTrader
Direct Access Trading
SpreadProfessor
Spread Trading Instruction
thenut-trader.com
FX, Gold, & Stock Signals
TradersStudio
System Building & Backtesting
Tradier
Equity and Options Trading
Trading Technologies
Trading Software Provider