I'm looking to do some options trading, but due to the strategy I'm planning to use, my needs regarding brokers are somewhat unusual. -I am planning on focusing on severely out-of-the-money contracts, hence low premiums (think $1 per contract at the high end). Therefore, I'll be buying/selling a lot of contracts (unless they're more than the usual 100 shares per contract), so I need someone with a low per-contract cost, at least for low-premium contracts, or else who handles larger contracts (though I'm not sure how available those would be). Due to the low movement of contracts far from market price, it's also necessary that any per-trade price be per-order, even if it's filled a part at a time. -I am planning on doing mostly multi-leg (i.e. more than two) spreads, so a substantial per-leg cost will substantially eat into my profits. -I am using a fundamentals-heavy long-term strategy; as a result, speed of execution and availability of tools and market information are not a significant factor. -I am planning on starting with a fairly small amount (probably coming out to a few hundred per quarter), probably increasing if this goes well, so anything with a sizable minimum amount is a no-go for the time being. So, with those requirements, I'm looking for suggestions. The best I've found on my own is choicetrade, with $5 per trade (not per leg) and 15 cents per contract, but I'm hoping I can do better if I can get the recommendations of people more experienced. Thanks.
eoption- 3 bucks base fee, 15 cent contracts interactivebrokers- 1 dollar base fee, .75 cent contracts
Thank you, but I investigated both of them; eoption counts each leg as a separate trade, which makes them more expensive for many-leg trades such as I am planning, and interactive brokers seems to require $10,000 balance minimum, which is more than I'm interested in risking at the moment.
Your thinking of selling 100 contracts and have less than 10,000 k to start? I hope you have a lot of experience selling low probability spreads. That's a very dangerous strategy. Like the OP said, eoption or ibkr ( especially if you can figure out how yo maximize rebates for your unique trading.) I doubt you can find better for retail.
Deposit $10,000 then withdraw some. With IB the first $2000.00 is un-tradeable so if you withdraw $5000.00 you will have $3000.00 to trade with. Also be sure to fudge the "Know your customer" questions by exaggerating your net worth and option trading experience. This applies to all brokers.
$5000 is still more than I want to start with, and those sort of tricks are really things I don't want to be doing... Apparently choicetrade doesn't. If that turns out not to be true, I plan to switch.
Another thing to consider is what products you intend to trade. If you are trading proprietary products such as VIX SPX or OEX you will have substatial exchange fees added by most brokers. Some will offer you an "all in" commission rate and not add in these exchange fees.
Nobody wants to do "those sort of tricks" but sometimes it is necessary if you are short of funds or lack experience in trading options.