negotiated option commissions

Discussion in 'Professional Trading' started by starvingtrader, Dec 25, 2009.

  1. I have recently started trading options in decent size. This month I did 2,250 options, and will probably be doing triple this a year from now.

    Does anyone have an opinion as to whether my current trading volume would qualify for negotiated rates? I am trading through E-Trade right now and paying $0.75 per option I see that OptionHouse has $0.15 as a standard rate.
  2. Is that really per option, isn't it rather per contract? :)
  3. Sorry to sound dense, but what's the difference?
  4. Simple: options are traded as contracts, a contract usually consists of 100 options... So it makes a big difference... :)
  5. cvds16


    let traderum bablle on, he doesn't know what he is talking about and is fantasy trading a delayed playback version of a papertrading account.
    However it's more complicated then you OP states it: there is a fixed cost + 0.75 USD per contract a trade or for optionhouse +0.15 per contract a trade. I don't know how many contracts you do per trade but that could make all the difference. I used to trade options through interactivebrokers, they don't have the fixed cost, for most small to medium sized traders they will be hard to beat, but it all depends ...
    Bottomline you should do an analysis of your trades and do a simulation and you'll soon find out who is cheapest and at what point you should go to someone else.
  6. The OP asked what the difference is between options and contracts,
    and I said:
    "Simple: options are traded as contracts, a contract usually consists of 100 options... So it makes a big difference... :)"

    What's wrong with what I said? Come on and explain it!

    Or are you trying to badmouth me in the public because I use a Demo account at Interactive Brokers? I'm just testing the platform and the API of IB, I have my trading account at TD Ameritrade, and I'm not sure whether I will ever open an account at IB because of such paid IB sales pitches like you here on ET! I would say you are sick persons!
  7. traderum there was an error in your sentence causing confusion. I believe you meant an options contract is 100 shares of the underlying equity, not a contract is 100 options (which makes no sense)
  8. No, this isn't the case. Shares and options are different things.
    In options trading a contract is a bag of usually 100 options. So I stand by what I wrote.
  9. heech


    I'm continually impressed by how patient people are with you.

    Options are counted in terms of number of contracts. Each equity option contract is equivalent 100 shares of the underlying stock.
  10. This is exactly what I mean, ok I maybe expressed myself not clearly.
    I meant:
    1 contract = 100 options representing 100 shares of the underlying
    And commissions for options are usually quoted on a per contract basis, not on a per option or share basis. That's the whole point in the thread so far...
    #10     Dec 26, 2009