any brokers with free assignment/exercise?

[bjw]

interactive brokers doesn't charge for exercising or being assigned from options. it seems most brokers out there do charge a fee though, and often quite a lot. are there any other brokers which also offer this for free? thanks everyone.

 

[1245]

Quote from bjw:

interactive brokers doesn't charge for exercising or being assigned from options. it seems most brokers out there do charge a fee though, and often quite a lot. are there any other brokers which also offer this for free? thanks everyone.

This is actually quite rare. The OCC charge the broker $1 per strike.

 

[bjw]

thanks i did not know that.

1$ seems reasonable though, most brokers i looked at charge $20 and over which i think is excessive.

 

[1245]

Quote from bjw:

thanks i did not know that.

1$ seems reasonable though, most brokers i looked at charge $20 and over which i think is excessive.

"Exercise Fee — per line item on exercise notice $1.00"

http://www.optionsclearing.com/membership/schedule-of-fees/

Most broker also look to make money on Exercise Fees. Some charge like it was a stock transaction. If you exercise or get assigned 1000 shares, they charge you your commission rate for stock trades. It's all part of the price package you get. Every broker is different.

 

[FSU]

Quote from 1245:

"Exercise Fee — per line item on exercise notice $1.00"

http://www.optionsclearing.com/membership/schedule-of-fees/

Most broker also look to make money on Exercise Fees. Some charge like it was a stock transaction. If you exercise or get assigned 1000 shares, they charge you your commission rate for stock trades. It's all part of the price package you get. Every broker is different.

So if you exercise 1000 contracts of one strike, the OCC will only charge $1.

 

[1245]

Quote from FSU:

So if you exercise 1000 contracts of one strike, the OCC will only charge $1.

Yes I know, that is what the OCC charges the Broker. The broker can charge whatever they want. What I'm saying is that 10 contacts buys you 1000 shares. Some brokers charge for the 1000 shares like you did a stock trade. If you pay .0050 per share they will charge you $5.00. 100 options, 10,000 shares, they will charge you $50.00. 1 contact, 100 shares and they charge you $0.50.

What is more common is a fixed charge per line then the broker knows they will make money. I'm just saying broker can do both. Charge a line fee or charge for the stock you end up with.

 

[bjw]

Quote from 1245:

Yes I know, that is what the OCC charges the Broker. The broker can charge whatever they want. What I'm saying is that 10 contacts buys you 1000 shares. Some brokers charge for the 1000 shares like you did a stock trade. If you pay .0050 per share they will charge you $5.00. 100 options, 10,000 shares, they will charge you $50.00. 1 contact, 100 shares and they charge you $0.50.

What is more common is a fixed charge per line then the broker knows they will make money. I'm just saying broker can do both. Charge a line fee or charge for the stock you end up with.

do you perhaps have any examples of brokers that charge like a normal stock trade? that still sounds like a much better deal then the ones i looked at.

 

[1245]

Quote from bjw:

do you perhaps have any examples of brokers that charge like a normal stock trade? that still sounds like a much better deal then the ones i looked at.

It would depend upon the correspondent you go though, but Apex charges this way. So you need to find a broker that clears Apex. It does not mean they will all bill that way. They can do whatever they want.

How often are you ITM at expiration or early exercise? What is an average position size that this make a material difference that it is worth changing brokers?