eoption.com

[stevenpaul]

Hi folks,

Has anyone here had any experience with eoption.com? At $3 + $0.10 per contract they have by far the lowest commissions of any brokerage I have ever discovered. Does anyone know about these guys? How can they do it for so little, or are we all just being gouged by the many other brokerages out there?

Thanks for your feedback!

 

[def]

Quote from stevenpaul:

Hi folks,

Has anyone here had any experience with eoption.com? At $3 + $0.10 per contract they have by far the lowest commissions of any brokerage I have ever discovered. Does anyone know about these guys? How can they do it for so little, or are we all just being gouged by the many other brokerages out there?

Thanks for your feedback!

Your true cost of a trade is commission plus the price you pay or sell the option. Perhaps teh better question to ask is why are the firms below paying so much for the order flow?
http://www.eoption.com/order_routing.html
http://www.regalsecurities.com/pdf/2010_03_SEC Rule 606 Report.pdf

1 Regal Securities receives payment from Susquehanna Capital Group for certain types of option orders routed to them for
execution on the options exchange. Payments received during this quarter range from $0.00 to $0.65 per contract.
2 Regal Securities receives payment from Citadel Derivatives Group, LLC for certain types of option orders routed to them for
execution on the options exchange. Payments received during this quarter range from $0.00 to $0.75 per contract

 

[stevenpaul]

Thanks DEF for responding. I'm not totally sure I understand what you are saying. Are you suggesting the fills would be so bad with Eoption as to negate the savings on the commissions?

 

[def]

Quote from stevenpaul:

Thanks DEF for responding. I'm not totally sure I understand what you are saying. Are you suggesting the fills would be so bad with Eoption as to negate the savings on the commissions?

I don't have specific details on eoption but the 606 report clearly states that they are selling order flow to firms that would certainly be included in the TAG report showing IB's option routing providing better executions by 53 cents per contract than the industry.

http://www.interactivebrokers.com/en/general/education/comparebrokers.php?ib_entity=llc

 

[Option Trader]

It all depends on the type of trading you are doing; for certain types of trading these guys can save you a bundle. I like them.

 

[regalsecurities]

Quote from def:

Your true cost of a trade is commission plus the price you pay or sell the option. Perhaps teh better question to ask is why are the firms below paying so much for the order flow?
http://www.eoption.com/order_routing.html
http://www.regalsecurities.com/pdf/2010_03_SEC Rule 606 Report.pdf

1 Regal Securities receives payment from Susquehanna Capital Group for certain types of option orders routed to them for
execution on the options exchange. Payments received during this quarter range from $0.00 to $0.65 per contract.
2 Regal Securities receives payment from Citadel Derivatives Group, LLC for certain types of option orders routed to them for
execution on the options exchange. Payments received during this quarter range from $0.00 to $0.75 per contract

In evaluating whether or not to conduct business with an online broker, one should not equate the fact there is payment for order flow with the quality of the execution. If you were to investigate each firm’s Order Routing Disclosure, you will find that TD Ameritrade, Interactive Brokers, OptionsXpress, E-Trade, Trade Station, and Optionshouse all receive payment for option order flow.

 

[Peternam]

Quote from regalsecurities:

If you were to investigate each firm’s Order Routing Disclosure, you will find that
Interactive Brokers
receives payment for option order flow.

Is this true , Def ?

 

[def]

Quote from Peternam:

Is this true , Def ?

he is comparing apples to oranges. some options exchanges pay for providing orders to their exchange (it is mandatory for all orders) and thus there is payment for flow. IB takes this cost into account in determining where to route an order only if the price rec'd for the client is the best available. If you note our stats for Sep, options routing is fairly well distributed over 7 exchanges. If you look at the other firms, they route to 1 or 2 other market makers which are noted for internalizing their order flow. The TAG stats don't lie. The latest audit by the independent group TAG, show IB's option execution is 53 cents better per contract than the industry. Not only does it mean you'll get better fills but I also believe this gives you a better chance of getting filled.

 

[Option Trader]

Quote from def:

"The latest audit by the independent group TAG, show IB's option execution is 53 cents better per contract than the industry."

Isn't this because IB offers penny priced options and price improvement--which both impact the averages? Because I don't think Eoption would ever give you an inferior fill for the purpose of order flow payments?

 

[def]

Quote from Option Trader:

Isn't this because IB offers penny priced options and price improvement--which both impact the averages? Because I don't think Eoption would ever give you an inferior fill for the purpose of order flow payments?

But will they give you a better fill? Will they proactively manage your order to route from one exchange to another exchange? Nevertheless, I'd say penny priced options (which saves paying 5 cent spread and potential for price improvement as well as the potential to have your orders work amongst all the options exchanges will more than cover the fee differential).