Option Commissions: Who is the best broker?

H

Hugo Askin

I just joined Elitetrader and was wondering if anyone had any advice on what broker I should use. I have been using TD Ameritrade and have been paying way too much in option commissions. I trade quite a bit - about 10,000 contracts a month. About 500 trades of 20 lots each month. A friend recommended IB but the rates are not much cheaper. This is what I have found:

500 trades of 20 contracts per month:

EOption: $3500
Lightspeed: $4650
Interactive Brokers: $7415
Etrade: $7475
Tradestation: $7500
TD Ameritrade: $10,975 (But I could get that down to about $7000 via negotiation)

I have included the OCC fee (.04-.05)

My buddy suggested that IB would be the cheapest. I believe he is wrong as they seem to be decent but nothing great wrt cost. Am I missing anything?

Also, any thoughts on EOption or Lightspeed? (or any other decent brokers with good rates?)

Does anyone know what brokers will negotiate rates? (IB??)
 
Hugo Askin said:
I just joined Elitetrader and was wondering if anyone had any advice on what broker I should use. I have been using TD Ameritrade and have been paying way too much in option commissions. I trade quite a bit - about 10,000 contracts a month. About 500 trades of 20 lots each month. A friend recommended IB but the rates are not much cheaper. This is what I have found:

500 trades of 20 contracts per month:

EOption: $3500
Lightspeed: $4650
Interactive Brokers: $7415
Etrade: $7475
Tradestation: $7500
TD Ameritrade: $10,975 (But I could get that down to about $7000 via negotiation)

I have included the OCC fee (.04-.05)

My buddy suggested that IB would be the cheapest. I believe he is wrong as they seem to be decent but nothing great wrt cost. Am I missing anything?

Also, any thoughts on EOption or Lightspeed? (or any other decent brokers with good rates?)

Does anyone know what brokers will negotiate rates? (IB??)
More...

If you have not spoken to another sales person at Lightspeed yet, e-mail me directly. I’ll see what i can do.
 
From your post, my "guess" is you are trading only equity options! Also, it seems you are NOT trading index options, else the exchange fees may greatly bias your results (as the exchange fees typically dwarf the commissions, unless embedded). Please clarify, you are NOT trading Futures options! -- That's a different animal.
 
I have been an eOption account holder for several years and I am happy with them. Their user interface is ok for buying and selling calls and puts. No bells and whistles, though. Just plain buying and selling. Can't beat the commissions.
 
10,000 contracts is break point at Interactive Brokers so more than that a month will drop your cost per contract from 70 to 50 cts for contracts >= 5 cts and down to 25 cts for those < 5 cts. It doesn't beat the first two but gets you in the ball park. You might also factor in free assignment and exercise if the others don't provide that as well.
 
As others have mentioned, the answer changes based on what products you trade, as some brokers do not include the extra exchange fees for the SPX and VIX which can be up to .62 cents extra. Others will give you the adding liquidity fees when you route to certain exchanges. So to give you the best answer, what are you trading, what type of orders do you send (spreads, limit, market, etc.)
 
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