Options Commissions

Quote from Algo_Design_Kid:

If you are not selling options does the higher initial account value still apply? It is just like Fx, the spread and commissions make all the difference in the long run. Sounds like IB options are most ideal.
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You can trade everything under your IB account. IB is not ideal for trading mutual funds which I don't care and almost no other traders care. Can you liquidate all your accounts (if you have) and transfer them to IB and have everything under one umbrella? If you can control yourself in trading, maybe you can have 10K in your account and only allocate less than 2K of it for trading. If you have only 2K in OX and trading options with 5 cents spread and that $15 one way commission, you should hit homeruns to be profitable.
By the way, even if you want to open an account with IB, read all the feedbacks to see anything that you dislike about IB. I believe IB will charge you inactivity fee if your monthly commission is less than $30 if your account is below 25k. If you are a semi active trader, that should not be a problem. Even if you pay inactivity fee, the money that you save would be more than $10.
You cannot login to your account from Friday midnight till Sunday 12PM. This was annoying the first few weeks that I opened my account with IB.
 
Quote from JJacksET4:

To say a few good things about OX:

1. You can contact them about getting active trader rates. The girl online basically told me I could get it and I asked if she was sure I qualifed and it kind of sounded like just ask and you get it. I think the rates are down a bit just from their normal rates.

You can ask any broker for a better rate. If you do the volume and they want to keep your business, they'll reduce your rate.


2. OX seems to have very good execution - it's possible that you would have made less on the trade with another broker, but of course, I can't prove that.

No broker can get you better prices than what's available in the marketplace. The difference is where they're routing to.


3. OX has no cancel fees that I know of like other brokers do.

That's because they're hammering you upfront on the commission. IB offsets cancel fees with credits from executions. If you are fairly decisive and you're getting fills, cancel fees are negligible to non existent.


For larger orders the difference isn't as bad (i.e. OX charging say $13 for 10 contracts (active rate I think) is comparable to $1/contract, etc. OX is not the cheapest by any means, but sometimes you get what you pay for.

The $1 per contract that you keep referring to is a minimum ticket charge. The commission per contract ranges from 25 - 70 cts per contract so your calculations are not comparable. And to repeat, free assingment and exercise.
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Overall, is IB better than OX? That's a personal conclusion based on the nature of your trading and what tools you need. If you're happy with OX, you shouldn't change brokers but by no means are they comparable commission wise.
 
Quote from ForexForex:

This is why MARKET orders should be considered. If your LIMIT order doesn't get filled it's because the stock is moving in YOUR direction, if it moves against you the order gets filled. Is trying to save a few pennies really worth it?

In your example maybe a MARKET order would have got filled at 1.9, which is better than chasing it down to 1.8 with LIMIT orders. IB's MARKET orders are filled at very good prices, I have never been disappointed.

Another big plus is that you get the trade over with and can do something else.
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That's ridiculous advice. The whole purpose of a limit order is not to pay more than you want to when buying or receive less than acceptable when selling.

Is trying to save a few pennies really worth it??? If you do any kind of volume, a mere 5 cts per contract will really add up at the end of the year.

And most absurd of all is "getting the trade over" and executing at an inferior price for convenience so that you can do something else.
 
Quote from hajimow:

In confirmation of what you said, I should add that there has been many cases that I have got better results in market order than limit order. In a case the bid/ ask was 0.1/15 and I put an order to sell at 0.12 so the bid/ask becamse 0.1/.12 but my order did not go through. I changed my order to market and my order was filled at 0.13 !!. The underlying had not moved. All things said, 90% of my orders are limit orders
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Did you ever consider the possibility that in the time it took you to cancel (or adjust) the first order and create the second order that someone showed up at 13 cts?
 
Quote from ForexForex:

This is why MARKET orders should be considered. If your LIMIT order doesn't get filled it's because the stock is moving in YOUR direction, if it moves against you the order gets filled. Is trying to save a few pennies really worth it?

In your example maybe a MARKET order would have got filled at 1.9, which is better than chasing it down to 1.8 with LIMIT orders. IB's MARKET orders are filled at very good prices, I have never been disappointed.

Another big plus is that you get the trade over with and can do something else.
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Quote from spindr0:

That's ridiculous advice. The whole purpose of a limit order is not to pay more than you want to when buying or receive less than acceptable when selling.

Is trying to save a few pennies really worth it??? If you do any kind of volume, a mere 5 cts per contract will really add up at the end of the year.

And most absurd of all is "getting the trade over" and executing at an inferior price for convenience so that you can do something else.
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  • How does a retail trader decide what is an acceptable price?
  • Why do you think a MARKET order will get filled at an inferior price as compared to a LIMIT order?
  • So how long should someone watch the "The Exchange Has Acknowledged Your Order" message when they try and get that 5 cent discount? If they made the right call on that trade it might not get filled, unless they modify the order and accept an inferior price, which could be worst than the original buy/sell quote.

PS ..... The above would be based on Interactive Brokers.
 
Quote from spindr0:

Did you ever consider the possibility that in the time it took you to cancel (or adjust) the first order and create the second order that someone showed up at 13 cts?
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I cannot prove it but I am 110% sure that it was not the case. The stock was flat for one hour and after I traded at 0.13 the bid/ask was still 0.1/0.15
 
Quote from ForexForex:

  • How does a retail trader decide what is an acceptable price?

    You should decide that
  • Why do you think a MARKET order will get filled at an inferior price as compared to a LIMIT order?

    Many market makers have software running we call an electronic eye. It looks for value in the middle quote. If you hit the bid or enter a market order, you will likely receive the quoted market. If you try in the middle 1st, you might get a better price
  • So how long should someone watch the "The Exchange Has Acknowledged Your Order" message when they try and get that 5 cent discount? If they made the right call on that trade it might not get filled, unless they modify the order and accept an inferior price, which could be worst than the original buy/sell quote.

Sorry, can't help with that, not familiar with the feature. I've been trading options for over 25 years, I've never entered a market order. I've put in limit orders through the bid/ask spread to sweep the prices, but away with a limit.

PS ..... The above would be based on Interactive Brokers.
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Hi, please ignore my very basic question, since I am new to this forum as well as Options market:

3- About cancellation fee, I agree that at first it was unacceptable for me but after a short while I got used to it. As I said that fee is about $10 a year for me. There are ways to avoid the fee. For example if I put an order to sell naked call for 2 and then the stock drops and I want to change my order to 1.8, I don;t cancel my first order. I just put a new order for 1.8 and sometimes because I don't have enough money for two orders, IB automatically cancels the $2 order without fee or I cancel myself after my 1.8 goes though and I have credit to cancelthe first order.

Can you please explain in detail, Why we need to cancel the order even if stock drops, let the order get filled?

Also, if for some reason I cancel the order, why IB charges the fees for cancellation, since it's not filled OR executed.

Thanks,
 
Quote from spindr0:

That's ridiculous advice. The whole purpose of a limit order is not to pay more than you want to when buying or receive less than acceptable when selling.

Is trying to save a few pennies really worth it??? If you do any kind of volume, a mere 5 cts per contract will really add up at the end of the year.

And most absurd of all is "getting the trade over" and executing at an inferior price for convenience so that you can do something else.
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in my experience, if you need/want to put on or alter a position, it will cost you money worrying about a few pennies. usually, something is moving in that direction for a reason and trying to squeeze a few cents when the goal is to make much more ends up being fruitless.

i'd rather give up a little edge and have the right position on rather than being stuck with a crappy or no position and saving a few cents.

just my .02
 
If you are a serious options trader... meaning that you trade every day.... hit me up ryandbaird@gmail.com I might be able to get you a cheaper commissions though my buddy....if it works great...if not no harm no foul

he helps me because I trade 20-150k contracts a day depending on market conditions....

I can't promise anything but I'm pretty sure he'll beat all the online retail rip offs out there...
 
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