What is a viable commission structure in your option?

[boyan]

Hi everyone,

I read how a lot of you focus on modest trading with discipline and repeat success. In order to do that I wonder what you consider a viable commission structure in order to achieve this? In modest options trading the total payout isn't large so the key element left to consider is how much of that profit goes to the house.

I'm with TD and I consider the amount of money going to the house ridiculous - hence they aren't a viable house. Consider a simple spread (buy call; write call); regular options (not weekly hence 100 contracts). 9.99+(0.75*100*2)=159.99 to open and then another 160 to close. Total 320 for the position.

In this case the most of the money I make goes to the house.

Is the answer simply that retail trading is a joke? How big does one have to be in order to schmooze a sit at the table with the big boys then? If that really possible for small time players?

 

[stepandfetchit]

Please clarify your comment:

(not weekly hence 100 contracts)

 

[Robert Morse]

Hi everyone,

I read how a lot of you focus on modest trading with discipline and repeat success. In order to do that I wonder what you consider a viable commission structure in order to achieve this? In modest options trading the total payout isn't large so the key element left to consider is how much of that profit goes to the house.

I'm with TD and I consider the amount of money going to the house ridiculous - hence they aren't a viable house. Consider a simple spread (buy call; write call); regular options (not weekly hence 100 contracts). 9.99+(0.75*100*2)=159.99 to open and then another 160 to close. Total 320 for the position.

In this case the most of the money I make goes to the house.

Is the answer simply that retail trading is a joke? How big does one have to be in order to schmooze a sit at the table with the big boys then? If that really possible for small time players?

Check out our active trader rates: https://www.lightspeed.com/pricing/commission/

 

[turco_directo]

you will get the best commission with optionshouse, unless you are large trader.. then TOS will beat optionshouse.

 

[newwurldmn]

Hi everyone,

I read how a lot of you focus on modest trading with discipline and repeat success. In order to do that I wonder what you consider a viable commission structure in order to achieve this? In modest options trading the total payout isn't large so the key element left to consider is how much of that profit goes to the house.

I'm with TD and I consider the amount of money going to the house ridiculous - hence they aren't a viable house. Consider a simple spread (buy call; write call); regular options (not weekly hence 100 contracts). 9.99+(0.75*100*2)=159.99 to open and then another 160 to close. Total 320 for the position.

In this case the most of the money I make goes to the house.

Is the answer simply that retail trading is a joke? How big does one have to be in order to schmooze a sit at the table with the big boys then? If that really possible for small time players?

It's like a penny/share. Is your edge that tight?

 

[FSU]

You also have to consider what products you trade (index options, equities) and how you trade them (entering an order as a spread or as an individual order). Many firms (unlike TOS) will pass on exchange fees. So if you are trading SPX options or VIX options, add another .60 per contract to the commission price they are quoting. You also may pay taking liquidity fees if you take an offer or hit a bid, depending on what exchange this happens on it will add another .80 per contract.

 

[boyan]

Please clarify your comment:

Hi I mean that those are regular contracts and then smallest quantity is 100 contracts, unlike weeklys where one can buy less than 100; I believe weeklys you can get 10

 

[water7]

maybe you confused between:
standard options (1 options contract for 100 shares) and mini options (1 contract for 10 shares)

you can buy 1 options contract..

 

[turco_directo]

How about everybody writes down current commissions they get from the firms

I start;

TOS 65 cents per contract + No ticket charge ( old account )

Optionshouse 15 cents per contract + 8 $ ticket charge

 

[stepandfetchit]

Hi I mean that those are regular contracts and then smallest quantity is 100 contracts, unlike weeklys where one can buy less than 100; I believe weeklys you can get 10

One standard option contract has a multiplier of 100 for the underlying.
Seems you are confused on what an option is.
See comment from water7.

The commission you state is not bad at TOS if you are doing that size of SPX contracts! However, I suspect you are NOT doing that size and are off by a few orders of magnitude!
For typical income related option strategies, commissions around a penny a share ($1/contract if NO Ticket charge) is normal.