What % of your P&L is going to commissions?

Bekim said:
I was wondering for those that trade 4 legged spreads on equity options, what percentage of your P&L is going to commissions. For me its about 20%, thanks
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When I was first learning, my commissions were approximately equal to my profits before commission. I've shaved those down to a tiny fraction of what they once were, so as I've scaled, they've dropped to almost insignificant. This amounted to a 18-19% tailwind just by cutting my commissions. I pay more on bad fills and mistakes (firing a limit order on the ask, to buy, when I mean to hit the bid, for example) than I do in commissions.

Especially when you're 12.50 + 0.15, that wouldn't make sense unless you were big volume. 24 contracts is where I would break-even on that vs. IB, and if you use not tier pricing--if you were trading that much volume and taking fills on non-marketable orders, I doubt you could get to that 12.50+0.15 with IB. Overall I pay very little in commissions, and the majority of my commissions come from marketable orders when I'm taking profits on ITM contracts. When I'm opening or stopping on OTM contracts, I'm something like 0.25 per contract (tough to be precise because I haven't crunched the numbers this way because the commissions are so insignificant now overall).

It's easier for me to count commissions as a percentage of my account than my P&L though. Sitting around 1.6% annualized right now (in a very active account).
 
I’m usually trading 100 contracts or more so this commission seems to be good compared to most others I have seen, except for flat $40 a month. That almost sounds too good to be true. But I hope it is true
 
Robert Morse said:
Choosing your trade size to reduce your per options commissions rate is just silly. You should size your trade based on your risk tolerance, size of your account and expectation of profit. If the commission is an issue, your expectation of profit is not high enough.
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Or you could have too little capital to devote to trading, but I get the impression that Bekim is profitable but wants to reduce his transaction costs. If so there are really so many ways about it.

I believe the most important part is learning where every dollar flows in and out of your trading account, when you get a clear view of where all the money goes it should become obvious what needs to be improved. Maybe moving to another country to lower taxes or switching brokers to reduce transaction fees.
 
Bekim said:
I was wondering for those that trade 4 legged spreads on equity options, what percentage of your P&L is going to commissions. For me its about 20%, thanks
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I feel I was paying too much when my broker, Choicetrade, was charging me $5 plus .15/contract plus reg. & exchange fees of about 8 or 9 cents/contract. Now they've offered an alternative of $10/trade for unlimited contracts plus fees. Unfortunately, their platform doesn't handle double diagonals, which I often use, giving me, in effect, a flat $20/trade plus fees. I also don't like the risk that comes from the small delay between trading my put and call spreads and not being sure of what the final cost will be. Because I'm only looking for 5 - 15% profit/trade, my cost comes to between 20 and 40% of my profit, requiring a high % of successful trades to make money. Of course, a low profit target makes that a lot easier. That $40/mo. flat fee looks interesting: it's what I pay on a single round trip. Also: does anyone have any experience with Robinhood Trading?
 
For long-term breakeven strategy the % of commisions are really marginal.
Will vary but for 2017 it was: ~ 1.45%
2018 for now: ~ 1.19%
It's more like investing at that pace.
 
My annual paid commissions/fees: 0.24%.
With slippage my annual real cost of trading is < 2%.
 
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