OPTIONS FEES HAVE NOWHERE to go but up. U.S. options trades take place on seven major exchanges. Three of them -- The Chicago Board Options Exchange (CBOE.org, CBOE.com), International Securities Exchange (www.ise.com) and Boston Options Exchange (www.bostonoptions.com) -- have recently filed for fee increases that will kick in during 2010. These fee structures are quite complex, but will result in higher fees paid by brokerages to conduct trades.
Firms that have had relatively low fees for options trading will most likely have to raise their rates just to maintain some kind of profit margin. I imagine the firms that have charged higher commissions will just go ahead and absorb the increased exchange fees.
Wade Cooperman, CEO of tradeMonster (www.trademonster.com), says, "We are increasingly concerned the rising exchange fees will lead to retail investors seeing their cost of trading increase."
How much could they possibly raise them? I get the feeling that it will hardly be noticable for us over at interactive brokers.
ReplyDeleteI was checking out optionshouse fee structure and it looks really good if you are doing a certain amount of volume. They charge a $8.50 minimum and .15 a contract. Compared to IB that charges $0.70 per contract. At 15 contracts that would be $10.50 at IB and $10.75 at Options house. Once you get to the 16 contract it makes sense to use options house as every addition contract is only .15. So at 50 contracts that would cost you $35 at IB and only $16 at optionshouse. Something to think about if I/We ever get to that size. It also has an option for you to switch between commission rates depending on the size of your trade. They have an option if you are doing 5-10 contracts to get charged $1 per contract fee, without the $8.50 minimum.
Yeah it's probably a good idea to periodically run a scan on your trading volume and then see which broker might be best for you. I personally hate moving as its frustrating learning new platforms. I only make the change for the savings, but if it's significant enough you have to do it. I can't even imagine if I was still with Etrade paying $20 a trade. I can't understand how they can get away with that when Scottrade charges $7 and advertises just as much.
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