Option trade broker vs

Best Option Brokers. Choosing which broker to use when trading options is without doubt one of the single most important decisions you will ever need to make in your trading career. Using a good broker can save you money, increase your profitability, save you time, help you find trading opportunities, and it will generally improve your overall trading experience. The following is a list of the overall best online brokers that we recommend. If you are looking to sign up with a broker now, then we would advise that you take a look at any of the below online brokers. For advice on choosing an options broker, plus further recommendations in specific categories, please see read on. Competitive Commission Structure Easy to Use Platform for Traders Allows for a Fully Customizable Experience. Competitive Fees Interaction with a Community of Traders Educational Resources for Beginners. One of the Best For Trading Features Top of the Line Trading Platform Extensive Customization Available. You'll see from the above table that we provide reviews of the brokers that we recommend. For a list of all our reviews, plus information on exactly how we go about reviewing brokers, please visit this page. These reviews can help you make a decision about which of our recommendations is the right one for you. Despite the importance of choosing a broker carefully, many traders sign up with any old broker and simply join the first one they come across or the one that offers the best sign up incentive. Not putting any thought into what broker to use is a big mistake because, this really is a decision that is well worth spending some time on. If you are lucky enough to know an experienced trader that you trust then asking them which broker they use is a good way to find a decent broker, but that isn't a course of action that is available to everyone.

Alternatively, you could try out a range of different brokers, compare them, and decide which one is best for you. However, this would be pretty time consuming. We have produced this section specifically to help you choose a broker. As well as the list of our top rated online brokers above, we have also produced a number of other lists. Each one of these contains a number of recommended online brokers that are particularly suitable for a specific purpose. You can see each of the broker categories that we cover linked over to the right. We have also provided some brief details about each category further down this page. Full Service Brokers vs. Discount Brokers. The first page in our section on the best options brokers is a comparison between the two main types of brokers: full service brokers and discount brokers. The distinction between the two is quite important to understand, as the services offered by the two is substantially different. In very basic terms, a full service broker will provide clients with advice and guidance in addition to executing orders as instructed while a discount broker will simply carry out orders on behalf on their clients.

Both types have their advantages, and we explain more on the following page: Full Service Brokers vs Discount Brokers. Best Brokers For Beginner & Small Traders. When you first begin trading, the chances are that you will be starting out with a relatively small amount of capital, and indeed you may be planning to only ever make small trades. Beginners and those trading with a low budget should be looking for fairly specific attributes before signing up with a broker. An appropriate commission structure and low minimums for both the size of your deposits and value of your trades is essential. Any sign up incentives being offered could also be significant too. If you are a beginner when it comes to options trading we suggest taking a look at what we have found to be the best brokers for people just getting started. Best Brokers For Stock Options. As you probably know, contracts can be based on a variety of different underlying securities which give you many choices. Probably the most commonly traded are stock options those contracts where the underlying security are stocks in publically listed companies. It isn't particularly difficult to find brokers that are suitable for trading stock options, but it's still important to choose your broker wisely. If you are planning on trading mostly stock options, then please visit the following page for relevant recommendations.

These all do an excellent job when it comes to trading stock options. Best Brokers For Forex Options. Forex options are contracts where the underlying security is foreign currencies. These are also very commonly traded, so finding an broker where you can trade forex options is not too much of a challenge. However, there are certain brokers that particularly stand out and that we believe are worthy of our recommendation. It's very important to find a forex broker that can meet your needs. For a complete list of these recommended brokers and more details on what you should be looking for when deciding where to sign up, please visit the following page. Best Brokers For Binary Options. Binary options are a unique form of contract that work a little differently to most others (please see our page on Binary Options for more details) and they are ignored by many traders as they often perceived to be a bit more complicated than the more standard type of option. In fact, the basic principle of binary options is relatively straightforward and trading binary options is becoming increasingly more popular among traders. Not all brokers will deal with binary options, but for a list of recommended brokers that do please visit the following page. Best Brokers For OTC Options.

OTC options are those contracts that aren't listed on a public trading exchange but are instead traded over the counter. Those options tend to be highly customized contracts that have complicated terms that include many of the exotic options that exist. Because OTC options are not traded on the public exchanges they are not generally as accessible to the public and are more typically traded between large financial institutions. Many traders do like to trade OTC options though, in which case it's important to use a broker that is suitable for the purpose. Please visit the following page for recommended brokers in this category. Best Brokers For Active Traders. Traders that use active trading styles, such as the day trading style, typically make a large number of transactions on a daily basis. As such, one of the most important attributes that active traders need to look for when choosing a broker is a commission structure that is very competitive and ideally provides for a discount when making a lot of trades. However this isn't the only consideration that active traders need to take into account and choosing a broker purely based on the commissions charged is rarely a good idea. For more advice on this, along with recommendations of suitable services, please visit the following page. Best Brokers For Auto Trading.

An increasingly popular way to try and profit from options is by using auto trading services which basically involve a trader signing up with an organization that will find opportunities for trading and then automatically place the relevant orders with the traderЂ™s broker. There are a number of services around and although they aren't necessarily the ideal way to trade, they can potentially be profitable. One of the biggest problems facing traders that wish to use auto trading services is that not all brokers allow it. For a list of the top places that do, please visit the following page. Brokers with Best Trading Platforms. The quality of the trading platform is something that many traders overlook when choosing an online broker, but it really is something that is very important for anyone that is trading options. A decent platform should be well designed with a user-friendly interface as brokers that make it easy to place orders will generally enhance your overall trading experience. This isn't something that should be ignored if you are going to be spending any sustained length of time trading options each day. For a list of recommended brokers that meet these criteria, please visit the following page. Getting Acquainted With Options Trading. Many traders think of a position in stock options as a stock substitute that has a higher leverage and less required capital. After all, options can be used to bet on the direction of a stock's price, just like the stock itself. However, options have different characteristics than stocks, and there is a lot of terminology beginning option traders must learn. There's a common misconception that options are confusing and overly complex, but that simply isn't the case. Build on what you learn from this article and see how you can leverage options to build a more robust through taking Investopedia Academy's Options for Beginners course.

Two types of options are calls and puts. When you buy a call option, you have the right but not the obligation to purchase a stock at the strike price any time before the option expires. When you buy a put option, you have the right but not the obligation to sell a stock at the strike price any time before the expiration date. One important difference between stocks and options is that stocks give you a small piece of ownership in the company, while options are just contracts that give you the right to buy or sell the stock at a specific price by a specific date. It is important to remember that there are always two sides for every option transaction: a buyer and a seller. So, for every call or put option purchased, there is always someone else selling it. When individuals sell options, they effectively create a security that didn't exist before. This is known as writing an option and explains one of the main sources of options, since neither the associated company nor the options exchange issues options. When you write a call, you may be obligated to sell shares at the strike price any time before the expiration date. When you write a put, you may be obligated to buy shares at the strike price any time before expiration. Trading stocks can be compared to gambling in a casino, where you are betting against the house, so if all the customers have an incredible string of luck, they could all win. Trading options is more like betting on horses at the racetrack.

There they use parimutuel betting, whereby each person bets against all the other people there. The track simply takes a small cut for providing the facilities. So, trading options, like the horse track, is a zero-sum game. The option buyer's gain is the option seller's loss and vice versa: any payoff diagram for an option purchase must be the mirror image of the seller's payoff diagram. The price of an option is called its premium. The buyer of an option cannot lose more than the initial premium paid for the contract, no matter what happens to the underlying security. So, the risk to the buyer is never more than the amount paid for the option. The profit potential, on the other hand, is theoretically unlimited. In return for the premium received from the buyer, the seller of an option assumes the risk of having to deliver (if a call option) or taking delivery (if a put option) of the shares of the stock. Unless that option is covered by another option or a position in the underlying stock, the seller's loss can be open-ended, meaning the seller can lose much more than the original premium received. You should be aware that there are two basic styles of options: American and European. An American, or American-style, option can be exercised at any time between the date of purchase and the expiration date.

Most exchange-traded options are American style and all stock options are American style. A European, or European-style, option can only be exercised on the expiration date. Many index options are European style. When the strike price of a call option is above the current price of the stock, the call is out of the money when the strike price is below the stock's price it is in the money. Put options are the exact opposite, being out of the money when the strike price is below the stock price and in the money when the strike price is above the stock price. Note that options are not available at just any price. Stock options are generally traded with strike prices in intervals of $2.50 up to $30 and in intervals of $5 above that. Also, only strike prices within a reasonable range around the current stock price are generally traded. Far in - or out-of-the-money options might not be available. All stock options expire on a certain date, called the expiration date. For normal listed options, this can be up to nine months from the date the options are first listed for trading.

Longer-term option contracts, called LEAPS, are also available on many stocks, and these can have expiration dates up to three years from the listing date. Options officially expire on the Saturday following the third Friday of the expiration month. But, in practice, that means the option expires on the third Friday, since your broker is unlikely to be available on Saturday and all the exchanges are closed. The broker-to-broker settlements are actually done on Saturday. Unlike shares of stock, which have a three-day settlement period, options settle the next day. In order to settle on the expiration date (Saturday), you have to exercise or trade the option by the end of the day on Friday. Most option traders use options as part of a larger method based on a selection of stocks, but because trading options is very different from trading stocks, stock traders should take the time to understand the terminology and concepts of options before trading them. OptionTrade. OptionTrade are no longer trading. For a list of alternative brokers, and full comparison reviews, visit our brokers page. Alternatively, these are our Top 3 brokers based on Ratings: OptionTrade Archive Review. A binary options trading platform brand of HF Markets (Europe) Ltd, OptionTrade was set up in 2013 to provide traders of binary options with “…

a cutting-edge trading environment” and the opportunity to earn up to 85%. With the state of the Gen 2 SpotOption trading platform, OptionTrade is able to offer its clients unrivalled trading experience and a diverse range of contracts such as 60 Seconds Options, Classic Options, One Touch Options, Long Term Options, Pair Options and Ladder Options. What is truly unique about the Gen 2 SpotOption trading platform is the ability to trade using the time proven “Ladder” trading method with just a single click of the mouse. Previously, before the introduction of this feature, in order for a binary trader to execute this method, he had to make a separate individual trade for each price level. Now, this process has been simplified by SpotOption. With more than a hundred different assets spread across 20 different markets, OptionTrade truly offer their traders the opportunity to diversity their investments. The following list provides some indications of the extent of their market coverage: BRITISH AMERICAN T. JP MORGAN CHASE. LAS VEGAS SANDS. DOLLAR INDEX FUTURE. HANG SANG FUTURE. APPLE VS GOOGLE. BNP VS BARCLAYS.

CITIGROUP VS AIG. Apart from being licensed by the Cyprus Securities Exchange Commission () under license number 18312, OptionTrade is also registered with the following regulatory bodies across Europe: Authority for the Financial Markets (AFM – Netherlands) Autorité de Contrôle Prudential (ACP – France) Central Bank of the Czech Republic (CNB – Czech Republic) Comisión Nacional del Mercado de Valores (CNMV – Spain) Comissão do Mercado de Valores Mobiliários (CMVM – Portugal) Commissione Nazionale per le Società e la Borsa ( – Italy) Federal Financial Supervisory Authority (BaFin – Germany) Financial Conduct Authority ( - UK) Finansinspektionen (FI – Sweden) Finanstilsynet (Danish FSA – Denmark) Finantsinspektsioon (Estonia) Hungarian Financial Supervisory Authority (HFSA – Hungry) Národná Banka Slovenska (Slovakia) Polish Financial Supervision Authority (KNF – Poland) 100% Matching Bonus 3 Different Account Types Comprehensive Training Support Demo Account Provided Diverse Range of Assets Regulated Broker. Support only available 5 days a week. While OptionTrade has only been in existence for less than 2 years, they have taken considerable effort to ensure that their operation is legal not only in Cyprus but across multiple jurisdictions. Safe to say, prospective traders of OptionTrade need not worry about the legitimacy of this broker. If after testing out their obligation free demo you want to open a live trading account, OptionTrade only require a low minimum deposit of $100. Not only do they make it easy for a person to open a live trading account with them, they also make it easy to trade by setting their minimum trade requirement at $10. Customer Service Rating – 8. 245 Support Services Phone Support Available Trading platform translated into 17 languages. Minimum Deposit Rating – 9. Trading Features Rating – 10. Standard CallPut Binary Options One Touch Binary Options Long Term Binary Options Short Term Binary Options Ladder Options. The NASDAQ Options Trading Guide. Equity options today are hailed as one of the most successful financial products to be introduced in modern times. Options have proven to be superior and prudent investment tools offering you, the investor, flexibility, diversification and control in protecting your portfolio or in generating additional investment income.

We hope you'll find this to be a helpful guide for learning how to trade options. Understanding Options. Options are financial instruments that can be used effectively under almost every market condition and for almost every investment goal. Among a few of the many ways, options can help you: Protect your investments against a decline in market prices Increase your income on current or new investments Buy an equity at a lower price Benefit from an equity price’s rise or fall without owning the equity or selling it outright. Benefits of Trading Options: Orderly, Efficient and Liquid Markets. Standardized option contracts allow for orderly, efficient and liquid option markets. Options are an extremely versatile investment tool. Because of their unique riskreward structure, options can be used in many combinations with other option contracts andor other financial instruments to seek profits or protection. An equity option allows investors to fix the price for a specific period of time at which an investor can purchase or sell 100 shares of an equity for a premium (price), which is only a percentage of what one would pay to own the equity outright. This allows option investors to leverage their investment power while increasing their potential reward from an equity’s price movements. Limited Risk for Buyer.

Unlike other investments where the risks may have no boundaries, options trading offers a defined risk to buyers. An option buyer absolutely cannot lose more than the price of the option, the premium. Because the right to buy or sell the underlying security at a specific price expires on a given date, the option will expire worthless if the conditions for profitable exercise or sale of the option contract are not met by the expiration date. An uncovered option seller (sometimes referred to as the uncovered writer of an option), on the other hand, may face unlimited risk. This options trading guide provides an overview of characteristics of equity options and how these investments work in the following segments: Enter a company name or symbol below to view its options chain sheet: Edit Favorites. Enter up to 25 symbols separated by commas or spaces in the text box below. These symbols will be available during your session for use on applicable pages. Customize your NASDAQ. com experience. Select the background color of your choice: Select a default target page for your quote search: Please confirm your selection: You have selected to change your default setting for the Quote Search. This will now be your default target page unless you change your configuration again, or you delete your cookies. Are you sure you want to change your settings? Please disable your ad blocker (or update your settings to ensure that javascript and cookies are enabled), so that we can continue to provide you with the first-rate market news and data you've come to expect from us. Transparent Trading Fees. Making Every Dollar Count.

At Scottrade, we offer a valuable array of products and services to help you meet your financial goals, many of which are provided at no cost. Our trading fees and commissions are intentionally straightforward and clear, and we donЂ™t charge our clients fees for account maintenance or inactivity. 1 For stocks priced under $1, add Ѕ% of the principal value to the commissions shown. Commissions are charged on a per-order basis. Limit orders executed over multiple days and orders modified after partial execution on the same day are handled as separate orders for commission calculation purposes. A majority of orders must be executed online to qualify for online commission rates. Some foreign and pink sheet stocks must be traded with Investment Consultant (IC) assistance. Every market has its own fees andor taxes assessed by local governments and exchanges. These fees may be automatically included in the quote. 3 For clients who do not wish to trade online, Scottrade has branch offices staffed with Investment Consultants to assist you over the phone or in person. Our non-online commissions for stock and ETF orders are just two cents per share in addition to the broker-assisted and touchtone rates. Broker-assisted commissions apply for all other transactions (including stocks priced under $1). Mailed confirmations and statements are free of charge. Detailed information on our fees can be found in the Explanation of Fees (PDF).

4 Options involve risk and are not suitable for all investors. Detailed information on our policies and the risks associated with options can be found in the Scottrade Options Application and Agreement, Brokerage Account Agreement, and by downloading the Characteristics and Risks of Standardized Options and Supplements from The Options Clearing Corporation, or by requesting a copy from a Scottrade branch office. Supporting documentation for any claims will be supplied upon request. Keep in mind profit will be reduced or loss worsened, as applicable, by the deduction of commissions and fees. Detailed information on our fees can be found in the Explanation of Fees (PDF). 5 In addition to the commissions above, all no-load shares purchased from Scottrade and held 90 days or less will be charged a short-term redemption fee. Exceptions to this short-term redemption fee are the Rydex, Guggenheim, ProFunds and Direxion families of funds, which are intended for short-term traders. Detailed information on our fees can be found in the Explanation of Fees (PDF). Mutual fund purchase orders must be the greater of $100 or the fund's minimum initial investment. Prior to placing the trade, you must have sufficient settled funds in the account to meet both the applicable minimum and cover transaction fees and other fees prior to placing the trade.

Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. Mutual funds are subject to market fluctuation including the potential for loss of principal. A prospectus contains this and other information about the fund and may be ordered through Scottrade. com or through a Scottrade ® branch office. The prospectus should be read carefully before investing. Mutual funds are subject to the terms and conditions of the NTF program. Scottrade is compensated by the funds participating in this program through record keeping, shareholder or SEC Rule 12b-1 fees. No Fee refers to Scottrade ® transaction fees. See the fundЂ™s prospectus for other fees and expenses that apply to a continued investment in the fund. With regard to no-load funds that are not in the NTF program, Systematic PurchaseRedemptions will be charged $2 per occurrence.

*When Scottrade acts as principal, bonds are subject to a markup or markdown. Detailed information on our fees can be found in the Explanation of Fees (PDF). Equities* $0.000119 per share sold. Options $0.002 per contract sold. *with a maximum charge of $5.95 per trade of 50,000 shares or more. Professional (Real-Time Streaming) $121 at activation. $121 per month following activation. Canadian Investment Fee 13. 9 A $2,500 minimum equity balance must remain in the account otherwise the $75 full transfer fee will apply. 11 A regulatory transaction fee that is assessed by Scottrade for certain FINRA regulatory costs on stock and option sell trades. All calculations of this fee are truncated to the penny (i. e. $0.01 increments). If your confirmation indicates that an average price was received, the fee amount shown is determined by first calculating the fee, then summing all those fees together and truncating to the penny. In certain cases this fee is capped at a maximum rate. 12 Monthly fee following initial activation.

Designated Professional Subscribers requesting real-time streaming quote data will be assessed a recurring monthly charge in the stated amount per user, per professional account. Monthly subscription Streaming Market Data Services (Professional Quote) fees will be automatically deducted from your Scottrade ® account on the first business day of each month following activation, and each designated user, per professional account will pay for usageservices for that month. Activation fees associated with this data also apply, will be charged to you in full during the month you begin receiving the data, without proration, and will equal the amount of the monthly fee. You remain responsible for satisfying any obligations owed to Scottrade for Streaming Market Data Services, and any other fees associated with your account. 13 In addition to your Scottrade commission, brokerage fees of $.0005 - $.0075 per share may either be included in the currency conversion to U. S. dollars by the executing broker-dealer, or may execute on a net basis which means that the executing broker-dealer would purchase the security for its own account in the foreign country in the foreign currency and then sell the security to execute your order at a higher price that includes the cost of currency conversion, fees, taxes, etc. In either case, the total fees will be included in the execution price displayed on the trade confirmation. Detailed information on our fees can be found in the Explanation of Fees (PDF). Branch Appointments Online Educational Resources Portfolio Review Services Retirement & Financial Calculators Real-Time Streaming Quotes & Charts (for non-professionals) Processing fees assessed by third parties may be passed through to your account. Some products and services may require additional fees or transaction minimums not specifically listed here. Prior to placing the trade, it is the client's responsibility to ask the broker if any additional fees will apply. Scottrade receives compensation for certain equity and option orders as described at Scottrade.

comrouting. Call Us At 800.619.7283 Email Customer Support Log In and Trade Local Branches. Online Brokerage quick links. Online Trading quick links. Investment Products quick links. Contact Us quick links. Follow Us quick links. Call Us At 800.619.7283 Email Customer Support Log In and Trade 500+ Local Branches. Online Brokerage quick links. Online Trading quick links. Investment Products quick links. Contact Us quick links.

Follow Us quick links. Not a recommendation. Any specific securities, or types of securities, used as examples are for demonstration purposes only. None of the information provided should be considered a recommendation or solicitation to invest in, or liquidate, a particular security or type of security or account. Authorized account login and access indicates customerЂ™s consent to the Brokerage Account Agreement. Such consent is effective at all times when using this site. Unauthorized access is prohibited. Scottrade, Inc. and Scottrade Investment Management, Inc. are separate entities but are affiliated subsidiaries of TD Ameritrade Holding Corporation. Scottrade Bank has merged into TD Bank, N. A. As a result of the merger, Scottrade Bank has become a trade name of TD Bank, N. A. or its affiliates. Deposit products and services offered by TD Bank, N. A. and TD Bank USA, N. A., Members FDIC.

TD Bank, N. A. and TD Bank USA, N. A. and TD Ameritrade are affiliated through their parent companies. Brokerage products and services offered by Scottrade, Inc. - Member FINRA and SIPC. Brokerage products are not insured by the FDIC Ђ” are not deposits or other obligations of the Bank and are not guaranteed by the Bank Ђ” are subject to investment risks, including possible loss of the principal invested. All investing involves risk. The value of your investment may fluctuate over time, and you may gain or lose money. Online market and limit stock trades are just $6.95 for stocks priced $1 and above. Additional charges may apply for stocks priced under $1, mutual fund and option transactions. Detailed information on our fees can be found in the Explanation of Fees (PDF). Scottrade does not charge setup, inactivity or annual maintenance fees.

Applicable transaction fees still apply. Scottrade does not provide tax advice. The material provided is for informational purposes only. Please consult your tax or legal advisor for questions concerning your personal tax or financial situation. Investors should consider the investment objectives, charges, expense, and unique risk profile of an exchange-traded fund (ETF) before investing. A prospectus contains this and other information about the fund and may be obtained online or by contacting Scottrade. The prospectus should be read carefully before investing. Leveraged and inverse ETFs may not be suitable for all investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies. These fundsЂ™ performance will likely be significantly different than their benchmark over periods of more than one day, and their performance over time may in fact trend opposite of their benchmark. Investors should monitor these holdings, consistent with their strategies, as frequently as daily.

Investors should consider the investment objectives, risks, charges and expenses of a mutual fund before investing. A prospectus contains this and other information about the fund and may be obtained online or by contacting Scottrade. The prospectus should be read carefully before investing. No-transaction-fee (NTF) funds are subject to the terms and conditions of the NTF funds program. Scottrade is compensated by the funds participating in the NTF program through recordkeeping, shareholder or SEC 12b-1 fees. Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. The Margin Disclosure Statement and Agreement (PDF) is available for download, or it is available at one of our branch offices. It contains information on our lending policies, interest charges, and the risks associated with margin accounts. Market volatility, volume and system availability may impact account access and trade execution. Hyperlinks to third-party websites contain information that may be of interest or use to the reader. Third-party websites, research and tools are from sources deemed reliable. Scottrade does not guarantee accuracy or completeness of the information and makes no assurances with respect to results to be obtained from their use.

Brokerage Reviews: TradeStation Vs. Interactive Brokers. These are among the most sophisticated brokers in the industry in terms of investment offerings, market access and technology. However, these brokers are not for beginner traders – they are for the Big Boys in trading, the sophisticated traders. In this article, we compare TradeStation to Interactive Brokers, based on some key metrics, such as margin rates, pricing and fees, investment product offerings and market access, trading platform technology, market data and research. (For additional reading, refer to Beginner's Guide To Tradestation Trading Software: Getting Started and How To Start Trading: Trading Technology ). TradeStation Margin Rates. $1,500,000 - $3, 499,999. Data Source: Tradestation. com and Interactivebrokers. com. TradeStation’s margin rates are in line with the industry average. Meanwhile, Interactive Brokers’ (IB) margin rates are among the lowest in the industry, and encourage active trading in futures and short selling. IB offers significant value to active traders who can meet the requirements. Stocks, ETFs and Options: With TradeStation, both equities (stocks and ETFs) and option trades have a similar pricing scheme.

Traders have the option to be charged a flat-fee or per-share commission (for equities) and per-contract commission (for options). The per-contract or per-share commission is fixed at $1.00 per option contract or $0.01 per stock or ETF share. Typically, one equity option contract is based on the underlying of 100 shares of stocks or ETF shares, and 100 shares will trade for $1.00, based on the per-share commission. The per-contract price has no base fee and a minimum requirement of one contract that is equivalent to $1.00. Meanwhile, flat-fee commission is tiered, and thus ranges from a base rate of $9.99 plus $0.70 per contract for 1 to 9 trades per month, down to a base rate of $4.99 plus $0.20 per contract for 200 and more trades per month. We note that the base or per-trade rate on the flat-fee pricing structure applies to both option contract and equity (stocks and ETFs) trades. The per-contract commission on flat-fee pricing applies only to option trades. As shown in the table below, the more frequent or active traders trade per month, the lower per-trade commission they pay. Further, for the first 1,000 shares per trade on the per-trade pricing scheme will be direct-routed for free, waiving off the $0.004 direct routing fee. (For additional reading, refer to How can I prevent commissions and fees from eating up my trading profits? ). TradeStation Option Flat-Fee Commission.

Base Rate or Per Trade Rate. 1 - 9 Tradesmonth Contracts. $0.70 per contract. 10 - 29 Tradesmonth Contracts. $0.50 per contract. 30 - 99 Tradesmonth Contracts. $0.40 per contract. 100 - 199 Tradesmonth Contracts. $0.30 per contract. 200+ Tradesmonth Contracts. $0.20 per contract.

Data Source: Tradestation. com. Unbundled pricing is a third pricing scheme for stocks and ETFs that results in major savings for institutional or volume traders, who can direct their clearing to a particular exchange, and impacts the liquidity of the chosen exchange. According to TradeStation, “Commission based on Unbundled Pricing may result in rates as low as $0.002 per trade”. Futures Trade Commission. TradeStation Futures Commission. 1 – 300 Contracts. 301 – 1,000 Contracts. 1,001 – 10,000 Contracts. 10,001 – 20,000 Contracts. Data Source: Tradestation. com. Other fees, such as exchange execution and clearing fees by markets, apply to TradeStation futures trading, depending on the exchange membership level of the trader (e. g. on treasuries, non-members pay $0.65 and proprietary traders pay $0.30) on the CBOT.

Forex currencies: Trade forex currencies on TradeStation commission free because it makes its money on the tight spreads on currency trades. Active traders and institutional clients get even better execution, liquidity and spreads, with spreads as low as 1 pip (e. g. spreads move from 1.6 pip for EURUSD for retail pricing, down to 1.0 pip for EURUSD for active trader pricing). RadarScreen is free of charge for forex-only accounts and does not incur $99.95 account service fees. Bonds and mutual funds: Bonds trade for a base rate of $14.95 per trade plus $5.00 per bond and T-bills trade for a flat rate of $50 per trade. Mutual funds trade for a base rate of $14.95 per trade plus any fund-specific fee that may apply. TradeStation may charge a monthly account service fee of $99.95 if traders do not maintain a certain minimum trading volume in the preceding month (such as 50 equities and ETF option contracts, 5,000 stocks or ETF shares or 10 round-turn futures or futures options contracts or 50 round-turns of single stock futures) or an account balance of $100,000 at the end of the prior month (except forex-only accounts). The first 10 option contract cancelations are free of charge so long as the total cancelations do not exceed the number of orders for the day on the per-contract commission pricing. The per-share pricing has no cancelation fees. Interactive Brokers , also referred to as “IB” : IB mainly works with two pricing schemes: fixed commission plan and tiered commission plan. The fixed plan is a flat rate for each transaction (e. g. per trade or per contract) and is inclusive (e. g. VAT, exchange and regulatory fees are included). Not all fees are included in the fixed rate commission, rather some (e. g. transaction fees) are passed along to the trader. The tiered commission plan is a non-inclusive plan whereas exchange, regulatory and clearing fees, as well as VAT are “add-ons,” and is inversely related to the number of contracts or the volume traded (decreasing as the transaction value increases). Savings passed along to the traders include a share of the rebates from the exchanges.

(For additional reading, refer to Interactive Brokers: Commission, Fees And Customer Support ). Clearly, IB targets seasoned, well-funded active traders and trading institutions (such as hedge funds and proprietary trading firms). This is reflected in its high minimum account opening balance requirement (e. g. $10,000 in the US and most other markets, and an equivalent of $5,000 in India) and in its minimum monthly activity requirement of $10 in monthly commission. Failing to meet these requirements results in an activity fee equal to the difference between the $10 minimum and the actual commission attained. Stocks, ETFs and warrants: In North America, IB’s fixed commission is USD 0.005 per share in the US and CAD 0.01 per share in Canada, with a 1.00 local dollar minimum and a maximum of 0.5% of the trade value in Mexico, the fixed rate is 0.1% of the trade value, with MXN 60 per share minimum and no maximum. In Europe, the fixed commission is usually 0.1% of the trade value for both euro - and US dollar-denominated investments, with EUR 4.00 per share minimum in a majority of markets (e. g. Austria, Germany, Belgium and France) and varying maximum commissions. Some exceptions apply, where fixed commission in the Nordic countries (Sweden and Norway) is 0.05% of the trade value and in the UK is the base rate of GBP 6.00 for up to GBP 50,000 in trade value, and for a transaction exceeding GBP 50,000, GBP 6.00 base rate applies to the first GBP 50,000 plus 0.05% of the incremental trade value over GBP 50,000. In Asia Pacific (Japan, Australia, Singapore and Hong Kong), the fixed commission is 0.08% of the trade value with varying minimums (e. g. AUD 6.00, NZD 8.00, SGD 2.50, JPY 80.00 and HKD 18.00 for stocks, HKD 10.00 for warrants and structured products, and CNH 15.00 for Shanghai-Hong Kong connected stocks), with no maximum. Tiered commission, as explained before, drops as the trade value (or shares) increases unlike the fixed rate, both rebates and fees from the exchanges are passed along to traders. The tiered commission, based on the number of traded shares per month, ranges from USD 0.0035, down to USD 0.0005 in the US, and from CAD 0.008, down to USD 0.003 in Canada, with a maximum commission of 0.5% of the trade value plus applicable clearing and transaction fees. The tiered pricing is illustrated in the table below. Interactive Brokers Tiered Commission in US and Canada. Monthly Stock Volume.

US Stocks, ETFs and Warrants. 300,001 – 3,000,000 Shares. 3,000,001 – 20,000,000 Shares. 20,000,001 – 100,000,000 Shares. Data Source: Interactivebrokers. com. In Europe, the tiered commission is based on the currency (EUR, SEK, NOK and GBP) value traded per month (not the number of shares), with the following minimum commissions: EUR 1.25, CHF 1.50 and USD 1.70, and the following maximum commissions: EUR 29.00, CHF 49.00 and USD 39.00 for the respective currency-denominated investments. The UK and Nordic countries (Sweden and Norway) have minimum commissions of GBP 1.00 and SEKNOK 10.00, and no maximum commissions. The tiered commission structure in Europe is illustrated in the table below. Interactive Brokers' Tiered Commission in Europe. Europe EUR, CHF and USD-Denominated Investments. UK GBP-Denominated Investments.

Nordic Countries NOK and SEK - Denominated Investments. Value (EUR) traded per month. Value (GBP) traded per month. Value (NOK & SEK) traded per month. Data Source: Interactivebrokers. com. Options: In the US, all "direct routed" option orders trade at a fixed commission of USD 1.00 per contract and “smart routed” option orders are charged a tiered commission, based on the number of contracts per month and their option premiums, whereas in Canada, all options trade (only) at the flat or fixed commission of CAD 1.50 per contract. The minimum commission charged for trading any option on IB is USD 1.00 per order in the US and CAD 1.50 per order in Canada. The table below illustrates the tiered commission structure for options in the US. IB U. S. Tiered Commission on Smart Routed Option Orders per month. Data Source: Interactivebrokers.

com. Futures and Futures Options: IB charges both fixed rate and tiered (per trade) commission for its futures and futures on options. In the US market, the (all inclusive) fixed rate commissions are $0.85 for futures and futures options, $0.50 for Globex e-mini FX futures and $0.15 for Globex e-micro FX futures per transaction. In the non-US markets, the fixed rates are priced either as a flat rate per transaction (e. g. CAD 2.40 per transaction in Canada), or as percentage of the transaction (e. g. 0.05% of Swedish stock futures orders or 0.01% of Indian futures orders). The table below is an example of the tiered commission in the US and few other major markets. Currency Forex: IB charges tiered spreads on forex trades, ranging from 0.20 bps, down to 0.08 bps of the face value, as shown in the table below. Principal Amounts Traded per Month in USD. Commissions = Basis Points, bps * Trade Value. Minimum Commission per Transaction. Data Source: Interactivebrokers. com. Currency Margin: The requirements range from a low 2.5% (leveraged 40 to 1) for very liquid and stable currencies such as USD, GBP and CAD to a high 20% (leveraged 5 to 1) for volatile currencies such as the Russian rubble (RUB). Bonds: Corporate bonds and municipal bonds (munis) trade in the US at the tiered commission rate of 10 bps or 0.10% of the face value of USD 10,000 (or less) and at the rate of 2.5 bps of the face value of more than USD 10,000 in principal. Treasuries transact at the tiered rate of 2.5 bps of the face value of USD 1 million (or less) in principal and at the rate of 0.5 bps of the face value of more than USD 1 million.

The minimum commission for all bond trades is USD 5.00. We recommend that traders familiarize themselves with IB’s website for bond commissions in foreign currencies (e. g. HKD and EUR). Metal Commodities (gold and silver): They trade on fixed commission rates of 0.15 bps of the monthly value, with $2.00 minimum per transaction. The annual storage cost of physical assets is 10 bps. Contract for Difference (CFD): The non-index IB CFDs trade at the tiered rate, whereas the US tiered commission rate ranges from $0.0050 (with $1.00 minimum) for a monthly volume of $300,000 (or less), down to $0.0030 (with $0.65 minimum) for a monthly volume of more than $100 million. Meanwhile, the US and North American IB Index CFD contracts trade at fixed rates as follows: the US500 index is priced at 0.005% of the value per trade, the US30 index is priced at 0.005% of the value per trade and the US Tech 500 index is priced at 0.010% of the value per trade, all with a minimum commission of $1.00 per transaction. It is recommended that traders familiarize themselves with IB’s website for CFD commissions in foreign currencies (e. g. JPY and EUR). (For related reading, refer to An Introduction To CFDs ). Mutual Funds: IB trades no-load mutual funds in the US only at the fixed flat rate of $14.95 per trade (no tiered pricing in the US), with an initial minimum of $3,000. The European funds trade both at the fixed rate and at the tiered commission rate. The fixed rate is 0.10% of the monthly trade value, with a EUR 4.00 minimum and EUR 29.00 maximum commission per transaction.

The tiered commission rate, only applicable to European funds, ranges from 0.080% for a monthly value of EUR 1 million (or less), down to 0.015% for a monthly value of more than EUR 500 million, with EUR 1.25 minimum and EUR 29.00 maximum commission per transaction. (For related reading, refer to What's the difference between a load and no-load mutual fund? ). Broker-Assisted Trades (only in the US) are priced as follows: Stocks and ETFs at $0.01 per share with $100 minimum, options at $0.95 per contract with $95 minimum, and futures and options on futures at $3.00 per contract with $300 minimum. Interactive Brokers is ripe with many types of fees that traders need to be aware of (e. g. $500 trade bustadjustment fee with the CME Group), and thus it is highly recommended that readers visit its website to familiarize themselves with IB’s extensive fees and pricing structure both in US dollars and foreign currencies (e. g. CHF). Mastery of the fee structure can play to traders’ advantage. For instance, traders subscribed to the non-professional market data package who transact at least $30 in commission per month will have the $10 cost waived off, which is also waived off in the first three months for an account with a net balance of $100,000. Investment Products and Market Access. TradeStation: Trade all the primary investment products: equities (stocks and ETFs), options, futures, fixed income bonds, T-bills, currencies and mutual funds at multiple exchanges. For a spread, traders can transact CFDs on commodities without any commission, and trade OTC microchip and penny stocks via the OTCBB. Interactive Brokers: IB provides all the investment products that are available on TradeStation and some including indices, single stock futures, futures on options, structured products, forex currencies, CFDs, warrants, metals commodities, callable bullbear contract (CBBCS). One of the prominent features of Interactive Brokers is that it gives traders access to 100 market centers in 24 countries (e. g. the US, Canada, Mexico, Hong Kong, Singapore, Australia, the UK, France, Sweden and Japan) and a wide variety of tradable products. IB has one of the most versatile investment offerings among online brokerage firms. It has a marketplace where clients can access independent advisers for a fee.

Technology, Market Data and Research. TradeStation: It is recognized by in the industry for having some of the best tools and technologies traders can have at their disposal. Trade at home, office and on-the-go on desktops, laptops, smartphones, tablets and the web. It provides highly customizable trading platforms (TradeStation and OptionStation) that enable advanced charting, option and Greek calculators, quick trade bar and sophisticated order-entry tools that enable complex option positions. The platforms allow traders to set up macros and keyboard short-cuts and preferred windows. Portfolio Maestro is a tool used for method back-testing and portfolio optimization. RadarScreen is a sophisticated fee-based tool that scans the market for opportunities and ranks them to assist the trader, and thus is highly recommended. TradeStation Labs is a team of analysts that assists traders to master the platform and provides insightful research and analysis. Recognia is an advanced technical charting tool that analyzes tens of thousands of investment products (equities, futures and currencies) at exchanges across the globe to identify the patterns of emerging opportunities for traders. Interactive Brokers: IB also provides a very advanced platform and tools for sophisticated traders. Probability Labs and Option Calculator help option traders visualize the option mechanics and assist them in computing and analyzing option profit, Greeks and option probability distribution, including scenario analysis. Option Strategies Widget assists traders in the creation and testing of various option strategies.

Traders get access to research, news feeds and market data from both Interactive Brokers Information System "IBIS" (own research and news service provider) and other vendors for a fee. IB Risk Navigator is a free tool that aids traders in managing risk from a portfolio perspective. Volatility Lab assists traders in mapping out historical, forward-looking and implied volatility profiles and skews. The PortfolioAnalyst tool performs periodic analysis (including comparative analysis of the S&P 500) across the various asset classes in the account based on the portfolio structure and riskreturn characteristics. (For related reading, refer to Creating Automated Trading Systems Using Interactive Brokers: Automated Trading With Interactive Brokers ). Competitive Edge: TradeStation’s core competitive advantage lies in its advanced technologies and tools that it makes available on its trading platform that rivals the very best (e. g. TD Ameritrade’s Thinkorswim). (For related reading, refer to Beginner's Guide To Thinkorswim Trading Platform ). TradeStation’s platform is among the most versatile and customizable systems, based primarily on the TWS system. Meanwhile, Interactive Brokers’ competitiveness centers on access to about 100 international markets across 24 countries, and to a very diverse pool of investments products. IB’s ultra-low margin rates are very attractive to short sellers , futures traders and institutional groups (e. g. proprietary trading firms). A unique feature of IB is its investors’ marketplace that matches traders with various service providers (such as independent brokers and advisers, hedge funds, money managers, education and research providers, and others). Another key advantage of Interactive Brokers is that it is known for delivering value price improvement through its Smart-Router. Option traders can direct their smart-routed orders of non-marketable securities to an exchange that offers the best rebate or liquidity. Suitability: These brokers are neither ideal nor recommended for beginners who will most certainly find themselves dazed with these very advanced platforms that require a steep learning curve and the complex fee structure.

TradeStation is the best for sophisticated and institutional traders who can best use its advanced technologies, willing to pay for value-added tools and research, and can comprehend and effectively navigate its fees and pricing schemes to their advantage. Again, Interactive Brokers is most suitable for sophisticated traders who can pay for its tools and research (mostly provided by third parties), and can find value in paying for its various services, navigate its very complex fee structure to their advantage as well as can afford and find value in its services on the whole. Most importantly, IB is best suited for traders who value diversification of investment products and access to international markets. These brokerage firms target the same clientele (seasoned, well-funded and active traders) with few differences, and this is evidenced by their minimum monthly activity fees mentioned above. Day traders and institutional traders who can trade the necessary volume, have the skills to maximize the value of the tools and products from these brokers, and can minimize the average costs will benefit the most from these brokerage firms. Due to the complexity of the platforms and burdensome fees, these brokers may be detrimental to new and inexperienced traders, infrequent traders and those who are not well funded to take advantage of the pricing schemes. These brokers attract traders with the promise of advanced tools and greater access to markets and investment choices, including international exchanges, and not on the basis of simple and cheap pricing structure or attractive promotions. As both brokers are riddled with numerous and complex fees, traders should spend sufficient time to familiarize themselves. Interactive Brokers has an especially complex fee and pricing structure. Given the complexity of these fees, we recommend traders to visit each broker’s website and extensively study the pricing and fee structures.