TDA plans to add fees to option contracts?

I met with my Schwab representative today, and impressed on him that a) They should bring thinkorswim into Schwab and not delete or "mess it up", and b) that if they should do an exchange fee commission trick like TD I may not be able to trade options with them anymore. He said he would pass that feedback on the HQ. But it is very early in the merger process and they haven't started figuring out how to merge platfoms yet. BTW, he wondered why TD was charging so much for the exchange fees, as the real fee is something like .05 or .10. TD is marking it up as a profit center.

TD just lost one of my accounts, I put in a transfer to Schwab where I have a great commission rate with no exchange fees.
 
Not surprised. I will be contacting TDA next month requesting a commission reduction. I expect all brokers to pass along the index fees in the near future so not going to switch brokers. At 0.65 per contract, brokers profit exactly $0.00 per contract when SPX standard monthly options are filled at $1.00+ unless exchange fees are passed along.
 
Scott Slivnik said:
Not surprised. I will be contacting TDA next month requesting a commission reduction. I expect all brokers to pass along the index fees in the near future so not going to switch brokers. At 0.65 per contract, brokers profit exactly $0.00 per contract when SPX standard monthly options are filled at $1.00+ unless exchange fees are passed along.
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Please post any updates you discover. From what TDA updated me today... They will not be considering (Index option) commission reductions regardless of volume or account sizes! -- Last week they hinted that account size and volume may allow some reduction of the commission.
I am not eager to add another broker, but will keep my ears to the ground for an alternative broker for trading SPX.
 
You may want to look at Fidelity
The web platform is not the best but there are no index fees at this time just the 0.65 per option and about 4 pennies for what they call activity assessment fee so it will be between Schwab and TD after TD adds the index fees
 
status1 said:
You may want to look at Fidelity
The web platform is not the best but there are no index fees at this time just the 0.65 per option and about 4 pennies for what they call activity assessment fee so it will be between Schwab and TD after TD adds the index fees
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I wonder if they will be adding index fees in the near future?
 
Good question.
I guess it depends on what Schwab will do. Since TD will be part of Schwab I doubt they will try to compete with TD
They probably have to look at their finances and see how they are doing after eliminating the commission and see if they can afford it going forward
I will be the first one to know and I will let everyone else know if that happens
 
I forgot to mention that Fidelity has a pretty good interest rate on the unused cash in the account
They are using the SPAXX Fidelity government money market and it says the 7 day yield was 1.29 and EY of 1.93% on my latest statement

So that is pretty good and better than all the other brokerages combined
So any extra increase in index option fee is more than covered by the interest paid unless you have very little left after making the trade in which case you may be risking too much
 
I'v been using "BIL", the 1-3mo T-Bill ETF to function as my vehicle for this. Now the fee (commission) is 0 and no penalties or in/out time restrictions. The annualized rate can change, but is about 2%. "https://finance.yahoo.com/quote/bil/"
Easy to keep all but about $100 in it.
You have to trade in/out yourself, but with a margin account, can issue order to sell, then immediately use the funds for trading something else.

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I have made a note to report any updates. Both Fidelity and Charles Schwab likely do not have a high number of index option traders at the moment. I expect Charles Schwab to add the index fees next year after they absorb the active option traders that use Think Or Swim.

I am considering opening an account at Schwab to take advantage of the lower cost for as long as I can. Never used their platform though.

From a business perspective, TDA should refuse to negotiate lower exchange fees as they are not pocketing the money.

I view the CBOE as the problem as they set the high exchange fees. If SPX was traded on multiple exchanges, the exchange fees would drop like a rock.


garyw said:
Please post any updates you discover. From what TDA updated me today... They will not be considering (Index option) commission reductions regardless of volume or account sizes! -- Last week they hinted that account size and volume may allow some reduction of the commission.
I am not eager to add another broker, but will keep my ears to the ground for an alternative broker for trading SPX.
Click to expand...
 
status1 said:
Good question.
I guess it depends on what Schwab will do. Since TD will be part of Schwab I doubt they will try to compete with TD
They probably have to look at their finances and see how they are doing after eliminating the commission and see if they can afford it going forward
I will be the first one to know and I will let everyone else know if that happens
Click to expand...

I may give Fidelity a call and ask them if they plan to start passing along the exchange fees. Thanks for the info about the interest rate, too... I'll definitely ask them about that.
 
Another small savings I wanted to mention about Fidelity
When I close my spread they don't charge even the index fee on the short leg only the long leg
The short leg only has the activity assessment fee and nothing else so if you combine the entry and exit fees you actually save a few bucks over Schwab and TD
 
status1 said:
Another small savings I wanted to mention about Fidelity
When I close my spread they don't charge even the index fee on the short leg only the long leg
The short leg only has the activity assessment fee and nothing else so if you combine the entry and exit fees you actually save a few bucks over Schwab and TD
Click to expand...

TDA doesn't have a such "activity assessment fee," does it?
 
They don't have that fee but they all have some small fees and every brokerage is calling it something else and have different amounts
TDA has Reg fee = 0.12
Tastyworks has Tran fee =0.28
Schwab has Exch Process fee = 0.11
Etrade has Opt reg fee = 0.11
These are all for the same amount of option contracts
 
Just spoke with Schwab regarding commissions/fees. They charge 65cents total fees, but may negotiate that down some with large account size.
That 0.65 cents sounds great for SPX. (same as I currently get with TDA (for one more day)!
 
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