TDA plans to add fees to option contracts?

One needs to be trading 1000+ contracts per month consistently to get $0.50. There was hesitation on TDA's end so I believe I barely made the cut. High volume would be needed to get under $0.50.

Forgot to mention in my previous reply that data fees are one reason I would like to stick with TDA. I have a business (LLC) trading account so I would need to pay professional trader data fees at other brokers. I avoid this at TDA by logging into my personal TDA account (which has $1) and then jump to the LLC account. Doing is allows the LLC account to receive all data for free.

Joenors said:
$0.50 is the lowest TDA commission rate I've seen. Has anyone received less than $0.50 commission rate at TDA? I would like to know the lowest commission rate they're willing to offer so I know what to ask for.
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Scott Slivnik said:
One needs to be trading 1000+ contracts per month consistently to get $0.50. There was hesitation on TDA's end so I believe I barely made the cut. High volume would be needed to get under $0.50.

Forgot to mention in my previous reply that data fees are one reason I would like to stick with TDA. I have a business (LLC) trading account so I would need to pay professional trader data fees at other brokers. I avoid this at TDA by logging into my personal TDA account (which has $1) and then jump to the LLC account. Doing is allows the LLC account to receive all data for free.
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Last year I traded almost 2,000 contracts per month and they wouldn't go less than $.50. The person I know trades almost 3x the amount I do.
 
Interesting. I trade approx. 1200 contracts per month right now. I decided that sharing my volume would help the group. If someone is able to get $0.50 while trading under 1,000 contracts per month, please share.

RandyS said:
Last year I traded almost 2,000 contracts per month and they wouldn't go less than $.50. The person I know trades almost 3x the amount I do.
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WOW 1200 contracts ?
Just curious what underlying is used for this amount of contracts ?
Is this all SPX or something else ?

Also what strategy is used with this ?
Some kind of scalping/day trading ?

Even with reduced commissions I imagine the brokerage is making good money
 
M3 butterfly style trades in RUT.
Risk Reversals and Rolling Thunders in SPX.
Equity options when something catches my eye.

Between opening, adjustment, and closing trades, the number of contracts adds up fast.


status1 said:
WOW 1200 contracts ?
Just curious what underlying is used for this amount of contracts ?
Is this all SPX or something else ?

Also what strategy is used with this ?
Some kind of scalping/day trading ?

Even with reduced commissions I imagine the brokerage is making good money
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Interesting
So even with the long DTE the contracts per month add up ?
Actually after adding up all my trades at different brokerages I am up to about a third of that but I am doing weekly trades which doesn't seem like much but if I do 2-3 weeks in one month it all ads up so I can see how that would add up with all the adjustments it just seems like a lot when it's all in one account
 
status1 said:
Interesting
So even with the long DTE the contracts per month add up ?
Actually after adding up all my trades at different brokerages I am up to about a third of that but I am doing weekly trades which doesn't seem like much but if I do 2-3 weeks in one month it all ads up so I can see how that would add up with all the adjustments it just seems like a lot when it's all in one account
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Simple summary that I feel I can share.
SPX BWiFlies when the vix is over 15 and Calendars when it drops below 15 as a general rule. Mostly 14 to 30 days out. Adjust when it hits certain designated points. Has lots of family accounts so that really adds up. We were both at $.65 per contract before they added the Exchange Fees. That is why I was interested in moving to a different company. They dropped my commission from $.65 to $.50 but added another $.54 per contract back so increasing my costs by 60%. At first TDA told me they would not drop my commission at all so at that time my costs went up over 70%.
 
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With lots of family accounts it's more understandable that it would add up

Just out of curiosity, assuming they would not drop the commission would the trade still be profitable ?
 
RandyS said:
Has anyone looked at trading SPY instead of SPX. The commissions have changed to the point it looks like it could be really inexpensive to trade SPY.
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I don't think this is a viable alternative at least not without some changes to the placement of the strikes
While the SPY is about 10 time less it's not exactly 10 times so currently the SPX is at 3329.62 while SPY is at 331.75 so that is a difference of 12.12 SPX points
Another issue is that SPY does not always have 50 cent strikes so you would have to select a strike above or below that

Looking at an example of a 40/50 BWB for March monthly expiration let's say you select the 30 delta put for the short which is 3245 than looking at the SPY and doing the same the closes to 30 delta is the 323 strike not to mention that there is no 324.50 strike
Than assuming a 10 lot for SPX and 100 lot for SPY they both cost the same 50 cents or $500 debit and both have the same amount of risk which sounds ok at first but if you advance the time to 14 days before expiration you will see the SPX is around 2900 while the SPY is at 2100 so a difference of $800

Looking at the commissions and using the full price of spx and the fees for 80 contracts I come up with $105.6
For spy using just the exchange fees of 2 cents for 800 contracts I get $16 so a savings of $89.60 which is good except you made $800 less than if you had used SPX

So I don't see this as a direct replacement That would be penny wise and pound foolish
Of course you can modify the trade by coming in closer to ATM but than it's no longer the same as the SPX trade

On the other hand you can easily modify the SPX trade by adding a parking trade inside the tent toward the lower long just a 1 lot 10 wide would bring you $165 that would cover the cost of the commissions and it only increases the margin by 1K
Of course this assumes that there are no adjustments
 
status1 said:
Looking at the commissions and using the full price of spx and the fees for 80 contracts I come up with $105.6
For spy using just the exchange fees of 2 cents for 800 contracts I get $16 so a savings of $89.60 which is good except you made $800 less than if you had used SPX
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Looks like you forgot to add the 65 cents/contract commission for SPY. For 800 contracts, that amounts to $520. So it is always much more expensive to trade SPY than SPX.
 
That is correct
My mistake I was thinking of the index fees so I took them both off
In any case switching to SPY is not a viable option
 
status1 said:
With lots of family accounts it's more understandable that it would add up

Just out of curiosity, assuming they would not drop the commission would the trade still be profitable ?
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Absolutely but managing your costs is important to any business.
 
JackW said:
Looks like you forgot to add the 65 cents/contract commission for SPY. For 800 contracts, that amounts to $520. So it is always much more expensive to trade SPY than SPX.
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Some of the other brokers are offering a max commission of $60 per month on SPY so trading 100s of contracts of SPY would cost less than a 10x butterfly in SPX since I rarely let them go to expiration. I would only do the SPY in the IRA accounts because you lose the 1256 tax advantage if done in a Reg account.

Getting the greeks and strikes right in the SPY would be a challenge. I need to try setting some trades up in the analyzer and see what they look like. Thanks for help.
 
RandyS said:
. I would only do the SPY in the IRA accounts because you lose the 1256 tax advantage if done in a Reg account
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As far as I know there is no 1256 tax advantage for SPY it's only for SPX regardless of what the account type is
 
RandyS said:
Getting the greeks and strikes right in the SPY would be a challenge
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I think getting filled also may be a challenge which you may not know from the analyze tab until you actually place the trade getting filled on 100's of contracts I imagine it would be more difficult that a 10 lot BWB
You may also have to think about slippage on 100's of contracts
 
I would argue that spy execution will be way easier because it is 1 cents bid/ask. Not saying is it cheaper but easier.
 
status1 said:
As far as I know there is no 1256 tax advantage for SPY it's only for SPX regardless of what the account type is
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What I am saying in there is no difference in the retirement account but there is in reg account. Trading the SPY in the reg account forfiets the 1256
tax advantage.
 
No. What he is saying is that in retirement accounts you don't pay any gain taxes.
On reg account you have 1256 for SPX vs all short term rate (higher) for SPY
ergo you are paying more taxes for the same amount of gains if you trade SPY.

But

It still does not determinate that SPX is better. This depends on number of contracts that gets you to your gain. I did not calculate this but think it is possible to have situation where savings on commissions (when trading with broker who have a commission cap) are greater than loos of 1256 status.
 
Marcas said:
No. What he is saying is that in retirement accounts you don't pay any gain taxes.
On reg account you have 1256 for SPX vs all short term rate (higher) for SPY
ergo you are paying more taxes for the same amount of gains if you trade SPY.

But

It still does not determinate that SPX is better. This depends on number of contracts that gets you to your gain. I did not calculate this but think it is possible to have situation where savings on commissions (when trading with broker who have a commission cap) are greater than loos of 1256 status.
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Your explanation was better than mine about 1256 status.

Last year I spent over $15k in commissions at $.65 per contract. 90% of my trades were in the SPX. If I can lower that to a max of $60 per month that would be a tremedous effect on my costs assuming that the SPY works similarly to the SPX. If the excution is better than that is just icing.
 
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