Thinkorswim/TD silently added index option fee for SPX option trades?

gariki

New member
Hello all,

Back in oct or nov last year with the push to commision free trading my SPX butterfly cost (4 legs) was around 2.60$ per fly. But then again seems like starting jan 1st, they started adding a new cost under "index option fee" title bringing my fly cost back to around 5.50$

Did others notice this? I dont recollect getting any mail or notification about this added cost - so basically commision cost are back to what they were before. shuckss...

-gariki
 

Oliver

New member
I'm seeing the same, so now it's worse than the rate I negotiated with them some time back.

Classy.
 

status1

Active member
There was an announcement that they will be adding in the index option fees in January so I don't think that is anything new There are different fees depemding if it's weekly or monthly and if it's less than $1
 

gariki

New member
kind of funny that with the push towards commision free trading etc etc that they are advertising about.. in the end my commisions went up slightly. i think it was 5bucks before without any added fee.
 

status1

Active member
Yes there were others who were complaining here about this a couple of months ago and there was some discussion here about looking for another brokerage but the question is what are you willing to give up to get that
Can you trade without the analyze tab ?
If yes than it would be easy to move to another brokerage otherwise I am not sure giving up the analyze tab would be worth it

The main question is what will happen with the fees once Schwab merges with TD
 

gariki

New member
As a matter of fact i can actually trade without the analyze tab since i pay for ONE anyways; and have other excel sheets to track pnl also. I looked at other brokers too but almost all of them charge about the same.

Interested in comparisons with other brokers. Anyone have suggestions; this is particularly for an ira account.
 

Joenors

New member
There are 2 forum discussions regarding this issue. Search the forums for "TDA plans to add fees to option contracts?" and "Fidelity Active Trader". My take away from the discussions is that Schwabb and Fidelity have the best commissions for index options, but neither has a platform as good as Think or Swim. Neither of these two brokerages pass on the index option fees. Some people reported contract price as low as 50 cents with Fidelity, 65 cents with Schwab. Also, Fidelity doesn't charge anything to close an option that's less than 65 cents, and they pay a higher interest on cash in the account. Schwab's platform for trading options may be a little better than Fidelity's.
 

gariki

New member
There are 2 forum discussions regarding this issue. Search the forums for "TDA plans to add fees to option contracts?" and "Fidelity Active Trader". My take away from the discussions is that Schwabb and Fidelity have the best commissions for index options, but neither has a platform as good as Think or Swim. Neither of these two brokerages pass on the index option fees. Some people reported contract price as low as 50 cents with Fidelity, 65 cents with Schwab. Also, Fidelity doesn't charge anything to close an option that's less than 65 cents, and they pay a higher interest on cash in the account. Schwab's platform for trading options may be a little better than Fidelity's.
Thanks Joenors. Very useful information.
 

Oliver

New member
I've only used Ameritrade, Interactive Brokers, and TastyWorks.

My read of the IB commissions is that it would cost $1.10 per contract for SPX, so $2.20 round trip. The two problems I had with IB were that their order entry for options is extremely clunky and their margin calculations were terrible for SPAN (and for PM, I've heard). In particular, I had them apply many times the Reg-T margin on an /ES SPAN trade. So basically, not SPAN. This didn't always happen but I've heard anecdotal stories of people being forced out of perfectly safe trades or forced to make inherently dangerous high delta unwinds because of this kind of breakage.

TastyWorks looks like it should be $1.65 to open and $0.65 to close for SPX, so $2.30 round trip. I think they have the easiest platform for entering orders, particularly on phones. Their platforms were very inconsistent in how they handled futures options pricing. They are adding Portfolio Margin now/soon but the minimums are a bit higher than Ameritrade and IB. I am not sure if they are integrated with US tax software, which could be a hassle. A side note, TW caps stock option commissions at $10/leg, which could be interesting if you make large volume trades in stock/ETF options.
 

status1

Active member
Just to clarify about TastyWorks for SPX it's actually $1.79 to open and $0.79 to close so $2.58 round trip
They are actually charging $0.75 for SPX index because they are charging another $0.10 for option clearing fee on all options on top of that $0.65 plus another separate $0.04 transaction fee per leg

Unfortunately they don't include the SPX option fee in that $10/leg cap so you are still paying more than $10 per leg even with that cap
So for less than 10 lot you are actually paying even more than TD Notice how they don't compare index option fees to other brokerages on their website they only compare regular options
 

Jack Lane

New member
I am looking to move my IRA Index options to Schwab. I originally had a deal with TOS for several years at $1.00 per contract no ticket charges. They refuse to honor that. I agree that TOS still has the better platform, but I have other options for monitoring the trade. Schwab is also offering 500 free trades over 2 years. Each trade can be up to 20 contracts, e.g. a 5 lot butterfly. Over 2 years that could amount to 10,000 contracts assuming every trade is 20 contracts.
 

gariki

New member
I dont use tos for the analyze tab that much anymore but just to place trades. That said i just looked at Schwab's platform; and holy molly. That reeks 1999. Scary.
 
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Lou S

Guest
Hey gariki,

I left TOS last year for Tasty and won't ever go back. After a year with them I attempted to negotiate options pricing and TOS customer service was arrogant and basically told me to screw off. I gave them a chance but they are dead to me as far as me trading with them. With that said, I still have a few bucks in that account so I have access to all of their tools so if you think you can't live without the TOS tools this is something to consider.

I trade at tasty, merrill and schwab.

Tasty- I prefer this platform for trade setups and use it before placing trades in Merrill and Schwab. I left TOS for Tasty and won't go back. Retirement and cash accounts here are great. They had no offer to bring over my money but I'm very happy with their customer service. I love trading there.

Merrill- l have been with them for 5 years and really like the Bank of American merger benefits. Low commissions make this best for trading options on high priced underlyings so I do SPX trades here. Recent Merrill rule changes to retirement accounts make them an awful choice for IRAs. I moved retirement accounts to tasty and schwab.

Schwab- They are the worst for options but I am giving them a try to take advantage of a cash offer and 500 free options trades over 2 years.

Due to mergers and changes with brokers I have been through a few. I like having at least 2 brokers at one time in case one goes down or one goes rogue and changes their pricing agreement. I just vote with my money even though changing brokers is a pain in the ass.

Good luck! I'm also new to Aeromir and hoping to learn a lot! Feel free to share anything you have found being new here!
 

status1

Active member
Just curious
Are you trading SPX options or other products ?
If so does Merrill pass thrugh the SPX index fees and if so how much is it ?

I have an account at TOS and Tasty and for less than 10 spx contracts TOS is still cheaper than Tasty
I have not tried Merril yet
 
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Lou S

Guest
I do trade several products including SPX. I haven't seen any index fees. I didn't trade SPX at TOS so I never noticed those.

I agree with you on tasty costs... I find them best for trades that have at least 20 contracts per leg. I don't like to let commissions or taxes affect any of my trade decisions so I work hard at keeping my accounts product specific. Platform wise Merrill would be a step back for you from TOS but if you have another source for options analysis you'd be ok. In the end I think it is only useful if you want multiple brokers. I would not keep them as my sole broker. I have a large family so many of the BofA benefits are a side benny that I put to full use.
 

status1

Active member
I was not planing to switch from TOS to Merrill I was just curious if they pass on the index fees just to know what commision to expect in case I need another brokerage or to switch from one of my many other brokerages Definitely would not want to give up my TOS platform to any other brokerage
 
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