E*TRADE - Cheapest Options Broker
E*TRADE, through its industry leading OptionsHouse trading platform, charges only $4.95 + $.50 per contract for options trades when at least 30 trades are placed each quarter. Otherwise, options trades are $6.95 + $0.75 per contract. OptionsHouse by E*TRADE was awarded #1 for Options Trading (5 stars). Not only that, but OptionsHouse's platform was awarded #1 Web Based Platform and provides a slew of options tools useful for options traders of all styles.
Trading cheaply is fairly straight forward, however investors should be careful when deciding on a final broker. The regular prices paid for stock and option trades are not the only cost factor that matters. There are a variety of other important factors that can effect the net cost per trade when trading stocks and options online. Here's a list of the most important:
Lastly, two fees that every broker charges (sell orders only) includes an SEC trading fee of $21.80 per $1,000,000 of principal and a FINRA Trading Activity Fee (TAF) of $.000119 per share. Investors can ignore these trading fees as they are the same for each regulated online brokerage and amount to no more than a few pennies per trade. For example, a 500 share market sell order of Disney (DIS) at $108.18 would result in a total fee of only $0.18 ($.12 + $.06).
|Interactive Brokers||Fidelity||OptionsHouse||Charles Schwab||Merrill Edge|
|Stock Trade Fee (flat)||N/A||$4.95||$4.95||$4.95||$6.95|
|Stock Trade Fee (per share)||$0.005||N/A||N/A||N/A||N/A|
|Options Base Fee||$0.00||$4.95||$4.95||$4.95||$6.95|
|Options Per Contract Fee||$0.70||$0.65||$0.50||$0.65||$0.75|
The take-away here is this: When contemplating any broker switch or new account based on commissions alone, it’s critical to understand what type of trader you are first, then research from there. How many trades do you place per month, on average? What is your typical order size? Do you buy and sell options? Do you frequently trade on margin? Do you trade ETFs or mutual funds? These are all great questions to ask yourself.
Because, just like the brokers that shine for niche reasons, the opposite is also very true. Interactive Brokers offers the lowest margin rates, but if you trade with only cash, then this is negligible. If you only want to trade a few contracts per options trade, Lightspeed per contract rates look great, but it charges an account service fee of $100 if certain monthly activity thresholds are not met. Like mutual funds? Well, SogoTrade’s $25.00 rate appears attractive until you realize every order must be phoned in. There are countless examples, all with their pros and cons.
Here is a summary of the lowest cost brokers for both stock and options trading:
|Online Broker||Best For||Minimum Deposit||Commissions||Overall Rating|
|Fidelity||Best Discount Broker Overall||$0||$4.95||4.5 Stars|
|Charles Schwab||Most Commission-free ETFs||$1,000||$4.95||4.5 Stars|
|Interactive Brokers||Cheapest Stock Broker||$10,000||$0.005 per share||4.0 Stars|
|OptionsHouse||Cheapest Options Broker||$0||$4.95||4 Stars|
|Merrill Edge||Best Rewards program||$0||$6.95||4 Stars|
To find out the true cost of cheap trading, don’t just trust our rankings, run the numbers yourself. Use the trading costs calculator here on the site, read our detailed commissions notes for each broker, then compare your top picks using the compare tool to make a final decision. Four-dollar lattes may be too expensive, but then $.99 brews from the local gas station are anything but delicious. In the end, it is about finding that happy medium where quality and price come together to offer you the most appetizing choice.
All pricing data was obtained from a published web site as of 2/20/2017 and is believed to be accurate, but is not guaranteed. The taxconference.ru staff is constantly working with its online broker representatives to obtain the latest pricing data. If you believe any data listed above is inaccurate, please contact us using the link at the bottom of this page. For stock trade rates, advertised pricing is for a standard order size of 500 shares of stock priced at $30 per share. For options orders, an options regulatory fee per contract may apply.