Hello all, hoping you are way smarter than me. I had to change brokerages recently because my old one, of like 20yrs, started doing weird trade restrictions they couldn’t explain.
I ended up at SoFi because I already had a banking account there, but their investment set up is SERIOUSLY crippled for people who actively manage their accounts.
Now I am searching again but I am finding words in the Fees section that make no sense to me. This is for both etrade and interactive brokers. They list $0 for an option ‘trade’ but like .65c for a contract.
What the heck does that mean? I called etrade and he still couldn’t clear this up.
Example I gave him…I ‘sell’ a covered call for SHOP. Is that a trade or a contract? What is a trade vs a contract? Nothing on the internet or people I call can define the difference.
I wish they were clearer. Most likely they mean that for each option trade, the cost to you will be $0 + $0.65 per option contract + regulatory fees. So, for example, if you were to buy one Disney 105 strike call, then the cost to you would be $0.65 (commission) plus $0.02 (regulatory fee), for a total of $0.67. The Disney March 105 call is trading at about $4 right now, so the trade would cost you $400 + $0.67. That’s excellent at 0.17% total costs to buy that option. I remember back in the 80s when that trade might cost $50+ (or even $100+ sometimes) in commission!
If you were to buy 10 contracts in one trade, then the cost to you would be 10 * $0.65 + regulatory fees (I think they depend on the total price, but are generally minimal), or $6.50 + regulatory fees.