Brokers Reviewed for Option Trading

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As you read in the Getting Started  section, it is important to keep your transaction costs as low as possible when executing your option trades. This eliminates the Smith Barney and Edward Jones types. These full or semi-full service brokerage outfits charge too much for option trades for you to make money with option trading.

Also if you decide to use an option picking service, you will lose valuable time in executing your order. You have to call the office, get transferred to them, they have to check the price, then they have to put the order in, and then you wait for a call back if your order fills. They basically do the same computer entry as you do with an online broker.

Please note that all fees listed were accurate at the time of writing this article and fees with the brokers can change. So you do need to confirm the prices with the brokerage house.

The online brokers is who you need to use to get your orders executed.  They charge a lot less than the full service brokerages and you can execute the order yourself quickly. The goal is to have winning option trades and keep as much money in your pocket as possible.  That doesn't happen if you have to give back huge percentages of your winnings or even pay out a big chunk to cut free from the losers to the brokers.  Keep the money in your pocket.

It is important to note that there is a wide spread in the prices that the online brokers charge to execute a trade. Some Online Brokers to consider for your option trading: Think or Swim, Fidelity, Schwab, Ameritrade, Etrade, Trade Monster, OptionsXpress, Trade King, and Optionshouse.

You will find that almost all brokers charge a per contract fee of 65 to $1.25 which is in addition to a regular transaction fee.  When figuring your break even, you want to double the fees because you have to pay to get out of the option holding.

Something to also keep in mind with the fees is what services each online broker offers.  The cheapest of the bunch with rock bottom fees offers very little in terms of information. continued

Getting Started

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