Why did you charge me more (or less) than 75¢ per contract for my option trade?
Place Trade's option commissions may appear to vary because we include both the actual commission ($0.75 per contract *) along with the regulatory, exchange and/or transaction fees and/or rebates (credits) which are passed directly through to you - please note that Place Trade does not receive any part of these fees or rebates (credits). So, when you see your commission you may consider it as consisting of two parts:
- The execution fee which accrues to Place Trade. For Smart Routed orders this fee is set at $0.75 per contract, which may be reduced to as low as $0.20 per contract for orders in excess of 100,000 contracts in a given month (call us at 919-719-7200 for costs on Direct Routed orders, reduced rates on low premium options and minimum order charges); and
- Third party exchange, regulatory and/or transaction fees and/or rebates (credits).
Please note that this does not mean that you will always pay more, you could actually end up paying less than $0.75 per contract when you factor in any rebates that you may receive (this actually happens).
Did you overcharge (or undercharge) me on my options trade commission?
Third Party Fees and Rebates (Credits) which may be included in your commission:
If your order is routed to an exchange which maintains a liquidity fee/rebate structure, then we will pass any resulting third party fees or rebates (credits) back to you.
In the case of third party fees, certain U.S. option exchanges maintain a liquidity fee/rebate structure which, when aggregated with the Place Trade execution fee and any other regulatory and/or transaction fees, may result in an overall per contract commission charge that varies from one order to another. This is attributable to the exchange portion of the calculation, the result of which may be a payment to the customer rather than a fee, and which depends upon a number of factors outside of Place Trade's control including the customer's order attributes and the prevailing bid-ask quotes.
Exchanges which operate under this liquidity fee/rebate model charge a fee for orders which serve to remove liquidity (i.e., marketable orders) and provide a credit for orders which add liquidity (i.e., limit orders which are not marketable). Fees can vary by exchange as well as by customer type (e.g., public, broker-dealer, firm, market maker, professional), option underlying with public customer rebates (credits) generally ranging from $0.10 - $0.42 and public customer fees from $0.15 - $0.50.
Place Trade is obligated to route marketable option orders to the exchange providing the best execution price:
Place Trade is obligated to route marketable option orders to the exchange providing the best execution price and the Smart Router takes into consideration liquidity removal fees when determining which exchange to route the order to when the inside market is shared by multiple (i.e., will route the order to the exchange with the lowest or no fee). Accordingly, the Smart Router will only route a market order to an exchange which charges a higher fee if they can better the market by at least $0.01 (which, given the standard option multiplier of 100 would result in price improvement of $1.00 which is greater than the largest liquidity removal fee).
For additional information on the concept of adding/removing liquidity, including examples, please review Add or Remove Liquidity.
*Please note that there is NO BASE FEE for Options Commissions
Unfortunately, there is a lot of misinformation out on the web, particularly on the fake "review" sites1 where affiliate marketers (who we do not pay off) show that we charge a base fee plus a per contract fee. This is simply incorrect!!!
We only charge a per contract fee (and pass along any exchange fees and/or rebates). We do not charge a base or base plus fee like most other firms.
As with stock orders, our minimum of $1.50 applies so whether you buy one contract or two contracts, your total commission will be $1.50 because you must meet the minimum. The total would not be $1.50 plus the cost per contract. If you traded 3 contracts, your total commission would be $2.25 (plus any exchange fees or minus any exchange credits that were passed through to you which will either be added or subtracted from your total as discussed above).
*Options Minimum $1.50, No Base Fee, Simple $0.75 Per Contract (Exchange fees are passed through directly to you with no markup or payment to Place Trade Financial.)
Based upon published Web site commission schedules, as of 2/24/2012, for E*Trade, Fidelity, Charles Schwab, and TD Ameritrade for all online U.S. equity trades.
("All-in" applies to Smart Routed stock commissions only. "All-in" does not apply to directed stock orders or other securities which may incur exchange fees. Exchange fees are passed through directly to you with no markup or payment to Place Trade®.)
1Consumers are advised to use caution when making decisions based on the advice of online review sites:
Regardless of the type of industry, company, product or service under review, you may want to use caution when relying on reviews offered by online review sites or clicking their links to specific company websites. There are a few legitimate review sites out there (think Barron's, Consumer Reports and other highly reputable and internationally recognized names), however, rapid growth in the multi-billion dollar affiliate marketing industry has led to an extraordinary boom in the creation of affiliate marketing sites posing as review sites.
Many of the review sites that have popped up online appear to offer (with some even claiming to offer) unbiased reviews. Unfortunately, most review sites fail to clearly disclose that they are actually advertising/affiliate marketing sites which use special links to direct and/or track your click-throughs to sites which will pay them for your clicks/website visits, newsletter or free trial sign-ups, purchases, etc. In most cases, this is done without your knowledge as it is unlikely that you would notice that you were being tracked, using a specially coded link or that these affiliate marketers were being compensated in any way - particularly because the reviews are not clearly recognizable as advertising. Coincidently, most affiliate marketers tend to offer the best reviews to the companies, products or services that happen to pay affiliate marketing fees. Affiliate marketers publish reviews for profit regardless of whether or not the reviewers have actually ever worked with a particular company, used a company's products or services or even included peer comparisons of pricing, products, service, etc. in their reviews. This practice reaches far beyond the financial services industry.
(The links above take you to the Place Trade WebTrader Login Page. Our award winning Place Trader Workstation (TWS) is available in multiple languages as well.)
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