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Place Trade's option commissions may appear to vary because our clearing firm includes the actual commission ($0.75 per contract - minimum $1.50) along with the regulatory, exchange and/or transaction fees (which are passed directly through to you - please note that Place Trade does not receive any part of these fees). So when you see your commission you may consider it as consisting of two parts:
1. 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
2. Third party exchange, regulatory and/or transaction fees.
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, 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 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.
*Options Minimum $1.50, No Base Fee, Simple $0.75 Per Contract (Exchange fees are passed through directly to you with no mark-up 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 mark-up or payment to Place Trade®.)
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(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.)
Please note that all options trades are placed online and Place Trade Financial does not under any circumstances provide advice regarding options.