The 1 Trick That Can Save You Thousands

Original Link | OptionGenius

Last week the stock prices of all the major retail brokerage houses took a hit, down several percent.

The reason: There is now a price war in commissions.

One options brokerage dropped their commission per stock trade from $7.95 per trade to $4.95 per trade. And then another lowered theirs as well.

Now it seems the others will follow.

Wait.

$5 per trade?

They just lowered their rate to that now?

I’ve been paying less than that at the same brokerage for years.

No that’s not right.

Ameritrade, where I have most of my accounts, only lowered their rates to $6.95.

That is over $3 per trade more than what I pay at the same brokerage, for the same service. And I know that I am still overpaying. I get better rates at my other accounts.

Holy moly.

If you are overpaying in options commissions, you are literally flushing thousands of dollars away for no reason.

Same goes for option commissions.

Some people pay $6.95 per trade plus .75 per option.

Others pay $4.95 plus .25 per option

Others pay $1.50 per option

Others pay $1.25 per options.

Others pay  .75 per option

ALL AT THE SAME BROKERAGE!

And it has nothing to do with how much money you have in your account or how much you trade.

That is what they want you to believe.

It has to do with how persistent you are in getting them to give you a lower rate.

And if they still don’t give it to you?

Move to another broker that will.

Most of the brokerages now are all public companies. They live and die by how many new accounts they sign up on a quarter to quarter basis. Use this to your advantage.

Don’t let your options brokers do this

It drives me crazy when I hear from a trader, that “my broker won’t let me do so and so strategy”.

What?

Won’t your broker let you?

It’s your money.

They are not your parents.

If they say no, find another broker that will.

There are dozens of them out there that will gladly take your money and let you do whatever you want.

Plus they will charge you lower rates and fees.

“But I like their software/service/alerts/app/etc”

That’s great.

I am not telling you to close your accounts.

Say you like the software your current broker provides but not the rates.

Open an account at another broker and transfer 90% of the account.

Keep a small amount in the old account so you can keep using the software.

Do all your analysis, tracking, modeling there but the trades at the new broker.

“But doesn’t that get confusing?”

We are literally talking about thousands of dollars a year. Even if you are not that active.

I have one account where they charge me $1.50 per option, and an account at another broker where they charge me .50 per option.

That is $1 per option difference right?

Even on a small $10,000 account, that is still close to $50 a month in extra fees or $600 a year.

That means I have to make at least 6% on this account just to overcome the extracommissions.

Then I have to overcome the .50 per option I am still paying.

So yeah at tax time it does involve a little more paperwork for my CPA. But if you are trading with any size, you are shooting yourself in the foot if you do not move your money to the best/cheapest broker you can find.

Rates change all the time.

But e-options has always been low priced.

Interactive Brokers is very cheap.

And if you do some digging online you will find others that will negotiate with you.

Being loyal to your options brokers can be a very expensive proposition.

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About the Author: TTR Admin