Ally Invest Options Fees
Are you looking to trade options with an Ally Invest account? If so, you should read this article, which goes over all the relevant options-related commissions and fees you will encounter with Ally.
Ally Invest Options Commissions
Ally Invest has two commission tiers for equity and options traders based on the size of your account and how frequently you trade, which allows them to offer more attractive pricing to the investors that give them more business. If you have an average daily balance of at least $100,000 in your Ally account or placed at least 30 equity and/or options trades during the prior quarter your account will automatically qualify for Ally’s “select” commission pricing.
Select commission on options trades is $3.95 plus $0.50 per contract. If you are not a frequent trader or don’t meet the required minimum account balance for select pricing, you will pay Ally’s standard options commission, which is $4.95 plus $0.65 per contract. There’s not a huge difference, but select pricing is just a nice little bonus to ease the commission burden heavier traders will notice more. For those of you that like to use complex options strategies involving underlying stock and/or multiple options with different legs and strike prices, we’ll cover some of these next.
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Covered Options Trades
A covered call is one of the most basic options strategies where you sell a call option and simultaneously buy an equivalent amount of underlying stock, which enables you to still participate in the stock’s upside until it reaches the call’s strike price and also offers you some downside protection in the call premium you collected. A covered call strategy on your Ally account would cost you a single option commission ($4.95 or $3.95 plus $0.65 or $0.50 per contract) in addition to a single stock commission ($4.95 or $3.95).
Two-Legged Options Spread Trade Commission
One of the more popular and complex options strategies is a two-legged options spread trade. This strategy involves buying a call option while simultaneously selling a call option for the same stock but with a higher strike price. This allows you to participate in the stock’s upside up until it reaches the higher strike price of the call you sold while also lowering your overall cost because of the premium you received from selling the higher strike call option.
With select pricing, Ally’s commission on this spread trade (where you purchase a single contract of each option) would be $4.95, consisting of a single $3.95 options commission plus $1.00 for the single contract of each leg ($0.50 per contract). With standard pricing it would cost you $1.30 more, or a total of $6.25. If this seems lower than you expected a spread trade would cost it’s because even though you are trading two different calls with different strike prices, Ally only charges a single flat options commission, but the per contract charge applies to each contract of each leg.
Closing Options
Another benefit of trading options with Ally is that if you find yourself in a losing options position priced at $0.05 or less that keeps decaying as expiration approaches you don’t need to consider the commission when deciding to close it or not. This is because Ally will waive the commission on closing these cheap options positions, recognizing that in many cases the commission would offset the proceeds received from the sale.
Ally Invest Options Exercise and Assignment Fees
If you want to exercise an option, you should be aware that Ally, as do most brokers, charges a $9.95 exercise fee and a $4.95 assignment fee. These fees fall in the middle of the range when compared to other brokers.
Regulatory Options Fees
A smaller part of the trading costs you incur will come from regulatory fees that are charged on options sales and passed through to the investor by the broker. These are relatively insignificant and amount to a few pennies per contract.
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