2024: E*TRADE commissions for spread trades, straddles or strangles, options contracts, buying puts and selling calls, exercise and assignment fees.

E*TRADE Options Fees

If you are an options trader on E*TRADE, this article will tell you everything you’ll need to know about their options commission schedule and fees for both simple and more complex bets.

Placing an options trade (options on equities, ETFs, and index options) on E*TRADE will cost you a fixed $0 per trade plus $0.65 per contract, the same that you would pay with a Charles Schwab account. But this is much higher than $0 per contract that Webull offers.

Just like with most brokers, placing more complex options trades on E*TRADE that involve multiple legs and/or equity positions will result in higher overall commissions. We will go over some examples of these trades next.

etrade options fees

Covered Options Trades

A common options strategy is to sell a call option while simultaneously going long on the underlying stock – commonly referred to as a “covered call”. Implementing this bet on E*TRADE would involve one flat equity commission of $0 in addition to a single options commission of $0 plus the $0.65 (or $0.50 with the discount) per contract fee.

Two-Legged Options Spread Trade Commission

Let’s say you put on a two-legged spread trade where you purchase two call options and simultaneously sell two call options of a higher strike price. Your total cost would consist of the variable per contract fee of either $0.65, or $0.50 for frequent traders. The total commission would be $2.60 and consist of one standard commission of $0.65 per contract for each of the two contracts within each of the two legs (4 contracts total). If you qualify for the volume discount your total commission would only be $2.00.

Two-Legged Options Straddle or Strangle Trades Commission

Strangles and Straddles are additional examples of options strategies that will incur higher commissions because of the multiple legs. For example, if you bought two put options for the first leg and two call options for the second leg, your total commission would be the same as in the first example - $2.60 or $2.00 if you qualify for the volume discount. It consists of the per contract fee for each of the two contracts within each of the two legs (4 contracts total).

Etrade Options

Dime BuyBack Program

One nice perk of options trading with E*TRADE is their Dime BuyBack Program, which is essentially a feature where if you are closing out a short option position that is priced at or below $0.10 per contract E*TRADE won’t charge you a commission. In theory, this makes it easier for options traders to manage their short risk since cost would no longer be a factor in deciding whether or not to close out these short positions.

E*TRADE Options Exercise and Assignment Fees

E*TRADE's charge for options exercise and/or assignment is $0.

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Regulatory Options Fees

All brokers pass through small regulatory fees to their customers, and E*TRADE is no exception. These options regulatory fee with E*TRADE is currently around $0.014 per contract. There is also a FINRA transaction fee of a fraction of a penny that applies to most options sales.

E*TRADE Options Pricing Conclusion

In summary, trading options on E*TRADE is comparable to trading them on most other brokers but with the potential for additional cost savings. E*TRADE’s and Charles Schwab’s options pricing both start out at the same spot, but E*TRADE offers discounted commission for more frequent traders while Charles Schwab does not. However, Webull offers options trading with no per contract charge and customers are paying only tiny regulatory fees described above.

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E*TRADE Overview

E*TRADE is a discount brokerage that offers a full range of retirement accounts, low commissions and fees for trades, and many free services and resources. E*TRADE makes available to investors a wide range of IRA options.

Besides executing trades, most online brokers offer useful amenities such as real-time quotes, proprietary trading platforms, news and research services, portfolio management and tracking tools, and mobile apps for trading on the go.

E*TRADE offers a high quality, fully integrated trading platform called E*TRADE Pro for active traders. Relatively new, and designed for the less active trader, is Power E*TRADE. It provides "the ultimate one-page website investing experience," according to the E*TRADE website. Power E*TRADE combines account and portfolio tracking with news and information, real time quotes, retirement planning calculators, and other features, as well as the ability to place trades with a few mouse clicks.

Research and education is another area where E*TRADE supplies useful information and training to IRA investors. Retirement planning calculators help individuals estimate how much they'll need to save in the future to reach retirement goals. Education on the variety of investment options allowed in IRAs helps investors understand where to allocate their retirement plan assets to maximize their returns and minimize their personal risk. E*TRADE offers a wide variety of interactive demos and tutorials, live or on-demand webinars, educational videos, and exclusive market commentary.

E*Trade Pricing

Commissions are what most investors emphasize when evaluating online brokers. But an individual should consider the types of investments he or she intends to buy and sell when determining the best commission structure to look for in a broker. Some brokers offer extremely low rates for options trading, but their stock trading commissions might be higher than average. Other brokers may offer certain mutual fund purchases commission-free, but charge for other mutual funds higher than average commission.

Some companies tout low prices on conditional orders or combination trades such as buying a stock and simultaneously writing a call option on that stock (a "buy/write"). Still other brokers offer low commission costs across the board, but make up that difference with higher than average custodian fees or unique fees not charged by their competitors. An investor should carefully consider the securities he/she trades along with the frequency of those trades. Those factors may make a difference in overall costs of investing with one brokerage instead of another.

The following chart lists E*TRADE's commission structure, fees, and other requirements, and compares it to the price range found with the other major online discount brokers as they relate to IRAs. There are no major hidden fees at E*TRADE that investors should worry about.

Service, Commission, or Fee Range of most-popular brokers E*TRADE pricing Comparative cost vs. range for E*TRADE
Minimum Investment to Open an IRA $0-$2,500 $500 Lower than median
Fee to Open an IRA $0 $0 Lowest
Annual Custodian Fee $0-$20 $0 Lowest
Market order stock trade $0 $0 Lowest
Limit order stock trade $0 $0 Lowest
Option–1-contract $0.50-$0.65 $0.65 Highest
Option—10-contracts $5.00-$6.50 $6.50 Highest
Mutual Fund— No load funds $0-$49.99 $0 Lowest
Mutual Fund— Transaction fee funds $0-$49.95 $19.99 Lower than median
US Treasury securities $0-$25 $0 Lowest
Corporate Bonds or similar $1-$38 $1/bond, minimum $10 Lower than median

Source: NASDAQ website and individual brokerage websites. Comparative brokerages are: Ally Invest, Fidelity, Charles Schwab, and Vanguard.

As you can see, E*TRADE is competitive with the other large online brokers. None has the absolute lowest commissions on every type of trade. All charge less in commissions than full-service, brick-and-mortar brokerages. Some firms charge higher fees for administrative services than E*TRADE.


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