2019: E*TRADE commissions for spread trades, straddles or strangles, options contracts, buying puts and selling calls, exercise and assignment fees.

E*TRADE Options Commissions

If you are an options trader on Etrade, 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 Etrade will cost you a fixed $6.95 per trade plus $0.75 per contract, the same that you would pay with a TD Ameritrade account. If you are a frequent trader (placing at least 30 trades per quarter) however, you will qualify for Etrade’s discounted rate, which is $4.95 per trade plus just $0.50 per contract. Just like with most brokers, placing more complex options trades on Etrade that involve multiple legs and/or equity positions will result in higher overall commissions. We will go over some examples of these trades next.

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 Etrade would involve one flat equity commission of $6.95 (or $4.95 for frequent traders) in addition to a single options commission of $6.95 ($4.95 with the discount) plus the $0.75 (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 standard flat commission ($6.95, or $4.95 for frequent traders) plus the variable per contract fee ($0.75, or $0.50 for frequent traders). The total commission would be $9.95 and consist of one standard commission of $6.95 plus $0.75 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 $6.95.

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 - $9.95 or $6.95 if you qualify for the volume discount. It consists of one standard commission plus the per contract fee for each of the two contracts within each of the two legs (4 contracts total).

Dime BuyBack Program

One nice perk of options trading with Etrade 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 Etrade 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.

Options Exercise and Assignment Fees

As with most brokers, although cheaper than many, Etrade charges an options exercise and/or assignment fee of $4.95. For comparison, TD Ameritrade’s exercise fee is currently $19.99.

Regulatory Options Fees

Most brokers pass through small regulatory fees to their customers, and Etrade is no exception. These options regulatory fee with Etrade 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 Etrade is comparable to trading them on most other brokers but with the potential for additional cost savings. Etrade’s and TD Ameritrade’s options pricing both start out at the same spot, but Etrade offers discounted commission for more frequent traders while TD Ameritrade does not. This makes Etrade a superior choice for day traders from a cost-perspective.

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