Options Trading Fees – An Impartial Comparison Among Brokers

The fees you pay when trading options can greatly affect profitability. With option fees and services varying between brokers, choosing a broker exclusively based on who has the lowest options trading fees isn’t always the best approach. This options trading fees comparison helps you weigh costs and features effectively.

Key takeaways

• Options trading fees differ widely among brokers and can significantly affect overall trading costs. For instance, Tradier gives you different fee tiers, while Vanguard has a fixed fee per contract.
• It may not be fair to try and find the “lowest” fees among brokers, as each may offer unique features and services that can impact trading performance.
• Take into account options trading fees and other features to determine the best broker for your specific trading needs.

Options Trading Fees Comparison – A Synthetic View

We took a look at what are some of the most popular options brokers out there, and it is clear that finding the best platform seems quite hard (if not impossible). For starters, here’s a table summarizing brokers, their ideal users, options contract fees, and a few additional notes:

While lowest options trading fees may sway your choice, we really think that factors like additional fees or advanced features matter too. For example, the table above might lead you to consider SoFi, but we must admit that the high inactivity fee and inefficient fee communication system are disappointing drawbacks.

In this case, we prefer a broker like Tradier, which offers relatively straightforward options trading fees. However, it’s worth noting that some competitors, such as Schwab’s ThinkOrSwim, provide more advanced features that you should also consider.

For beginners or traders focused on cost, Robinhood’s zero-cost structure makes it an attractive choice in our opinion, though its lack of advanced tools might limit its appeal for more experienced traders. We like IBKR because it offers a very wide range of instruments (even beyond options), but its complexity may not be ideal for everyone.

Options Trading Fees – A Look at the Main Brokers

Brokers play a key role in shaping options trading fees, from option fees per trade to the cost of each options contract fee. This section offers an options trading fees comparison among Robinhood, ThinkOrSwim, Tradier, Fidelity, SoFi, Vanguard, and IBKR. Note that we’re only focusing on the costs of trading options here, not on the accessory services or fees associated with trading options.

Robinhood

• Best for: Beginners and low-cost traders
• Main Pro: Zero-cost options trading for stocks and ETFs.
• Main Con: Limited advanced features for professional traders.

Robinhood stands out with its zero-cost options trading for stock and ETF options. We think this straightforward approach makes it an excellent choice for beginners or traders focused on minimizing costs. Here’s a summary of Robinhood’s options fee structure:

• Options trades: No base fees, no per-contract fees on stock and ETF options.
• Index options: Low contract fee applies (refer to their fee schedule for details).
• Exercise and assignment fees: None.

Robinhood’s technology-driven platform reduces costs and passes the savings on to users. However, as advanced traders, we honestly find the lack of sophisticated tools limiting. Despite this, it’s a strong choice for cost-conscious traders seeking simplicity.

Pros and Cons

Schwab’s ThinkOrSwim

• Best for: Advanced and active traders
• Main Pro: Powerful tools and advanced analytics. (bonus: Option Samurai has integration with them and users can send trades directly there. So, you can use our options screener to find trades and send them to your broker.)
• Main Con: Higher fees for occasional traders.

We believe that Schwab’s ThinkOrSwim offers a competitive fee structure for active and advanced traders. While standard online trades have $0 commissions, options trading fees include a $0.65 per-contract charge. Our take here is that this strategy makes it ideal for those who prioritize powerful trading tools and don’t mind paying a bit more per contract.

Here’s an overview of ThinkOrSwim’s options trading fees and other charges:

• Options trades: $0.65 per options contract fee.
• Broker-assisted trades: Additional $25 service charge.
• Automated phone trades: $5 fee applies.
• Other charges: Exchange process fees, ADR fees, and Stock Borrow fees may also apply.

ThinkOrSwim doesn’t extend its zero-commission structure to OTC equities, transaction-fee mutual funds, futures, fixed-income investments, or trades made on foreign exchanges, including the Canadian market. However, it’s packed with advanced tools catering to experienced traders who require in-depth analysis and customization. Overall, we like this broker as it has reasonable fees compared to a nice set of features.

Pros and Cons

Tradier

• Best for: Cost-conscious active traders
• Main Pro: Flat monthly pricing for nearly unlimited options trades. (bonus: Option Samurai has integration with them and users can send trades directly there. So, you can use our options screener to find trades and send them to your broker.)
• Main Con: Limited platform features compared to competitors.

Tradier offers a straightforward fee system (which is something we really like) designed for cost-conscious active traders, with three tiers catering to different needs. Here’s how the options trading fees break down in each plan:

• Lite: No monthly fee; $0.35 per contract for options trades on equities, ETFs, and indexes.
• Pro: $10 monthly fee; no fees for options on stocks/ETFs, but $0.35 per contract for index options.
• Pro Plus: $35 monthly fee; no fees for options on stocks/ETFs, and just $0.10 per contract for index options.

Tradier’s tiered structure lets traders choose what fits their activity level best. In our opinion, Lite is ideal if you trade less frequently, while Pro and Pro Plus provide more value for higher-volume traders prioritizing cost savings.

We feel this flexibility makes Tradier a strong option for traders seeking the lowest options trading fees tailored to their trading style. While option fees vary, the consistent focus on transparency and affordability makes it appealing for those aiming to minimize costs without sacrificing functionality.

Pros and Cons

Fidelity

• Best for: Active traders
• Main Pro: Competitive pricing with no account minimums.
• Main Con: Limited advanced options trading tools.

Fidelity provides a straightforward and affordable structure for options trading fees, making it appealing to active traders. Here’s what you need to know about their pricing:

• Online options trades: Cost between $0 and $0.65 per options contract fee, depending on the specific trade.
• Buy to close orders: Free for contracts priced at $0.65 or less.

This competitive pricing allows traders to keep their trading costs minimal, particularly if they frequently execute buy to close orders. Fidelity’s platform ensures these savings don’t come at the expense of functionality, offering robust tools and resources for efficient trading.

When it comes to the lowest options trading fees, we really think that Fidelity is a strong contender, especially when you factor in the fee-free closeout orders. It’s a solid choice for traders who want reliable service without paying unnecessarily high option fees. For cost-conscious traders seeking options trading fees comparison across major brokers, we really think that Fidelity stands out for its value and transparency.

Pros and Cons

SoFi

• Best for: Beginners and casual investors
• Main Pro: Commission-free trades
• Main Con: Limited advanced options trading strategies.

SoFi promotes a no-fee system for options trading fees, which can appeal to beginners and casual investors. However, we should tell you that there are a few things to watch out for. While option fees are advertised as nonexistent, users have noted hidden non-trading costs like a $25 inactivity fee.

Key points about SoFi’s fee setup include:

• Options trades: No fees for options on stocks, ETFs, or indexes.
• Non-trading fees: $25 inactivity fee reported by users online.
• Fee information: Fee details are buried in a lengthy PDF, unlike competitors who share simpler breakdowns.

For new or less frequent traders, the lack of option fees makes it an attractive choice. However, those considering SoFi should carefully review all related charges to avoid surprises. As traders, we believe its reliance on an exhaustive PDF for outlining fees creates unnecessary complications in fee transparency. This is something we don’t like about the broker.

While it may offer some of the lowest options trading fees, the hidden costs and inefficiency in communication mean it’s best suited for low-volume traders who don’t need constant account activity.

Pros and Cons

Vanguard

• Best for: Long-term investors and portfolio managers
• Main Pro: Straightforward fee structure.
• Main Con: The broker probably works best for large portfolios

Vanguard’s options trading fees are structured based on the amount you have invested in their ETFs and mutual funds. Here’s how it breaks down:

• Less than $1 million: $0 commission for trades, plus a $1-per-contract fee.
• $1 million to $5 million: Enjoy your first 25 trades for $0, then $0 commission with a $1-per-contract fee after that.
• $5 million or more: The first 100 trades are free, followed by $0 commission and a $1-per-contract fee thereafter.

While these fees might not qualify as the lowest options trading fees in the market, Vanguard provides some flexibility for high-net-worth investors. However, casual traders might find the $1-per-contract fee less competitive when compared in an options trading fees comparison.

Our opinion here is that Vanguard’s approach caters to those already invested significantly in their funds. It’s a solid choice for loyal, high-balance traders who want to keep their portfolio within one system. For others, weighing option fees across platforms might reveal more cost-effective alternatives depending on their activity level.

Pros and Cons

Interactive Brokers

• Best for: High-volume traders
• Main Pro: Extremely competitive tiered pricing for active traders.
• Main Con: Potentially confusing fee structure for beginners.

Interactive Brokers (IBKR) offers one of the most competitive fee structures for high-volume traders, with tiered pricing that decreases as monthly contract volume increases. While the fee structure is transparent, beginners might find it somewhat complex. Here’s a breakdown of IBKR’s options trading fees:

• ≤ 10,000 contracts: $0.65 per contract for premiums ≥ $0.10; $0.50 per contract for premiums between $0.05 and $0.10; $0.25 per contract for premiums < $0.05.
• 10,001 – 50,000 contracts: $0.50 per contract for premiums ≥ $0.05; $0.25 per contract for premiums < $0.05.
• 50,001 – 100,000 contracts: $0.25 per contract.
• ≥ 100,001 contracts: $0.15 per contract.
• Minimum per order: $1.

IBKR also charges additional exchange fees, clearing fees, regulatory fees, and transaction fees. Despite these potential add-ons, we strongly believe that IBKR remains a top choice for traders who value low options trading fees at high volumes.

Pros and Cons