Choosing a Broker

Choosing a Broker

Now that you are familiar with basic option terminology, strike prices, expiration dates, order types and the way each are used at NextOptions.com, you are ready to take the next step towards making double- and triple-digit profits.

Even though most of the leading online brokerage firms are well-versed in trading options, all brokers are not created equally. There are also a number of option-specific brokerages that have tools to assist option traders.

Keep in mind, though, that, in general, the lower the commission, the less support you can expect. Full-service brokers can charge $2–$5 per options contract, while discounters might charge a low flat commission per trade, regardless of the number of contracts traded.

Applying is easy — and it often can be all done online. Expect to pay anywhere from $5.00 to $19.95 commission per transaction for an option trade. Some option brokerage firms have a $1.50 per contract commission schedule, with a minimum of, say, $14.95 per trade (Meaning, even if you only do one contract, they will get you for the $14.95).