Introduction
Are you interested in option trading but not sure about the fees and charges? TD Ameritrade is a popular online broker that offers options trading to its clients. In this article, we will discuss everything you need to know about option trading fees at TD Ameritrade.
What are Option Trading Fees?
Option trading fees are charges that brokers impose on clients for executing an options trade. These fees can vary depending on the broker and the type of options trade. TD Ameritrade charges fees for options trades, including a per-contract fee and a commission fee.
Per-Contract Fee
TD Ameritrade charges a per-contract fee of $0.65 for options trades. This means that for every options contract you buy or sell, you will be charged $0.65. For example, if you buy 10 options contracts, you will be charged $6.50 ($0.65 x 10).
Commission Fee
In addition to the per-contract fee, TD Ameritrade also charges a commission fee for options trades. The commission fee is $6.95 per trade, regardless of the number of options contracts you buy or sell. This means that if you buy or sell one options contract, you will be charged $7.60 ($0.65 per-contract fee + $6.95 commission fee).
Other Fees
TD Ameritrade also charges other fees that may apply to options trades, including exercise and assignment fees. Exercise fees are charged when you exercise an option, which means you execute the right to buy or sell the underlying security. Exercise fees can vary depending on the broker and the type of option. Assignment fees are charged when you are assigned an option, which means you are obligated to buy or sell the underlying security. Assignment fees can also vary depending on the broker and the type of option.
Discounts and Promotions
TD Ameritrade may offer discounts and promotions for options trades. For example, they may offer a reduced commission fee for a certain number of trades or for clients who maintain a certain account balance. It is important to check TD Ameritrade’s website or contact their customer service to find out about any current promotions or discounts.
Conclusion
TD Ameritrade charges a per-contract fee and a commission fee for options trades. These fees can vary depending on the broker and the type of option. It is important to understand the fees associated with options trading before making any trades. TD Ameritrade may also offer discounts and promotions for options trades, so it is important to check their website or contact customer service to find out about any current offers.
