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Last Updated: October 2019
Overview of Options Trading Commission Pricing
In this section we compare the commissions and fees associated with options trading. Trading in options is generally for more advanced investors for many reasons one of which is that there are many more complex transactions that can take place using options contracts. If you would like to learn more about options trading, we highly recommend you visit the Options Industry Council (OIC) website here.
While all Canadian discount brokerages offer options trading capabilities, the pricing between brokerages varies substantially. In addition, options commission pricing is also very complicated compared to equity (stock) trading commission pricing.
All the discount brokerages charge commissions for options trading on a “per contract” basis, meaning they charge commissions based on how many options contracts are purchased. The fee that is charged per contract can be a fixed dollar amount, or the fee can vary depending on the price of the option itself. Some discount brokerages also charge a fixed commission amount (what we refer to as a “base commission fee”) per options trade regardless of how many contracts are purchased, whereas other discount brokerages will not have a base commission fee, but instead have a minimum charge per trade. Be aware that while most discount brokerages have the same pricing for US or Canadian options commissions, certain brokerages have different per contract pricing depending on whether the option is Canadian or American.
In addition to commission fees for buying or selling options contracts, Canadian discount brokerages also charge fees for exercising or being assigned an options contract. In our pricing table, we are assuming the underlying instrument of the option contract is a stock. Exercise/assignment pricing is a bit more complex than options commission pricing because the exercise/assignment usually involves the purchase/sale of an amount of stocks. The price you pay for exercise/assignment can be a simple flat fee, or there can be variable pricing that depends on your trading activity level, the price of the stock at the time of exercise/assignment, the number of shares involved or a combination of these.Next Page: Conclusion