8 Ways to Reduce Your Commission Costs
Ken Trester, October 8, 2009
Free Trading Guides
-
In almost any sport, there are admission fees and expenses that must be paid to play the game. In the options game, these expenses are high. In fact, the commission costs are one of the major criticisms of trading.
A moderately active options portfolio will generate from 10% to 30% of the value of that portfolio in the form of commissions per year. In other words, if you have a $10,000 options portfolio, at the end of your first year of trading, you may incur commission costs running from $1,000 to $3,000. So, if you do not earn more than $1,000 in that account, you lose.
However, there are ways to avoid and reduce high commission costs, and means of instituting defenses to protect yourself against them.
More By This Expert
Use Limit Orders on Options Trades
If buying inexpensive options makes you 'cheap,' then profiting from them must make you 'rich'!
Short-Term Gains Using Long-Term Options
Stock options are excellent speculative vehicles and can be inexpensive to boot!
The Thrill of Expiring Options
A diligent trader can make big money buying expiring options. But you have to be ready to move quickly.
How to Initiate a Credit Spread
We'll show you how our subscribers made a $400 return in less than two weeks with this two-step strategy.
4 Factors in Play With Options Trades
Frenzied market activity and volatile price action can be a option trader's friend or foe.
