TD Ameritrade 300
5-star brokerage rating

Online Broker With Lowest Options Assignment and Exercise Fees



Options Assignments and Exercises Fees


Understanding option assignments and exercises is critical if you're going to trade option contracts. Suppose you buy a call option. This gives you the right, although not the obligation, to purchase the underlying stock on or before the expiration date at the strike price specified by the option contract. When you decide to exercise this right and buy the stock at the strike price, that's called exercise. Assignment occurs when the writer of an option contract is ordered by the clearing house to buy the underlying stock from the option holder (in the case of a put option), or sell the underlying asset to the holder of the option (in the case of a call option). Online brokers charge fees for assignments and exercises.


Lowest Options Assignment Fee


Broker With Lowest Options Assignment Fees


Ally Invest offers the lowest options assignment fee of all discount brokerage firms - $0. The firm also has the lowest options exercise fee - $0.

If Ally Invest has a specialty it is in the options trading business. From their simple and fair pricing ($0 ticket and 50 cents per contract) to the many analytic tools available, an options trader can find all that they need on the site. The screening and pricing tools are too numerous to list in detail, but most impressive are the calculators for probability analysis as well as option profit and loss displays, which will show projected option value for a specific increase or decrease in the underlying stock price, or changes in volatility. All of this is perfect for option traders who know how to use these functions to minimize risk and maximize profit. If one is new to options, Ally Invest also offers education on the site dealing with strategies and option combinations to give all the information needed to begin trading.

For the last 5 years Ally Invest received 4 out of 5 stars in Barrons stock broker survey of the U.S. brokerage firms based on Trade Technology, Usability, Mobile, Range of Offerings, Research Amenities, Portfolio Analysis & Reports, Customer Service & Education, and Costs. The Barrons also named the firm "Best for Options Traders" for the last seven years. We repeatedly rated Ally Invest one of the Best Options Brokers, based on brokerage company's low options pricing as well as on its suite of great tools for options traders.


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Ally Invest Fees and Commissions


Ally Invest's (also known as TradeKing) clients pay $0 to buy and sell stocks and ETFs. This low, flat fee is valid per transaction and is good for any number of shares. Options are $0.65 per contract plus the $0 base charge. A single-leg charge is applied to multi-leg trades. Short options with a premium of $0.05 or less can be closed commission-free.


Ally Invest Options Assignments and Exercises


At Ally Invest, option exercises cost $0, while option assignments are $0.





Ally Invest Option Research and Order Placement


There are some good informational tools on the Ally Invest website for derivate traders. A good place to start is with option chains. This tool appears on the website under the tab 'Quotes & Research' and is also available on Ally Invest LIVE, the broker's trading platform. Typing in a stock's ticker symbol displays call and put options that are near the money. This means the options' strike prices are close to the current stock price. The search tool on the website also allows for options that are away from the money to be displayed. Ally Invest LIVE has the same capability, although scrolling through the results is somewhat cumbersome. Hovering over a bid or ask price of an option produces buy and sell buttons for quick order entry. Alternatively, clicking on an empty square on the left side (calls) or right side (puts) produces a buy (one click) or sell (two clicks) order. Clicking on 'Trade' produces the order ticket. Besides regular calls and puts, Ally Invest's search tool also displays option strategies, such as collars, straddles, and diagonals.





Ally Invest also offers volatility charts and an options calculator. On the firm's trading platform, there is a probability calculator and a profit/loss graph. An options scanner, hosted by ivolatility.com, can be launched from the Ally Invest website.





Every Monday afternoon, the broker hosts a live on-line options webinar to discuss options news for the week. Customers can sign up on the Ally Invest site after logging in.





Beyond the website and Ally Invest LIVE, option chains and order placement are available on the broker's mobile app. Traders can use Apple, Android, and mobile web. Unfortunately, sophisticated option research tools are not available on the mobile platform.





Awards


The financial publication Barron's has awarded Ally Invest 4 out of 5 stars for the past five years in the newspaper's annual broker rankings. Ally Invest did especially well in the categories of range of offerings, mobile platform, research amenities, and education, security, and customer service. Ally Invest scored 4 out of 5 stars in the category of Best Broker for Options Trading. We also have regularly graded Ally Invest as one of the Best Options Brokers. Our analysis is based on Ally Invest's options trading technology and low commissions.


Comparison


Ally Invest is very competitive among option brokers. In the Barrons ranking mentioned above for option brokers, only TD Ameritrade and Interactive Brokers, scored higher, each receiving 4½ stars out of 5. TD Ameritrade charges $0 plus $0.65 per option contract, while Interactive Brokers has a more complicated commission schedule. Each account must spend at least $10 per month in commissions while the option commission for many orders is around $0.50 per contract with a $1.00 minimum.


Best Broker For Options Trading Summary


Option traders have excellent tools at Ally Invest at a very good price. Other option specialists, such as optionsXpress, don't offer the same value as Ally Invest. With good tools for other investments, such as ETFs, mutual funds, and forex, this broker is hard to beat.


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