What we are looking for in an ideal brokerage is to have a great trading platform, the ability to get filled inside the bid/ask spread, and low commissions–that's a rare combination, but fortunately, it exists.
Back in 2009 *TD Ameritrade bought thinkorswim–an options specific trading platform. They are great for stock trading, futures and forex, but they really shine with options. For quite a while now thinkorswim has had the best platform for options trading and they are continuously improving it. Plus they are one of the only companies that can consistently get us filled inside the bid/ask spread. Most of the other brokers–especially the really low commission ones–sell their order-flow making good executions almost impossible because the brokerage is actually getting a kick-back on that full bid/ask spread, which means they have zero incentive for getting you filled inside of it.
*Thinkorswim doesn't do that so we tend to get excellent fills using their platform–in fact you can almost always get filled halfway between the bid and the ask (called the 'mark') which is a huge savings and really adds to your bottom line. One of the great frustrations for subscribers is when I get better fills than they do on our recommended trades–but when we talk to them it always turns out they are using a broker that may have good commissions, but doesn't get good fills. The solution is to open an account with TD Ameritrade which is a broker that can often get you filled inside the spread using their thinkorswim platform.
Thinkorswim is the best we've found at getting filled inside the spread, and their published rates are competitive, but if there is a possibility of doing better why not try?
Since thinkorswim has the best platform and trade fills all we needed were lower commissions to make them the really obvious choice. I started negotiating with them years ago for lower commissions for our subscribers, but it was slow going. Finally I found a good contact inside the original thinkorswim team in Chicago.
The deal we have worked out for all of our U.S. customers is especially advantageous for beginning traders and those with smaller to medium size accounts because you can get the $6.95 ticket fee waived and just pay $1.25 per contract. So trading a one contract spread is now just $2.50 instead of $8.45. That's a 70% discount and a deal that saves you money over their standard commissions all the way up to 14 contracts. That means you can really build up your account and save money while you are doing it.
We have been offered this special pricing because we are spread traders on a regular trading program, so they know that our group tends to trade more frequently than the average options trader.
For those trading more than 14 contracts per trade (7 on a spread) thinkorswim's standard commission rates are a better deal. However if you are planning on trading a large number of contracts per month it would be advantageous to let them know and ask them what their best rate is for the volume you plan on trading. Getting lower than standard rates varies on a case by case basis, but many of our subscribers with larger accounts have told us they get reduced rates based on their trading volume.
The first step toward a lower negotiated rate with thinkorswim is to go to the TD Ameritrade site using this *special link to learn about the brokerage and to set up an account.
*TD Ameritrade, Inc. and Cashflow Heaven Inc. are separate, unaffiliated companies and are not responsible for each other’s services and products.