fees fees fees... surely not

[samills70]

Hi guys, I'm looking into trading options but it doesn't seem possible with a small account (looking to start with £2k) because of the insane amount of fees. Is there any way to get around being charged $15 per transaction? I see a lot of people claiming they started off with a small account but at those sort of costs you'd have to be making big plays every time just to cover the fees alone. Am I missing something or what are the tricks to getting into the game with a small account?

 

[timsk]

. . .Am I missing something or what are the tricks to getting into the game with a small account?

Hi samills70,
The trick to getting into the game with a small account is to choose a trading vehicle (e.g. options, spread betting, futures or CFDs etc.) that allows you to trade a very small position size relative to your account. In your case, that means for every pip or point movement, you win or lose a maximum of £1.00. Less is better. Ideally, the cost of the trade itself will just be the spread which, depending upon the instrument(s) you trade, ought only be 2 points at most.

I suspect (but can't be certain) that the people claiming to trade options with a small account are actually trading binary options which, although are based on options, are a different financial vehicle. Usually, there are no fees to pay of the sort you mention, but there are built-in costs and the edge very much favours the house - not you! So, if you're tempted go down this path, tread very carefully, as it's delightfully simple to get into, but very difficult to get out with a profit.
Tim.

 

[samills70]

Tnx for the response. Yeah I know about binary options and no way will I be bothering with that. I'm talking about standard US stock/commodity options trades. I guess I could sell premium to waylay the cost of the option, however even with a steep delta and a lucky break I don't see how one would get out with a profit considering the huge costs of opening and closing the positions . Oh well I guess I could do forex again but yikes... it's so nonsensical I might as well do binary options... same probability of losing money me thinks

 

[bootsyjam]

Worth looking up interactive brokers as I believe they have the best commissions for retail options traders. Bit of an unwieldy platform though