On the Options Cafe home page, we compare our pricing to other brokers on a per year basis by adding up all the commissions another broker would charge based on your type of trade, number of trades per month, and the lot size of your trades.
This tool is intended for a quick comparison. Brokers may change their pricing without notice. If you are concern please always verify our numbers to the pricing marketed by other brokers directly. Some brokers provide discounts for volume -- we did not take this into consideration.
In the case of Tastyworks, we took their pricing and cut it in half since Tastyworks does not charge closing trades. For example, we assume if you enter in 20 trades per month 10 are opening trades and 10 are closing trades. To compare we cut Tastyworks' commissions by 50% but assumed they charged for closing trades.
When comparing other brokers Options Cafe is priced at a fixed amount. Since Options Cafe is commission free you can trade all you want and not pay a penny. The only cost is the monthly or yearly subscription to Options Cafe
What is a trade lot?
A lot is the quantity of the trade you are putting on. For example, a vertical spread with a lot of 4 is selling 4 contracts and buying 4 contracts for a total of 8 contracts. An Iron Condor with a lot size of 2 is buying 4 contracts and selling 4 more for a total of 8 contracts. If you are just buying or selling an option your lot size will be the number of contracts you are trading.
Dedicated options platform?
We consider a broker to have a dedicated trading platform if the broker specializes in options trading or has software targeted towards only options trading. This is what makes Options Cafe special we are one of the only providers that has a focus completely on options trading.