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American Style Options Assignment Fee


FINRA trading activity fee (TAF)
$0.0001191
Index option fee (IOF)Price varies. See chart below.



1. FINRA levies a Trading Activity Fee (TAF) for sales of covered securities that we pass through to you. The FINRA TAF for sales of equity securities is currently $0.000119 per share with a per-transaction cap of $5.95. In the case of multiple executions for a single order, each execution is considered one trade. For example, if you sell 1,000 equity securities the fee would be the number of shares 1,000 multiplied by $0.000119 which equals $0.119. The FINRA TAF for option sales is currently $0.002 per contract. For example, if you sell 100 options contracts, the fee would be the number of contracts 100 multiplied by $0.002, which equals $0.20. The FINRA TAF for a covered TRACE-eligible security (other than an asset-backed security) and/or municipal security is $0.00075 multiplied by the number of bonds, with a maximum charge of $0.75 per trade. For example, if you sell 100 bonds, then the fee would be $0.075.  Please note FINRA TAF Fees are subject to change.

Index option fee (IOF)

Underlying SymbolDescriptionFee Per Contract
SPXS&P 500 Index$0.53
RUTRussell 2000 Index$0.18
VIXCBOE Market Volatility Index$0.36
OEXS&P 100 Index (American-style exercise)$0.40
XEOS&P 100 Index (European-style exercise)$0.40
DJXDow Jones Industrial Average Index 1/100$0.18
NDXNASDAQ 100 Index$0.14

Please note IOF fees are subject to change.

The fees charged by E*TRADE related to a transaction for the account of Customer are designed to offset third-party fees generally charged to E*TRADE in respect of such transactions, including without limitation any regulatory or transaction fee or tax, market center fee, clearing house fee or depository fee, assessed by any regulatory authority, self-regulatory organization, market center, clearing house, clearing agency or depository, including without limitation the SEC, FINRA, any national securities exchange or other market center, DTC and NSCC. E*TRADE shall have the right to determine such fees in its reasonable discretion, and such fees may differ from or exceed the actual third-party fees properly paid by E*TRADE in connection with any transaction. These differences may be caused by various factors, including, among other things, the rounding methodology used by E*TRADE, the use of allocation accounts and transactions or settlement movements for which a fee may not be assessed, timing differences in changes, third-party rate caps and floors, calculation errors and various other anomalous reasons.

Home / Stock Option Basics

Option Exercise & Assignment


Exercise

To exercise an option is to execute the right of the holder of an option to buy (for call options) or sell (for put options) the underlying security at the striking price.

American Style vs European Style

American style options can be exercised anytime before the expiration date. European style options on the other hand can only be exercised on the expiration date itself. Currently, all of the stock options traded in the marketplaces are American-Style options.

When an option is exercised by the option holder, the option writer will be assigned the obligation to deliver the terms of the options contract.

Assignment

Assignment takes place when the written option is exercised by the options holder. The options writer is said to be assigned the obligation to deliver the terms of the options contract.

If a call option is assigned, the options writer will have to sell the obligated quantity of the underlying security at the strike price.

If a put option is assigned, the options writer will have to buy the obligated quantity of the underlying securty at the strike price.

Once an option is sold, there exist a possibility for the option writer to be assigned to fulfil his or her obligation to buy or sell shares of the underlying stock on any business day. One can never tell when an assignment will take place. To ensure a fair distribution of assignments, the Options Clearing Corporation uses a random procedure to assign exercise notices to the accounts maintained with OCC by each Clearing Member. In turn, the assigned firm must use an exchange approved way to allocate those notices to individual accounts which have the short positions on those options.

Options are usually exercised when they get closer to expiration. The reason is that it does not make much sense to exercise an option when there is still time value left. Its more profitable to sell the option instead.

Over the years, only about 17% of options have been exercised. However, it does not mean that only 17% of your short options will be exercised. Many of those options that were not exercised were probably out-of-the-money to begin with and had expired worthless. In any case, at any point in time, the deeper into-the-money the short options, the more likely they will be exercised.



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