Negotiate Lower Commissions at Charles Schwab: Reduced Fees on Options and Futures Trades


Negotiate Lower Commissions At Charles Schwab


Whether you are new to investing or a seasoned veteran, you will know that commissions are an important concern when calculating your trading costs.

Many brokers nowadays follow a zero-commission pricing model, but what many don’t realize is that the commission-free approach most commonly applies to stocks and ETFs. Other securities still have commissions attached to them.

The good news is there is a way to reduce your commissions. It doesn’t always work, but here’s how the process is handled.


Types of Commissions at Charles Schwab


We will show you how we go about securing lower commissions at Charles Schwab, but first, let’s look at the commissions you’ll run into at the broker.


Current Commissions for Online Trades


- The following are commissions for online trades at Charles Schwab.
- U.S. exchange-listed Stocks, ETFs, Schwab Mutual Fund, & Treasuries have 0 commissions.
- Other mutual funds have a $74.95 commission fee.
- Foreign stocks have a $50 commission fee.
- U.S. OTC market securities have a $6.95 commission fee.
- Options for U.S. stocks and ETFs have a $0.65 fee. This fee is charged per contract.
- Futures and options for futures each have a $2.25 commission. This fee is charged per contract.
- Secondary bonds, CDs, & Zero-Coupon Treasuries cost $1.


Commissions for Broker-Assisted Trades


If you prefer trading live through your broker, you will pay the listed commission rate plus a $25 broker assistance fee. The $25 fee applies to all transactions, including trades with zero-commission securities.

Here is the complete fee schedule for trading at Charles Schwab:


Charles Schwab commissions


Schwab Competitor Commissions


Broker Review Promotion
Offer
Stock/ETF
Commission
Mutual Fund
Commission
Maintenance
Fee
Annual IRA
Fee
Firstrade Get 2 FREE stocks and $0 commission in ALL trades! $0 $0 $0 $0
Ally Invest Up to $3,000 cash bonus + $0 commission trades. $0 $9.95 $0 $0
WeBull 12 FREE stocks valued $34-$30,600 give-away at Webull. $0 na $0 $0


Will Charles Schwab Reduce Your Commissions?


At this point, you are probably wondering which commissions you can negotiate down. Reducing your commission rates for OTC trades and options fees is possible. Commission negotiations for futures, options on futures, and foreign stock trades are more complicated.

OTC and options fees are on the high side at Charles Schwab, so for my attempts at lowering rates, I focused on those fees.

There is a specific process to begin the negotiations. Here’s how I approached the task.


Contacting the right person


The first thing to consider is the department most likely to help you lower your commissions. Charles Schwab brokers have the power to reduce anyone’s rates, but they need a good reason to do so.

- Brokers will consider lowering your rates if you;
- fund a new account with a significant amount of money,
- place a large number of trades per day/quarter/year,
- and/or are a very successful trader.


The representative you speak with will differ depending on which category you fall into.

To get started, the easiest thing to do is to call the broker at 877-769-8006. After answering a few questions, you will be connected with the department that best meets your goals. I was transferred to the active trader desk.


Making your case


Once you are (finally) connected with the best person to discuss commissions with you, it is time to make your case.

By default, the broker does not want to reduce rates. Commissions are already low compared to historic commission rates, and the broker needs a good reason to agree to a rate reduction.

In my case, I informed the representative from the ‘active trader’ desk that I place upwards of 50+ trades daily and that I was looking to fund my account with $25k. Unfortunately, that didn’t impress them as they did not offer me a reduced rate.

However, they presented me with a $100 commission rebate if I funded my account with $50k.

They gave me some advice when I asked what I could do to get reduced rates in the future. Here it is.


Commission Reduction Factors


A few main factors will significantly improve the chances of success in negotiating your commissions at Charles Schwab.


Age or Account

In most cases, commission rate reduction is reserved for customers who have been actively trading for at least a year. The more of a track record you have with the broker, the more likely they will be to your request.


Account Size

Larger account sizes also help. If you have the ability to trade numerous contracts and shares without overleveraging your account, it is easier for the broker to envision a successful relationship in the future.

The broker will only agree to a commission rate reduction if they are assured that they will still make a profit through your trade volume.


Trading History

A final factor that could affect the decision to reduce your rates is your trading success. Like the account size issue, the broker needs to see that you are a customer with staying power. If you have a record of successful trading, it could sway the decision in your favor.


Updated on 7/2/2022.


Ben Wright
About the Author
Ben Wright is an investor, a trader, an educator, and something of an explorer. He spends his days in the markets when he is not teaching or spending time with his family. Ben writes about stockbrokers, markets, investment vehicles, promotional offers, and tools that help investors make the most of their time in the markets.