Charles Schwab charges $0.65 per options contract with no base commission or exercise/assignment fee. The thinkorswim platform — inherited from TD Ameritrade — is one of the most powerful retail options trading platforms available, with paper trading, futures options, advanced scanners, and full customizability via thinkScript. Schwab is the top choice for serious options traders who want institutional-grade tools at a self-directed brokerage.
Schwab Options Fees (2026)
| Fee Type | Schwab | Fidelity | E*TRADE | Vanguard |
|---|---|---|---|---|
| Per-contract fee | $0.65 | $0.65 | $0.65 | $1.00 |
| Base commission | $0 | $0 | $0 | $0 |
| Exercise/assignment fee | $0 | $0 | $0 | $0 |
| Futures options | $0.65/contract + $2.25/futures | N/A | $0.65 + $1.50 | N/A |
Example: Entering an iron condor (4 legs, 1 contract each) costs $2.60 to open and $2.60 to close. Total round-trip cost for a 1-lot iron condor: $5.20.
thinkorswim Platform
thinkorswim (often abbreviated TOS) is Schwab’s desktop trading platform and is available free to all Schwab brokerage account holders. It is accessible via desktop application, web browser (thinkorswim Web), and mobile app.
Key Options Features
Risk Profile (P&L Graph): The signature thinkorswim feature. Visualizes your position’s profit and loss across any underlying price range at any point in time. Adjust expiration dates dynamically to see how time decay affects your position. Essential for understanding spreads, condors, and calendar trades.
Options Chain: Fully customizable options chain showing all expirations and strikes. Add Greeks columns, open interest, implied volatility, probability OTM, and custom alerts. Filter by delta range or days to expiration.
Analyze Tab: Back-test options strategies against historical data. Simulate how a position would have performed on any date. One of the most powerful educational and analytical features available to retail traders.
Scanner: Build custom scans to find covered call opportunities by yield threshold, find high-IV stocks for premium selling, or scan for specific Greeks criteria. Hundreds of preset scans available as starting points.
thinkScript: Schwab’s proprietary scripting language. Write custom indicators, alerts, and scan conditions. A large community of thinkScript scripts is freely shared online.
paperMoney (Paper Trading): Simulated trading with real market data (delayed 20 minutes). Practice any strategy — iron condors, calendars, diagonals, straddles — with no real money at risk. Reset your paper account anytime. This feature alone sets thinkorswim apart from most retail brokers.
Options Approval at Schwab
Schwab uses a tiered options approval system based on experience, financial situation, and investment objectives:
| Tier | Strategies |
|---|---|
| Tier 1 | Covered calls, protective puts, cash-secured puts |
| Tier 2 | Long calls, long puts, long spreads, short spreads |
| Tier 3 | Naked options (puts and calls), straddles, strangles |
To apply: log in → Accounts → Account Settings → Trading → Options. Complete the online agreement. Approval for Tier 1-2 is typically immediate. Tier 3 (naked options) requires margin approval and is reviewed individually.
How to Trade Options at Schwab
- Apply for options approval — Account Settings → Trading → Options (online, typically immediate for Tier 1-2)
- Download thinkorswim — free at schwab.com/thinkorswim; also available as thinkorswim Web for browser access
- Practice first — use paperMoney mode to execute your first 10-20 trades without real money
- Start with defined-risk strategies — vertical spreads and covered calls before moving to naked options
- Use the Analyze tab — always analyze your risk profile before entering a position
Iron Condor Example at Schwab
You sell an iron condor on a stock trading at $100:
- Sell 1 call at $110 strike, collect $0.80 → $80 credit
- Buy 1 call at $115 strike, pay $0.30 → $30 debit
- Sell 1 put at $90 strike, collect $0.80 → $80 credit
- Buy 1 put at $85 strike, pay $0.30 → $30 debit
Net credit: $100 ($200 collected − $100 paid, 2 legs each × 100 shares) Total commission: $2.60 ($0.65 × 4 contracts) Maximum profit: $97.40 (credit minus commissions, if stock stays between $90–$110 at expiration) Maximum risk: $402.60 ($500 spread width − $97.40 net credit)
Schwab vs Competitors for Options
| Platform | Best For | Notable Feature |
|---|---|---|
| Schwab (thinkorswim) | Advanced/active traders | paperMoney, thinkScript, risk profile |
| ETRADE (Power ETRADE) | Intermediate traders | Snapshot analysis, more intuitive UI |
| Fidelity (Active Trader Pro) | Intermediate traders | Good screener, integrated Fidelity ecosystem |
| Merrill Edge (MarketPro) | Moderate traders | BofA research for underlying selection |
For active options traders, thinkorswim has no equal among self-directed retail brokers. For traders who find thinkorswim too complex, Power E*TRADE at E*TRADE is the next best alternative.
See the full Schwab review and Schwab vs Fidelity comparison.
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