What is "per leg" and "per contract" pricing?

Question

I'm looking to start investing money in stocks. And i found the website zecco.com with what appears to be very low pricing. It is listed as $4.50 per leg + $0.50 per contract. What exactly does this mean?

Answer 1

The first answer is correct that this pricing refers to options, not stock. With stocks, you buy or sell shares. With options, you buy or sell contracts.

Here is an example of an options trade I did some time ago:

http://messages.yahoo.com/Business_%26_Finance/Investments/threadview?m=tm&bn=4686677%23optiontradestraderecommendations&tid=3318&mid=3318&tof=5&frt=1

It was a single trade, what is known as a spread order, in which I bought and sold options simultaneously.

The order had two legs. One leg was the Feb $5.00 puts and the other leg was the Feb. $7.50 puts. (There is one leg for each DIFFERENT option involved in the trade.)

The order had a total 200 contracts, 150 of the Feb. $5.00 puts and 50 of the Feb $7.50 puts.

If I had made the trade using the commission schedule in your question, my total cost for the trade would have been

($4.50 x 2) + ($0.50 x 200) = $109.00.

Answer 2

As Per Contract

Answer 3

Zecco I believe also allowed you to buy options. In Stock normally this term is not so significant because when you trade stock you either buy or sell. When you buy a stock is consider a leg. when you buy 2 different stock than you are buying 2 leg.

But this will means a lot when you are trading options contract
As you see in options there are selling put and selling call, there are also buying put and buying call, to make it worse is that different put of different expiry calendar.

so when it means per leg means any one position you take you will have to pay $4.50

Hope that this is clear

Answer 4

Yes it is another tax on the poor ~ the people with money (MP's) will not worry about the increase, they have more than enough of the peoples money ~ but they are always looking to get more and they will not take from the rich, because it's the rich who fund the government in exchange for being looked after ~ so they take from the poor who are in no position to fight for themselves ~