Commissions, per contract

Options costs begin with the commission, and the options commission behaves unlike a share's: it is charged per contract, on both legs, and measured against premiums that can be small - so it looms largest exactly on the cheapest options.

Per-contract pricing

• Charged per contract: most brokers charge a fee per option contract, so a position's commission scales with the number of contracts - and both entry and exit are charged, per the platform's both-legs discipline.
• Large against cheap premiums: a per-contract fee is a large fraction of a cheap option's premium and a small fraction of an expensive one - so the far-out-of-the-money lottery tickets carry the highest commission relative to what they cost.
• Multiplied by legs: a multi-leg position (module 5) is charged per contract per leg, so its commission is the sum across all legs - and complex positions accumulate commission the reader must count.

Why it matters more here

A share commission is measured against the share's whole price; an option commission is measured against a premium that may be a fraction of it - so the same fee is proportionally far larger. The reader buying cheap out-of-the-money options is paying commission that can be a meaningful slice of an already-low-probability bet, on both legs, and every contract. This is the free-that-isn't lesson sharpened: options commissions are visible and per-contract, and on the cheap options retail favours, they are a real drag that the low premium makes proportionally severe.

The costing habit

Count commission per contract, per leg, on both entry and exit, and measure it against the premium - not the underlying's price - to see its true proportional weight. A position in many cheap contracts can pay more in commission than the position's edge justifies, and the all-in cost (lesson 9) assembles it with the spread and the other frictions. Commission is the most visible options cost and the easiest to underestimate, because per-contract pricing on small premiums produces a proportional drag that a glance at the fee alone hides. Read it against the premium, and its real size appears.