Which one of the following is not a type of transaction cost in options trading?
A)all of the above
B)the bid-ask spread
C)the commission
D)clearing fees
E)the cost of obtaining a quote

Question

Quizplus · Accepted Answer

Transaction costs in options trading typically include the bid-ask spread (A), which is the difference between the highest price that buyers are willing to pay and the lowest price that sellers are willing to accept; the commission (B), which is the fee charged by a broker for executing the trade; and clearing fees (C), which are charged by the clearinghouse to cover the costs of settling the trades.
The cost of obtaining a quote (D) is not considered a transaction cost in options trading. With the advent of electronic trading and widespread access to financial information, obtaining a quote for the price of an option is generally free and does not incur a direct cost to the trader. Therefore, D) the cost of obtaining a quote is not a type of transaction cost in options trading.

Which One of the Following Is Not a Type of Transaction