While selecting a option broker, do think about following points as well.. (borkerage fee is only one of the point)..
1) How often will u be trading ?
2) What is the size of your trades i.e. in terms of contracts and amount ?
3) How much are you dependent on After Market orders ?
4) How much is margin charged ? Can you deposit your long term holdings without much of trouble to create Margin limit ? Is margin charged for net risk exposure or for maximum risk exposure..(if you create Call Spread, your net risk is limited so margin should be less but most of the broker charge margin for max risk, which is equal to risk of naked short Call position).
5) What is the timing of phone support provided by them?
6) What are the other charges (acct opening, dmat, platform, acct maintenance charge, etc).
7) How easy / difficult is to find right option chain and place the order? Does the platform how only last traded price of the option.. or it has the facility of showing bid-ask spread for the option chain?
8) Does broker allow you to trade in long term options or not.. say 6 months down the line ?
(in indian mkt you get real bargain in far month options.. eg. if you are paying 200 for Nov call, in 400 you can get Jan-09 Call. You can buy that call, and create calender spread).
9) What is the downtime of their site in the night ? When can u create after market orders which will not be deleted by their End of Day processing.
10) How much is brokerage charged ? Does it fit your trading requirement? How will brokerage hit you for increase or decrease in your trading volume?
11) How easy/difficult is it to transfer and withdraw the money from your trading acct to bank account?
12) Does broker contact you before squaring off your position during extreme market conditions? Which position they will square off first (most of the we loose the best holdings and end up keeping the poor performing stocks in our acct).
13) Can you place Stop loss orders on options ? Can you bundle 2 or more option chains and place one order to create advance options positions (call spread, straddle, strangle etc).
14) What type of reports do they provide and does it meet your requirement? Is there any flexibility in creating the reports ? Can you export that to Excel? Does this reporting help you in year end tax filing etc.
Evaluating a broker just on the basis of cheapest commission, IMHO, is not the right approach. Most of the time, you get what you pay for. Remember, brokers business to maximise earing from brokerage and like any other busines, they tell only partial story to attract customers. Smart customers know what they want and hence they can find the best deal.
Happy Trading.