In this video, I want to try to help you by explaining how I was able to lower my commission costs again last year with my broker.

Now each year around the same time I contact my broker to negotiate the commission rate I pay per option contract. I've done this consistently for the past 5 years, and each time I successfully get reduced trading commissions when I work with him.

Before I show you how I go about doing it and I'll even show you the live chat box that I used, you have to understand that you probably won't get the same exact deal that I got here.

Now I have a great commission structure but I've been with thinkorswim, my broker, more than 8 years now. I think it's really important to first say this is that you can't just assume that you're going to go to your broker after being there 30 days or 60 days or 90 days and assume that you're going to get the lowest possible commission rate.

You have to establish a relationship with them, they have to know that you're committed to them for the long haul and they have to know that you're going to be a profitable client for them. I think that's part of what we're going to go over here, but again it's just worth saying up front.

Here's how I was able to get my commissions reduced by 17%. This is the exact chat box that I used with all the times, it's right inside thinkorswim and so those of you who use the chat box and support box in thinkorswim know that this is very familiar.

Let's actually breakdown how I was able to do that. First I just started a chat and it was talking about reducing my commission cost and this is on December 24th of last year.

I first said, I've been a long time customer and I want to get my, commission rate reduced since I've traded a lot this year and I plan to continue doing so.

Now it's important here that I first said I've been a long time customer so I already established with them that I've been with them for a long time and they know they're not dealing with somebody that they just go yesterday.

Because they know, and all brokers know, that it's more costly to add a new client than it is to keep an existing client so they want to keep me around as a client. I've also said in the second part of this sentence, and I use this same kind of verbiage every single year.

I 've also said in the second part of this sentence that I've traded a lot this year and I plan to continue doing so. That also means and lets them know that I plan to stay very active in the markets and I usually am pretty active in the markets as far as trading.

They know I'm pretty active in the market and I'm going to be a means for them to generate a lot of commissions with all the trading that I've done. Then I said I spent over $4,000 in commissions alone this year so I think we can figure something out, don't you?

Now notice I didn't directly ask for them to reduce my commissions, I basically said hey I've spent a lot of money with you, why don't we try to figure something out that's mutually beneficial for both parties?

The person said, sure I can take a look at this. Do you mind holding on for a couple of minutes? I said, nope. Then I said something that's really important. I said, to be exact, I've spent $4,357 just in 1 account on commissions.

Now I did this purposely as they were holding because now they know that they are dealing with somebody who has their figures and has done their homework on how much it's been costing them for commissions.

It's not some random Joe that's coming up saying, I think I've spent about 4 grand. I'm actually telling them that I know exactly how much I've spent and they can double check on their end to match up.

They came back and said well based upon your trading volume the rate that you are on is pretty much where we would be targeting but you have been with us forever.

Notice that they immediately said, hey the rate you're at is pretty good but we also, recognize that you've been with us forever and that it's more important for us to keep you as a client than it is going to be to lose you.

They also said this which I think is important too is they said it's the holiday season so I can't just say no. I think that's also true. I usually do this towards the end of the year because I know the brokers are watching their numbers for next year and they want to end the year with a good year.

That's usually about the time that people are starting to make changes towards the end of the year or the beginning of the year with new accounts or closing accounts so they want to keep you around.

He said, just give me a few moments I think I can find some discounts. He said okay here's what I can do, I can bring your equity option trading rate down to 135 per contract from the current 150 per contract.

That's great, they've already offered to reduce my commissions. He then said, I can also change your futures rate from 2.50 flat to $1.50 plus fees, which basically means that they're reducing it by a little less than $1.

He then said, this would be a discount for you because the ES option charges a 57 cents so the total cost for those would be 2.07 so again, a little less than a dollar.

He said, let me look at this for a second, or I said let me look at this for a second, letting them know that I was going to review this, kind of do the calculations on my own, see if this actually made sense.

Then I came back with them and said this, this is that second to bottom line here highlighted in yellow. I said, can we make the equity option rate around 125 instead? Notice that I didn't initially accept their first offer and this just goes to regular negotiations, right?

The first party that throws out their offer then they know that they should be leaving room to negotiate down even further. As soon as I knew that they threw out a $1.25 per contract I know that they also had additional room to move further down if needed in the contract price.

Notice I didn't ask for them to move down another 30 cents or another 50 cents. I just asked for another 10 cent reduction on just the option equity rate that I'm being charged.

He said well I can't be a Scrooge, sure I can get that updated for you. Then we ended and said, great that will take 5 minutes to get it all set. I said, great thanks have a good day.

You can see this is the exact conversation that I had with him all timed out here but it's more important that you understand how we set up that negotiation with them. We didn't just go to the broker and call them up and say, hey I want my commissions reduced.

Because everybody wants their commissions reduce. You have to go there with a strategic plan in place to reduce commissions. What I want you to do is talk to your broker.

If you've been with them for a little while, a long time, whatever the case is. Try to all them up and try to chat with them.

See if you can get your commissions reduced, use this sort of structure and framework for reducing your trading commissions both on stocks and on options and then come back here and leave a comment, let me know if works for you.

As always I hope you guys enjoy these videos, if you have any comments or questions, please add them right below and until next time happy trading.