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For traders specifically looking to trade options, choosing the best options trading platform can be particularly crucial. Most major brokers have options trading capabilities, but not every platform is geared specifically toward options trading. Below, we're taking a look at the top choices for these trading platforms, from free options trading to paid platforms.
Quick Look at the Best Options Brokers:
- Best for Short Selling: TradeZero
- Best for Global Traders: Interactive Brokers
- Best for Options Spreads: Options AI
- Best for Advanced Traders: TradeStation
- Best for Day Traders: TD Ameritrade
- Best for Options Education: Tastyworks
- Best for Beginners: Olive Invest
Compare Brokers for Options Trading
Low commissions are just the tip of the iceberg when it comes to choosing the best option trading platform. Traders need to consider hidden fees, such as platform fees and data fees.
Different traders have different skill levels, trading strategies, and needs. Options trading can be complicated, and beginners need to make sure to find a platform with plenty of educational resources and guidance. Advanced traders need to look for professional-grade features and research. Before choosing the right broker, each trader needs to consider his or her trading style and which features are most important in maximizing profitability.
Here’s an overview of some of the top option-trading platforms based on several different criteria.
TradeZero is dedicated to making powerful trading tools as accessible as possible. You can trade for free or step up to more advanced plans when you have more money to invest.
If you need more trading power, paid orders are only $0.0003 per share. Outgoing ACH transfers are just $5, and incoming wire transfers are free. You can read more about the low prices at TradeZero here or check out a full review of the platform here.
2. Interactive Brokers
Did you know that Interactive Brokers’ clients trade 10x more options than at other brokers? This comes as no surprise, as Interactive Brokers offers commissions on options from as low as USD 0.15 per US options contract. The IBKR Mobile App provides a seamless options trading experience for traders who want to manage their options on the go. They also offer sophisticated options trading tools through their professional trading platforms such as the Options Strategy Builder, which allows traders to create multi-leg combo orders on the fly.
3. Options AI
If you're an experienced options trader looking for a visual, innovative platform, Options AI may be right for you. Newer investors can also benefit as the platform is great for upgrading to spreads.
Options AI includes Chart Trade, Fast Trade, and Trade Scanner. These features allow you to set a profit zone, generate credit or debit spreads, compare ways to trade any view, filter categories and scan for trades based on probability of profit or expected moves.
Fund your account and qualify for rewards that include commission-free trading and more.
TradeStation is for advanced traders who need a comprehensive platform. The brokerage offers an impressive range of investable assets as frequent and professional traders appreciate its wide range of analysis tools. TradeStation’s app is also equally effective, offering full platform capabilities.
5. TD Ameritrade
There’s no better place to get started trading options than TD Ameritrade. Right off the bat, TD Ameritrade’s $0 account minimum makes the platform accessible to every options trader. The Trade Architect platform provides a simple, easy-to-navigate trading environment that isn’t intimidating for new options traders and provides easy order execution.
TD Ameritrade recently completed an acquisition of Scottrade, which will provide options traders with another level of flexibility as well. Right now, TD Ameritrade charges $0 fin options based fess and $0.65 for options per contract.
Tastyworks allows opening of an individual, entity/trust or joint account, and the account type held with the brokerage can be margin, cash or retirement. In margin trading, you are allowed to trade with borrowed capital, facilitating the use of all trading strategies available with the broker, while a cash account requires that you fully fund transactions, and also restricts usage of some trading strategies such as spread and uncovered options.
7. Olive Invest
Olive Invest was designed to make options trading easier for the investor, using AI and machine learning technologies to produce better strategies. You don’t have to do the math when Olive can do it for. Plus, you get recommendations for trades made by professionals, allowing you to take a profitable path so that you can focus on income generation, increasing profits or specific entries into the market.
Best for beginners, anyone can use this platform to refine their options trades. Additionally, there are several educational tools on the site that teach you about the options market—one that’s often misunderstood by the public.
Remember, Olive Invest isn’t a brokerage. You connect through a secure API to your broker and make trades based on the recommendations you get. After a 2-week trial, you can purchase access to Olive for a monthly or yearly rate in an effort to improve your portfolio.
What is Options Trading?
When it comes to the stock market, most people think no further than buying and selling individual stocks. Truthfully, the process of options trading isn't much different than stock trading.
However, an option is simply a contract to buy or sell a stock at a pre-negotiated price and by a certain date. Simple as that. Learn more about how to trade options.
Options traders bet on which direction they think the price of a stock will go. Options contracts can be based on a wide variety of underlying securities, however, and many different types of orders can be placed, which makes them more versatile than stocks.
For example, those trading options can decide whether the prices could go up or down on the following:
- Individual Stocks
- Foreign currency
Make sense? Sure, it does.
Buying and Selling Options
To buy options, you simply choose exactly what you'd like to buy and how many, and then place a buy to open order with a broker. If your order goes up or down in value, you have some options. At any rate, you can:
- Sell at the agreed-upon price
- Sell the contract to another investor
- Let the contract expire
Enter calls and puts, too.
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