5 Best Options Trading Platforms & Brokers September 2024

Blain Reinkensmeyer, head of research at StockBrokers.com, has been investing and trading for over 25 years. After having placed over 2,000 trades in his late teens and early 20s, he became one of the first in digital media to review online brokerages. Blain created the original scoring rubric for StockBrokers.com and oversees all testing and rating methodologies. A put option locks in the right to sell a stock (or other security) at a certain price (called the “strike”) until a specific date (the expiration).

Customers can also access a wealth of information on the trading platform, including detailed FAQs and tools for answering questions and explaining diverse trading nuances. The CFD fees are added to the broker’s spreads, promoting a more affordable trading experience for users trading CFDs. For traders adhering to Islamic finance principles, the broker offers an Islamic (swap-free) account, aligning with Sharia guidelines. The commitment to client security is evident in its provision of segregated accounts, ensuring that the broker separates client funds from its operational finances. Their demo account is a masterstroke, offering a robust training ground for those looking to hone their strategies without financial risks. Lime Fx recently improved its demo trading environment with enhanced features, making virtual trading on it more aligned with actual market conditions.

While testing brokers for options trading, I also evaluated their ease of use and options education, and I looked at how well everything on an options quote and order ticket is explained. Trading tools and low costs are the prosOptionsHouse has a winning combination of low trading costs and fees plus some of the best options trading tools around. They may not offer the same additional resources as other brokers, but that wouldn’t be your primary reason for choosing OptionsHouse in the first place. Not for investing long-termA low-cost broker that targets options traders with some advanced research tools. While great for active traders, long-term investors wanting to purchase mutual funds or make a few trades a year might want to look elsewhere. This has provided OptionsHouse with access to some of the best options trading knowledge and insight, and it clearly shows.

1. It’s probably more targeted towards those that have some experience behind them, but there is opportunities here for beginners too.
2. These apps enable traders to execute trades, analyze charts, and manage their accounts from anywhere.
3. You will need to have at least a basic understanding of options trading and be reasonably active in your trading to get the best out of this platform.
4. If you are an active trader of stocks and options, finding a brokerage that is the perfect fit can be a challenge.
5. Unlike owning a stock, however, options expire worthless if the price of the stock does not make it economically worthwhile to exercise the option by its maturity date.
6. It’s not packed with complicated features, making it less daunting for beginners.

Frequent traders and those who trade a large number of contracts will be more sensitive to commissions and fees, so check out your prospective broker’s charges and make sure you understand them. When delving into options trading, selecting the right brokerage platform is critical for success. Options traders require a platform that not only offers a user-friendly interface and powerful trading technology but also prioritizes reliability and execution speed.

Schwab’s options interface allows users to pick a specific options strategy and easily choose the specific contracts for their chosen strategy. While it has become pretty standard for online brokers to offer zero-commission stock and ETF trading, Webull’s zero commissions for U.S. Exchange listed options is uncommon, and has traders looking to join the platform for the low-cost options trading. In addition, Webull fully extended trading hours to its customers, along with offering some of the most competitive APYs on uninvested cash in the industry. Tastytrade, based in Chicago, was developed in 2017 by the founders/developers of TD Ameritrade’s (now owned by Schwab) thinkorswim app, which is one of the best options analysis trading tools. Originally called tastyworks until changing its name in 2023, tastytrade has developed an excellent trading platform that offers stocks and ETFs, and an even stronger focus on options and futures trading.

This is a drawback versus some competitors who offer around the clock customer support. Lime Fx is a discount brokerage founded in 2007 and limefx scam headquartered in Limassol, Cyprus. The brand was acquired in 2015 by WhoTrades Inc, a company that promotes social trading services. Each profile on Novoadvisor shows full transparency so investors can decide whether a strategy fits their personal needs and expectations. FINAM Bank and China UnionPay are free, but only ECN accounts are able to use credit cards free of charge. With this live account, you cannot trade CFDs on shares, stocks, futures and bonds.

Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of the top online brokers and trading platforms. Instead of calling their revenue per trade “commissions,” many brokers charge per-contract fees (including some brokers who claim to have “zero commission” options trading). The exceptions are Robinhood, SoFi Invest , Firstrade and Webull, which charge no commissions or fees for options. First-time options traders deserve high-quality tools, too, but it’s easier to learn options trading when there’s fewer abbreviations on the platforms, more explanation, and less math.

Renowned for its low fees and competitive commissions, this is a trading platform that should be attractive to those who are conscious of costs and high volume traders. Lime Fxr, the deep discount broker, has throughout the years been awarded and recognized for its contributions to the online brokerage industry. Our review further indicates that you can also trade and invest in ETFs that are currently trading on the US exchanges. These can only be traded on the broker’s proprietary trading platforms where Lime Fx Pro charges $2.50 per trade but are commission-free on the Lime Fx lite platform. Also makes it possible for its clients to invest and trade more than 3,000 mutual funds listed on its platforms. Like stocks, these too can be traded on both their proprietary and third-party trading securities trading platforms.

Therefore, the out-of-pocket cost for a stock option is 100 times the price it is trading at because the contract is for 100 shares. Buying an option allows a trader to have control of 100 shares of stock by only laying out a small portion of the underlying value of the stock. It’s often the case that using mobile trading platforms means limited features. Not so with OptionsHouse, who have created a mobile trading platform that offers most of what’s available on the desktop platform. These fees are highly competitive and should be music to the ears of traders of all stripes, especially active traders who will see fees eat into their profits at other online platforms. This platform is best for more active and experienced traders who wish to trade options.

Mobile Trading

Like most online brokers today, tastytrade offers commission-free stock and ETF trading. Its fees for options trading are just $1 on the first side of a trade, and there is no charge to close out a position, which averages out to $0.50 per contract per side. Tastytrade’s pricing compares favorably to the $0.65 per contract charge for both entering and exiting an options trade that is common across online brokers today. But more importantly, tastytrade also caps option commissions at just $10 per round trip, plus a $0.10 clearing fee per contract.

Commissions, Fees & Minimum Deposit

Another common option strategy against a stock holding is to hedge the stock or ETF holding by purchasing puts against their holding. If, for example, the owner of a stock wants to keep a long-term stock holding, but thinks the stock may move lower in the short term, they can purchase a put on the stock. This way, if the stock moves lower, the put option will go up in value to hedge the losses to the actual stock holding. The downside is that the option expires worthless if the stock price stays above the strike price, but the position was protected if the stock moved lower. For the seller of puts, the option has risk limited to the stock price going to zero. Therefore, sellers of options, unless hedged, are usually exposed to significantly higher risk than the premium they received for the options.

Where can I practice options trading?

Just as the fees at OptionsHouse should appeal to all options traders, so should the trading platform. It’s completely web-based, meaning nothing to download, and it’s clean and modern looking. It’s simple to use, easy to navigate, and offers plenty of tools and features.

Best for first-time options traders – Merrill Edge

You will be hard pressed to find any options trade fees below $4.95 plus 50 cents per contract. Competitor eOptions charges a slightly lower fee that can save money for advanced, high frequency traders, but overall OptionsHouse offers a great experience with a great value. The type of options you are approved to trade and the broker’s policies will help determine the minimum investment amount required for options trading. In general, $1,000 is the minimum required deposit for level 1 (entry-level) options trading, but the minimum deposit can be at least $10,000 for level 2 or level 3 options trading. Even if the required minimum is low, it’s always a good idea to have at least $5,000 to $10,000 to start trading options.

Options trading is a form of leveraged investing and thus is inherently risky. Any time an investor is using leverage to trade, they are taking on additional risk. As such we may earn a commision when you make a purchase after following a link from our website. In the United States is licensed and regulated by both the Commodity Futures Trading Commission and National Futures Association(NFA). The discount broker is also a member limefx courses scam of the Securities Investor Protection Corporation (SIPC) that insures the investor funds deposited with Lime Fx for up to $500,000.