Best options trading platforms for investors looking to expand their portfolio

Best options trading platforms for investors looking to expand their portfolio


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Options trading is an advanced investing strategy that allows investors to take their portfolios to the next level. Options have more risk than most investments, but also offer an excellent opportunity to increase your profits or hedge your portfolio risk.

But if you’re ready to start trading options, you might notice that this trading strategy isn’t available through every online brokerage firm, and the fees can vary from one broker to the next. Here are some of the best options trading platforms on the market right now.

Best Options Trading Platforms

TD Ameritrade

TD Ameritrade is one of the largest brokerage firms on the market. It’s been serving customers for almost 50 years and was one of the first to offer online self-directed investing. The broker offers affordable online options trading at just $0.65 per contract, as well as plenty of online education and analytics tools to help you understand options trading.

Key Features

Low fees: TD Ameritrade offers no commission and a low $0.65 fee for options contracts.

Options statistics: TD Ameritrade’s online tools allow you to use options statistics to create your strategy and identify potential price movements. You can also weigh the potential risk and reward of your trade by testing various “what-if” scenarios.

Broker-assisted options: If you’d rather not go it alone, you can have a broker assist you in options trading for an additional $25 per contract on top of the existing $0.65.

Education: TD Ameritrade offers a variety of educational tools and resources to help you learn about options before using them.

Who It’s For

TD Ameritrade is perfect for investors who want advanced tools, including options statistics, probabilities and the ability to weigh multiple scenarios.

Pros

  • No commission and low contract fee on options trades
  • Free options statistics and analytics tools
  • Broker-assisted options trading is available

Cons

  • TD Ameritrade’s advanced trading platform may be too difficult for beginner options traders


E*TRADE

E*TRADE was founded in 1982 and began online trading just a year later, making it a veteran in the online trading space. The company, now owned by Morgan Stanley, offers commission-free trading and affordable options contracts that make it an attractive option if you’re looking for an options platform.

Key Features

Low fees for equity and index options contracts: You pay just $0.50 a contract when buying more than 30 trades a quarter. If buying less, it’s $0.65 per contract. 

$1.50 fee for futures options contracts: If trading futures, E*TRADE charges a reasonable fee. 

Advanced trading tools: E*TRADE offers award-winning trading tools for options including the ability to weigh risk and rewards, create a customizable options chain, hone your strategy and more.

Dime buyback Program: E*TRADE allows you to close short options positions without a contract fee if they’re priced at $0.10 or less.

Cryptocurrency trading:  With E*TRADE, you can also trade cryptocurrency future options for $2.50 per contract. 

Who It’s For

Like TD Ameritrade, E*TRADE is well-suited to advanced options investors who can take advantage of its analytics and scenario tools. Because E*TRADE offers discounts for high trade volume, it’s also best for those who plan to trade 30 or more options contracts per quarter.

Pros

  • Cheaper options trades for those with more than 30 trades per quarter
  • Advanced options trading tools
  • Ability to trade crypto futures

Cons

  • More expensive options trading for those with fewer than 30 trades per quarter
  • Futures options are more expensive


TradeStation

TradeStation has one of the most powerful online trading platforms on the market. Like many other platforms, it offers commission-free trading and some of the most advanced trading tools. TradeStation specifically offers a robust options trading tool with plenty of educational resources to help you get started.

Key Features

Fee structure: TradeStation charges between $0.50 – $0.60 for equity and index options contracts, and $1.50 fee for futures options contracts.

Multiple account structures: When you sign up for TradeStation, you can have either a TS GO or TS SELECT account depending on your initial deposit. TS GO customers get cheaper options contracts.

OptionStation Pro: TradeStation’s desktop platform provides advanced trading analytics and the ability to run different scenarios before quickly placing trades. 

Educational tools: TradeStation offers plentiful educational tools and resources to help you learn options trading, including a free downloadable guide.

Who It’s For

TradeStation offers plenty of advanced analytics features, making it perfect for investors who can take advantage of them. Because TS SELECT customers get cheaper options contracts, TradeStation is especially affordable for those who can meet the funding requirement for a TS SELECT account.

Pros

  • Discounted options contracts for TS GO customers
  • Highly customized trading and analytics features
  • Cheap options contracts compared to competitors

Cons

  • You pay more for options contracts when you’re a TS SELECT customer
  • Large minimum balance to become a TS SELECT customer


Tastyworks

For many online trading platforms, options contracts are just one of the investment products they offer. But for Tastyworks, options are their bread and butter. The founders were options traders at the Chicago Board Options Exchange and helped pioneer options trading for retail investors. As a result, it’s no surprise they have an excellent options trading platform.

Key Features

Fee structure: Tastyworks charges a $1.00 fee to open a stock or exchange-traded fund (ETF) option, $2.50 to open a futures option and $1.50 to open a micro futures contract.There is no closing commission on options trades.

In-app trading inspiration: Tastyworks allows you to see exciting new trades to help inspire you for your next options trade.

Tech features: Tastyworks has a variety of trading and analytics features, including curve analysis, quick roll, order adjustments and more.

Who It’s For

Tastyworks has a unique pricing structure where you pay a commission to open a contract, but not to close one. They also cap the commission at $10, which can reduce costs for higher-volume options traders.

Pros

  • Focus on options trading
  • No closing commission on options trades

Cons

  • Higher per-contract fees
  • Could be confusing for new options investors


Interactive Brokers

Interactive Brokers consistently ranks as one of the top trading platforms for options and other securities because of its transparency, low trading fees, and trading tools and analysis. They offer both tiered and fixed pricing structures, where you’ll either pay a fixed per-contract amount or an amount that’s based on your options trading volume.

Key Features

Fixed and tiered pricing: Interactive Brokers charges a $0.65 fee for options contracts with fixed pricing, and $0.15 – $0.65 fee for options contracts with tiered pricing.

OptionsTrader: OptionsTrade is Interactive Broker’s robust trading tool where you can create and manage your options orders.

Options Strategy Builder: The company has strategy tools to help you plan your next trade, access different trade combinations, forecast, and more.

Who It’s For

Interactive Brokers is ideal for sophisticated active traders who can take advantage of their robust tools, as well as those with IBKR Pro accounts who can enjoy the tiered pricing.

Pros

  • Tiered pricing allows for more affordable contracts for high-volume traders
  • Tools dedicated to options traders
  • Educational tools and resources

Cons

  • Advanced trading platform may be too confusing for beginners
  • Complicated pricing structure


Robinhood

Robinhood is a well-known trading platform used by retail investors. Its commission-free investing made it popular during a time where few were offering that. It focuses on the investments enjoyed by active traders, including stocks and options contracts. Robinhood has the simplest platform of all the brokers with the fewest tools and resources, but it has the benefit of entirely free trading.

Key Features

No commission or contract fees: Unlike other platforms on this list, Robinhood does not charge fees for options trading. 

Easy to use app and interface: While many companies offer robust but complex interfaces for traders, Robinhood’s app is streamlined for ease-of-use.

Who It’s For

Robinhood is for the investor who wants a simple platform and no commission or contract fees.

Pros

  • No commission or fees
  • No account minimum
  • Simple and easy-to-understand interface

Cons

  • Limited customer support
  • Limited educational tools and resources


Webull

Similar to Robinhood, Webull is a simple online brokerage firm that offers commission-free trading on select types of securities, including Webull. The service appeals to investors who prefer to do their trading on the app. Despite its simplicity and mobile-first attitude, Webull still offers an in-depth analysis tool to help you plan your trades.

Key Features

No commission or contract fees: Webull does not charge fees for options trading. 

In-depth analysis tool: Webull partners with Nasdaq to bring premier market data to its customers.

Who It’s For

Webull offers the simplicity and fee-free trading that Robinhood offers, but with more in-depth analysis tools to help investors learn the market.

Pros

  • No commissions or contract fees on options trades
  • Simple, easy-to-use platform
  • In-depth analysis tool

Cons

  • Fewer analysis and educational tools than some competitors

How Did We Choose Them?

With all of the trading platforms on the market today, you may be wondering how we choose the trading options platforms on this list. Two of our priorities when crafting this list were fees and analysis tools. 

Some platforms like TD Ameritrade, E*TRADE and TradeStation really shine in both areas. Each offers affordable contracts with excellent digital tools. Other platforms, such as Robinhood and Webull, have less robust tools but fees that simply can’t be beaten.

Where Can You Practice Options Trading?

Options is an advanced trading strategy that comes with more risk than simply trading stocks. Because of that, it’s important that you fully understand how these investments work before you get started. Options trading simulators allow you to practice trading options. You’ll get to know exactly how these contracts work, how to execute them and what the potential risks are. 

Two of the best platforms to practice trading options and learn the ropes are TD Ameritrade’s paperMoney platform and E*TRADE’s Power E*TRADE. If you plan to use TD Ameritrade or E*TRADE for your options trading, you’ll already have a good understanding of the platforms.

Find out more >>> An Overview of Options Trading

The Bottom Line

Options trading can be confusing and definitely isn’t right for beginner investors, but it can be an exciting investment strategy once you’re prepared. Part of being prepared for options trading is finding the best options trading platform.

While not every online broker offers options trading, there are many excellent choices to choose from. Each one has something unique to offer, so when you’re choosing a platform, be sure to consider your specific needs. Some platforms are better for beginners, thanks to their educational resources. Others are perfect for experienced pros and offer advanced analysis tools. The good news is that there’s a platform for every options trade.



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