If you’re looking for the best online brokers for trading options in addition to stocks, your search ends here. We understand that choosing which broker to use when trading options is one of the most important decisions you’ll make in your trading career – but finding the best options broker is a challenge, because there are many factors (such as fees, trading tools, research and data availability) to consider. Weighing all of these categories, we came up with a list of the seven best options brokers.
We’ve talked about how options can be a useful and versatile investment strategy for investors looking to diversify.
It’s time to make a decision and stop wasting time researching every available online platform. As traders ourselves, we know you need to minimize your total cost per contract or trade to save money, increase your profitability and make it easy to trade. So which brokers overall offer the best tools and lowest rates to options traders?
When you are thinking about trading or investing your money, whether it be in stocks, options, or bonds, you want to make a wise decision when it comes to who you use. It’s important to know that the company you use can be trusted and will help you out if you need it. The following is a list of our top recommendations for online stock-option brokers:
Best Online Stock Trading Brokers
|Option Trading Broker||Price Per Trade||Price Per Contract||Notes|
|TD AMERITRADE (ACQ. THINKORSWIM)||$9.99||$0.75||This is a favorite platform - originally ThinkOrSwim, which later on was acquired by an equally great TD Ameritrade. If you go through dough.com - you should be able to get $3 per trade and $0.75 per contract pricing, and if you take their course - they’ll automatically approve you for options trading. Expensive.|
|INTERACTIVE BROKERS||$1.00||$0.70||Whether you trade 100 shares or 10,000 shares or one contract or 100 contracts, you can’t beat Interactive Brokers on price. Period. But you require at least 2 years of trading experience to be approved, otherwise you can take the options exam!|
|OPTIONSHOUSE (ACQ. TRADEMONSTER)||$4.95||$0.50||Options House have joined forces with Trade Monster and not only offer good prices, but also a great platform. Allows beginners (with no experience) to trade selling cash secured puts and covered calls.|
|TRADESTATION||$0.00||$1.00||Considered one of the best trading platforms for true traders on stocks, options, forex... you may want to hold off until you become more experienced.|
|TRADEKING||$4.95||$0.65||Allows beginners (with no experience) to trade selling cash secured puts and covered calls and has quality educational resources to learn trading.|
|OPTIONS EXPRESS||$0.00||$1.50||Owned by Charles Schwab, this may eventually be merged fully into their product line. Allows beginners (with no experience) to trade selling cash secured puts and covered calls.|
|SCOTTRADE||$7.00||$1.25||One of the first few who set up shop as a full service brokerage. Allows beginners (with no experience) to trade selling cash secured puts and covered calls. Also allows for trading in IRA 401K.|
Ease of Use – TD Ameritrade is known for having one of the best options trading platforms of all brokers. Their trading platform offers so much for you to use, offering live updates, detailed charting software, as well as so much more. If you are someone who wants to be fully informed so that you can make the best decision possible, then TD Ameritrade can help. Not only do they offer a top of the line trading platform, but they also have a learning center with instructional videos and accounts that let you test strategies using fake money, as well as forums where you can talk with other users. So if you think you have a strategy that can make you even more money, you can test it out, risk free. TD Ameritrade tries everything they can to help you succeed.
Levels of Service – If you like to know that a company is there to help you out in case of any problems, then TD Ameritrade has many levels of service to assist you. They offer assistance in many ways such as phone, email, online as well as in person. On the website, an experienced and licensed representative can assist you twenty four hours a day, seven days a week. If you ever need any help, or are having problems, TD Ameritrade has someone that can help.
Pricing – TD Ameritrade’s prices are offered below, but in summary, TD Ameritrade has higher prices compared to Interactive Broker’s and OptionsHouse. Their commissions are higher than average, and their margin rates are lagging also. For specific details, see the table listed at the end of this article.
Ease of Use – Interactive Brokers is also well known for its great trading platform as well as its international trading capability as well. Interactive brokers trading platform is considered to be a very great platform for advanced traders to use. It offers many things for the user such as speed as well as alerts, watch lists, and live updates. Many types of options can be entered which allows the advanced user many different kinds of ways to use the platform. The platform also offers you advanced charting as well as many other things which can increase your effectiveness when it comes to options trading.
Levels of Service – Interactive Brokers offers many ways for you to get help. On top of having a quick tips section, they also allow you to contact them via chat, phone, email, as well as by fax or regular mail. They offer twenty four hour, weekday assistance, allowing you to speak to a representative. They also say that the easiest and fastest way that you can find an answer to your questions is through their website and Knowledge base. Either way, if you need an answer to a questions, any day during the week, they can help.
Pricing – Pricing with Interactive brokers is better than others, as you can see in the chart below but there are some problems such as a larger minimum investment amount, as well as inactivity fees that may turn some people off. For a full list of fees, you can look to the table at the end of the article.
Ease of Use – Thanks to its merger with tradeMONSTER in 2014, OptionsHouse now has a very fast and easy to use trading platform. OptionsHouse now has a trading platform that is very specialized to make it easy for you to use. The special interactive window allows you to see every detail of your trade including your maximum profit, maximum loss, as well as other key details about your trade. The trading platform offered by OptionsHouse will never leave you second guessing yourself, which can leave you with the peace of mind and make your trades more quickly and easily.
Levels of Service – OptionsHouse has many ways to help you in your time of need. If you have to contact them, you can do it by receiving live help, as well as contacting them by phone, or filling out a form to receive support. They have many ways to help all of their customers.
Pricing – OptionsHouse has one of the lowest commission of most brokers, which will help increase your profits. For more specific details, see the specific rates below, or check their website for more information.Commissions & Other Details Below you can find a detailed summary of each companies commissions as well as other costs. More information about other specific costs can be found on their websites.
The Bottom Line
There are many ways to get your feet wet when it comes to trading options, and the first thing you should consider is what broker to use. It is crucial that you find a broker that has a trading platform you like, as well as customer support that can assist you whenever you have a problem.
Also, when it comes to help, most of these online traders also have other assistance that they offer such as specialized resource centers with a vast amount of information to help you along on your trading journey.
All seven brokers on this list are excellent choices for options traders, but you’d be better off starting with one of the top three – TD Ameritrade, Interactive Brokers or OptionsHouse. Options can be a rewarding experience, both mentally and financially, and it certainly helps if your find the right broker who can give you a helping hand every step of the way.