Brokers for options trading

The Best Options Broker.

Latest Update October 28, 2016.

The best options trading platform isn’t going to be an afterthought tacked on to an existing suite of products: it should be robust and easy to use. Beginners need enough support to learn the ropes and experienced traders are after low fees and powerful tools. We signed up, assessed the fees, took the tools for a spin, and narrowed it down to three top picks. The one that's best for you depends on what you’re after.

Tons of online and in-person support, plus a practice platform that lets you try everything out with “paperMoney.” The downside? Higher fees.

Rock-bottom pricing, but no research or strategy support.

Unrivaled tools & research with pricing that favors active traders.

There are a lot of brokers that are perfectly capable of trading options — nearly all of the big (read: old-school) names have an options platform integrated into their suite of offerings. But for those looking to really dive in, whether as a beginner just starting out or an active trader looking to level up, the best platform won’t be something that’s just tacked on.

How We Found the Best Options Broker.

To find the brokers that cater specifically to options, we looked at 36 choices and analyzed their products. We prioritized the most important aspects:

Cost matters a lot when it comes to trading options. It’s the very nature: part of the appeal of options is that the returns can be major even if you don’t fork over a lot of cash up front, and many traders use options as a cheaper alternative to going long on a high-priced stock. Fees can add up and even wipe out the profits from any profitable trades. Granted, slightly higher fees may be worth it if a broker can provide other perks (say, excellent resources and education for beginners), but we wanted all our picks to have competitive pricing. We also wanted to avoid minimum balance requirements, or a set number of trades per month.

Easy-to-use interfaces are a make-or-break for most platforms. The price of options contracts can swing a lot over the course of a trading day; poking around a clunky options chain can literally cost you.

Education and resources are important, especially for investors who are getting their feet wet. Sure you’ve got a handle on multi-leg options trades, but do you know when it’s the right time for a bull call spread? What’s an iron butterfly? Not all traders will need hand-holding, but we wanted to find at least one excellent options broker we could recommend to newcomers.

Flexibility can be interpreted a few ways. For us, it meant the robustness of the platform (could we research and purchase stocks and ETFs in addition to options?); its flexibility (could we streamline a multi-leg options trade, or did we have to input them all separately?); and whether or not we could customize it to our liking.

It was quick work to eliminate the most expensive platforms, as well as the ones that had absolutely no resources or reports. To test ease of use and flexibility, we signed up for accounts and simulated making trades on all the rest. Three brokers rose to the top, and each brings something unique to the table.

Our Picks for Best Options Broker.

Best for Beginners.

TD Ameritrade Higher fees on an ultra-easy platform. Plus, tons of support and education.

TD Ameritrade is one of the largest online brokerages in the market today, with over 7 million funded customer accounts and over $700 billion in total client assets, and despite its slightly higher prices, it provides the best platform for a beginner trading any product, options or otherwise.

For more novice traders, the platform supports the jump from trading stocks with the funds in an IRA to more sophisticated products like options. It’s robust, plus it has the customer service and educational resources to make the transition. There are webinars and hours of on-demand videos that’ll teach you about options strategies and how to literally execute those strategies on the platform.

TD Ameritrade is a full-service broker, and that full service (we’re talking 24/7 customer service and 100 branches for face-to-face consultations) does come with higher fees. Barron’s agrees, awarding it “best platform for novices” five years running. We can anticipate its service only getting better too. In 2016, TD Ameritrade started the process of acquiring Scottrade, another platform known for it’s in-person customer service offerings.

In fact, TD Ameritrade is one of the best platforms for all levels of investors, serving up two discrete products: thinkorswim and Trade Architect. Thinksorswim is a desktop platform designed for an all-around trading experience: charts with real-time data, news tickers, 300-plus technical studies, alerts and alarms, heat mapping, options screeners, securities scanner, and more, all accessible in a single click. It’s definitely for seasoned investors — newcomers will likely be overwhelmed — but it’s worth bringing up because a virtual playspace called paperMoney allows even total novices to cut their teeth without risking even a single penny.

We recommend beginners stick to TD Ameritrade’s web-based platform Trade Architect. It is nowhere near as robust as thinkorswim (and has nowhere near as jazzy a name), but it provides everything a new investor would want and it’s ultra-easy to use. It’s not bogged down with all the bells and whistles and live-streaming CNBC. Tabs at the top are simply categorized under jargon-free headings: account overview, watch lists, alarms, idea generators, and heat maps. Unlike thinkorswim, the platform is customizable. If you want more widgets, like say, additional stock tickers or video, they’re there for the adding.

If beginner investors use TD Ameritrade’s education library to learn the ropes, practice using paperMoney in thinkorswim, and then easily execute trades with Trade Architect, the slightly higher fee may suddenly seem worth it.

Lowest Fees.

OptionsHouse The lowest fees and no minimum balance requirements.

OptionsHouse isn’t the most recognizable name in the industry, and that’s probably because this online broker hasn’t pursued an aggressive marketing campaign like some of the other brokers out there (remember E*Trade’s old Super Bowl ads?). The company was founded in 2005 and was established to specifically provide options traders who demanded lower fees from the then burgeoning online brokerage industry. Those low fees are still what makes OptionsHouse so popular.

There’s a $0 minimum deposit to join and options trade at $4.95 + $0.50/contract (stocks trade at a flat $4.95 fee). This is the lowest price in the industry. Only TradeKing comes close — matching that $4.95 options base fee, but charging $5 more than OptionsHouse for the exercise fee.

The OptionsHouse platform is striking if a bit chaotic — there are buttons, tabs, and menus all over the place. It’s intuitive and there’s a tutorial to walk you through, but to a beginner it might seem more like sitting in front of the controls of an aircraft than is comfortable. Beginners take note: OptionsHouse does have a virtual platform that’s great for practicing. And, the tradeLAB makes dissecting options spreads simple — the green smiley face is good; the red frown is no good.

What you won’t get for those low fees is strategy and research: OptionsHouse has about 30 technical studies; TD Ameritrade has 300.

It’s important to note that E*Trade purchased OptionsHouse for a whopping $725 million in 2016. It is still unclear how any pricing structures or account features and perks will change after the sale is completed, but an OptionsHouse blog post suggests that E*Trade’s tools and services will become available after the platforms merge.

Best Tools and Research.

optionsXpress A one-stop shop within a major firm, with an options-native platform.

OptionsXpress was purchased by Charles Schwab back in 2011 to enhance Schwab’s competitive edge in options trading. The result is a one-stop shop with an options-native platform that’s pretty whiz-bang.

Everything happens through the desktop platform, Xtend, but all the trading tools are also on the optionsXpress web platform. It’s fully customizable, and it’s easy to find real-time quotes and market data, news and reports, and company background information. The Idea Hub scans the market for volatility, earnings, and income-based strategies and offers new trade ideas. With Walk Limit, you can set a few parameters, and it will scan updated market data and re-create an order you may have made at a higher price in the past. Sign up for the Xpresso newsletter and you’ll get a daily alerting you to the day’s risks and opportunities.

Add to that an impressive library of educational resources, as well as access to all of Charles Schwab’s investment research (and free access to its seminars and meetings at local branches), and a virtual trading platform that helps beginner investors practice all types of trading with $25,000 in fake cash. If you need help from a broker — to calm your first-timer nerves or to walk you through a complex strategy — they’re ready to help and totally free, too.

The standard rates are steep, so we don’t recommend optionsXpress to the casual trader. Make more than 35 trades a quarter and you’ll click into “Active Trader” status and your fees will go down. Trade in volumes and there’s another discount; trade contracts under a nickel and there’s another discount. This is all to say the price structure favors the active. And while optionsXpress has a $0 account minimum and does not charge any annual or inactivity fees, if you leave, there is a $60 full outgoing transfer fee.

The Best Options Broker at a Glance.

Did You Know?

Options are contracts that allow an investor the right, but not the obligation, to buy or sell an asset on or before a set date.

Here’s an example: Say you are a buyer looking for a specific vintage car and you end up finding one you just have to have. When you find it, however, you know you won’t have any cash to buy it for another six months. You then negotiate with the owner to give you an option to buy the car in six months for a specific amount. If the owner agrees, you pay him a percentage up front for that option. The same scenario applies in the stock market – just for financial assets instead of vintage cars. If you were trading stocks, you’d be actually buying the car. Or, rather, not buying it since you didn’t have the money.

Because options are simply options and not promises, if something happened to that vintage car — say it was sitting in the driveway and a tree fell on it — you wouldn’t have to buy it. You’d still be out the price you paid for the options contract, but at least you wouldn’t have lost all that money on a now-worthless pile of steel. And, if in those same six months something happens that makes the car go up in value, well, hey, you’ve already locked in your price.

The Bottom Line.

If you’re new, you should prize learning tools. If you’re experienced, you’ll need to choose between low cost or amazing tools. No matter what, options trading shouldn’t be an afterthought tacked onto your platform.

Take Action.

Best for Beginners.

TD Ameritrade TD Ameritrade fees might be higher, but sometimes you get what you pay for.

Consider your entire investment strategy. Don’t make your final decision solely based on options trading if it’s not the only kind of trading you’ll be doing. These online brokerage firms all offer a variety of investment opportunities. You may want to take into account their extra perks or the price of their mutual funds, for example.

Know your expirations. Options are contracts that expire if they’re not acted on and an expired contract is worthless. Make sure you understand your expirations and set reminders using your broker’s platform, or on your calendar if you’re not trading every day.

We find the best of everything. How? We start with the world. We narrow down our list with expert insight and cut anything that doesn't meet our standards. We hand-test the finalists. Then, we name our top picks.

Best Option Brokers.

Choosing which broker to use when trading options is without doubt one of the single most important decisions you will ever need to make in your trading career. Using a good broker can save you money, increase your profitability, save you time, help you find trading opportunities, and it will generally improve your overall trading experience.

The following is a list of the overall best online brokers that we recommend. If you are looking to sign up with a broker now, then we would advise that you take a look at any of the below online brokers. For advice on choosing an options broker, plus further recommendations in specific categories, please see read on.

Competitive Commission Structure Easy to Use Platform for Traders Allows for a Fully Customizable Experience.

Competitive Fees Interaction with a Community of Traders Educational Resources for Beginners.

One of the Best For Trading Features Top of the Line Trading Platform Extensive Customization Available.

You'll see from the above table that we provide reviews of the brokers that we recommend. For a list of all our reviews, plus information on exactly how we go about reviewing brokers, please visit this page. These reviews can help you make a decision about which of our recommendations is the right one for you.

Despite the importance of choosing a broker carefully, many traders sign up with any old broker and simply join the first one they come across or the one that offers the best sign up incentive. Not putting any thought into what broker to use is a big mistake because, this really is a decision that is well worth spending some time on.

If you are lucky enough to know an experienced trader that you trust then asking them which broker they use is a good way to find a decent broker, but that isn't a course of action that is available to everyone. Alternatively, you could try out a range of different brokers, compare them, and decide which one is best for you. However, this would be pretty time consuming.

About This Section.

We have produced this section specifically to help you choose a broker. As well as the list of our top rated online brokers above, we have also produced a number of other lists. Each one of these contains a number of recommended online brokers that are particularly suitable for a specific purpose.

You can see each of the broker categories that we cover linked over to the right. We have also provided some brief details about each category further down this page.

Full Service Brokers vs. Discount Brokers.

The first page in our section on the best options brokers is a comparison between the two main types of brokers: full service brokers and discount brokers. The distinction between the two is quite important to understand, as the services offered by the two is substantially different.

In very basic terms, a full service broker will provide clients with advice and guidance in addition to executing orders as instructed while a discount broker will simply carry out orders on behalf on their clients. Both types have their advantages, and we explain more on the following page: Full Service Brokers vs Discount Brokers.

Best Brokers For Beginner & Small Traders.

When you first begin trading, the chances are that you will be starting out with a relatively small amount of capital, and indeed you may be planning to only ever make small trades. Beginners and those trading with a low budget should be looking for fairly specific attributes before signing up with a broker. An appropriate commission structure and low minimums for both the size of your deposits and value of your trades is essential. Any sign up incentives being offered could also be significant too.

If you are a beginner when it comes to options trading we suggest taking a look at what we have found to be the best brokers for people just getting started.

Best Brokers For Stock Options.

As you probably know, contracts can be based on a variety of different underlying securities which give you many choices. Probably the most commonly traded are stock options; those contracts where the underlying security are stocks in publically listed companies.

It isn't particularly difficult to find brokers that are suitable for trading stock options, but it's still important to choose your broker wisely. If you are planning on trading mostly stock options, then please visit the following page for relevant recommendations. These all do an excellent job when it comes to trading stock options.

Best Brokers For Forex Options.

Forex options are contracts where the underlying security is foreign currencies. These are also very commonly traded, so finding an broker where you can trade forex options is not too much of a challenge.

However, there are certain brokers that particularly stand out and that we believe are worthy of our recommendation. It's very important to find a forex broker that can meet your needs. For a complete list of these recommended brokers and more details on what you should be looking for when deciding where to sign up, please visit the following page.

Best Brokers For Binary Options.

Binary options are a unique form of contract that work a little differently to most others (please see our page on Binary Options for more details) and they are ignored by many traders as they often perceived to be a bit more complicated than the more standard type of option.

In fact, the basic principle of binary options is relatively straightforward and trading binary options is becoming increasingly more popular among traders. Not all brokers will deal with binary options, but for a list of recommended brokers that do please visit the following page.

Best Brokers For OTC Options.

OTC options are those contracts that aren't listed on a public trading exchange but are instead traded over the counter. Those options tend to be highly customized contracts that have complicated terms that include many of the exotic options that exist. Because OTC options are not traded on the public exchanges they are not generally as accessible to the public and are more typically traded between large financial institutions.

Many traders do like to trade OTC options though, in which case it's important to use a broker that is suitable for the purpose. Please visit the following page for recommended brokers in this category.

Best Brokers For Active Traders.

Traders that use active trading styles, such as the day trading style, typically make a large number of transactions on a daily basis. As such, one of the most important attributes that active traders need to look for when choosing a broker is a commission structure that is very competitive and ideally provides for a discount when making a lot of trades.

However this isn't the only consideration that active traders need to take into account and choosing a broker purely based on the commissions charged is rarely a good idea. For more advice on this, along with recommendations of suitable services, please visit the following page.

Best Brokers For Auto Trading.

An increasingly popular way to try and profit from options is by using auto trading services which basically involve a trader signing up with an organization that will find opportunities for trading and then automatically place the relevant orders with the trader’s broker. There are a number of services around and although they aren't necessarily the ideal way to trade, they can potentially be profitable.

One of the biggest problems facing traders that wish to use auto trading services is that not all brokers allow it. For a list of the top places that do, please visit the following page.

Brokers with Best Trading Platforms.

The quality of the trading platform is something that many traders overlook when choosing an online broker, but it really is something that is very important for anyone that is trading options. A decent platform should be well designed with a user-friendly interface as brokers that make it easy to place orders will generally enhance your overall trading experience.

This isn't something that should be ignored if you are going to be spending any sustained length of time trading options each day. For a list of recommended brokers that meet these criteria, please visit the following page.

Forex Options Trading Brokers.

A forex exchange option (also called FX option or currency option) is a derivative financial instrument that gives its owner the right to exchange money from one currency to another at a pre-set exchange rate on a particular date (the option owner is not obliged to take advantage of this right).

Let's see how this look in a practical example: a GBP/USD contract for example gives its owner the right to sell £100,000 and buy $200,000 on May 1. The pre-set exchange rate here is 2.000 and the notional amounts that could be exchanged are £100,000 and $200,000.

If the actual exchange rate on May 1 is 1.900 for example, the FX option is exercised letting its owner sell GBP at 2.000 and buy GBP immediately on the spot market, making a profit in the process.

This is why there are a few things you need to look for when shopping for a forex options trading broker:

- Competitive commission rate for your forex transactions.

- Reliable online trading platform to execute your forex options trading.

- Real-time rates, charting and research tools to help you make the right investment decisions.

Below is a list of OTC Forex Options Brokers. If you are looking for exchange traded forex options, check Interactive Brokers, Charles Schwab or Thinkorwim.

Forex Options Trading Brokers.

Related News.

Binary Options vs Digital Options.

The binary options industry continues moving forward. One of the rather new products which is available are the so called “digital options”. Though they may appear similar in nature to the classic binary options, there are several differences worth pointing out. Read more.

PFSOFT adds options trading modul to Protrader platform.

PFSOFT, a broker neutral software developer based in Ukraine, today announced the addition of a options trading functionality to Protrader, its multi-asset trading platform. The new modul, allowing users to trade options along with forex, stocks and futures, is named Option Master. Read more.

PFSOFT adds options trading modul to Protrader platform.

PFSOFT, a broker neutral software developer based in Ukraine, today announced the addition of a options trading functionality to Protrader, its multi-asset trading platform. The new modul, allowing users to trade options along with forex, stocks and futures, is named Option Master. Read more.

Moscow Exchange Introduces New Volatility Index.

Lately, whenever the talk is about on-exchange or over-the-counter trading in Russia, one key word pops up: “Volatility”. Read more.

Saxo Bank Continues Yuan Push, Launches USD/CNH Options.

Danish bank and Forex broker Saxo Bank does not know how to stop when it comes to introducing new trading products and once it started that push into trading with the Chinese Yuan, it has not stepped on the brakes. Read more.

Forex Industry News.

Latest forex brokers.

Forex trading carries a high level of risk and may not be suitable for all investors. Before you engage in trading foreign exchange, please make yourself acquainted with its specifics and all the risks associated with it. All information on ForexBrokerz is only published for general information purposes. We do not present any guarantees for the accuracy and reliability of this information. Any action you take upon the information you find on this website is strictly at your own risk and we will not be liable for any losses and/or damages in connection with the use of our website.

All textual content on ForexBrokerz is copyrighted and protected under intellectual property law. You may not reproduce, distribute, publish or broadcast any piece of the website without indicating us as a source. ForexBrokerz does not claim copyright over the imagery used on the website, including brokers' logos, stock images and illustrations.

Forexbrokerz website uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Read our Privacy Policy.

Options Trading Brokers 2017.

Tuesday, February 21st, 2017.

Options Trading Best Brokers.

Based on over 100 different variables, here is are the top five brokerages for options trading.

Options Trading.

Next to active traders, there is arguably no client more valuable to an online broker than an options trader. Options trades offer much higher profit margins for brokers than stock trades, and, as a result, competition is fierce in attracting these clients. This type of market atmosphere is great for investors because with healthy competition comes innovation and competitive pricing.

OptionsHouse not only offers highly competitive options commissions, but also a fantastic platform.

Our winner again this year, OptionsHouse (acquired by ETRADE in 2016), understands what it takes to succeed in this niche. OptionsHouse not only offers highly competitive options commissions, but also a fantastic platform. Options trades are a flat $4.95 + $.50 per contract. Only Interactive Brokers offers better all-around pricing for options trades.

Options Trading Tools.

Platform wise, OptionsHouse’s web-based platform offers all the tools an options trader could want and displays them in magnificent form. Attention to detail, like automatic alongside custom spreads groupings, effortless scanning through strategySEEK, and easy-to-understand risk/reward data through tradeLAB, make OptionsHouse a truly unique experience. The OptionsHouse platform is the best in the industry.

Keeping the spotlight on high-octane platforms and tools for options traders, TD Ameritrade’s thinkorswim and TradeStation cannot be left out. Strategy Roller from thinkorswim allows clients to create custom rules and roll their existing options positions automatically. The number of settings and depth of customization available is impressive, and something we’ve grown to expect from thinkorswim. Not to be outdone, TradeStation’s OptionsStation tool makes analyzing potential trades a breeze, and even goes as far as including 3D P&L charts. Investors note, however: Popcorn and 3D glasses are not required, and while visually appealing, we did not see any distinct advantage over the traditional 2D P&L chart.

If unique features and functionality matters to you, Charles Schwab offers the “Walk Limit” order type, which will "walk" your order to try to get the most favorable price within the National Best Bid or Offer (NBBO), is really impressive. The broker also offers Idea Hub, which uses targeted scans to visually break down new possible options trades.

There are a lot of great brokers to choose from in the world of options trading. In 2017, investors should expect their broker to include scanning, P&L analysis, risk analysis, and easy-order management. Position management functionality and tying the experience all together is where platforms like OptionsHouse and thinkorswim really stand out and distinguish themselves. Ultimately, it comes down to personal preference and weighing priorities, such as cost per trade versus ease of use and tool selection.

Options Brokers Summary.

Related Guides.

This broker does not currently have a special offer.

Trade on over 100 market centers in 24 countries - Learn More.

Trade free for 90 days + get up to $600 - Learn More.

All-New Pricing. Now Only $5/Trade + No Software Fees. Learn More.

This broker does not currently have a special offer.