The growing interest in options as a way to leverage investment money has led to an increase in the number of brokers who focus specifically on this space. This crowding has led to fierce competition and better selection for traders than ever before. Our best options trading platforms have a wealth of tools that help you measure and manage risk as you determine what trades to place. They also have strong educational content designed to help you become a successful options trader.
When we focus on options trading, a niche (albeit one that grows rapidly) within the traditional definition of trading, we see that online brokers who are overshadowed by big players in other categories suddenly shine. This includes players like eOption and Webull; however, Tastyworks is the brightest broker. While we place a lot of importance on contract prices with our scenario of a 50-contract trade, the best options trading platform overall has to provide the tools along with that price. Tastyworks is at the sweet spot where its option-specific tools can compete with a powerhouse like E*TRADE, while its price makes it more attractive.
There are cheaper option brokers based on the number of contracts you trade at a time, but Tastyworks has a better platform overall. The final factor that drives TastyWorks to the top is the excellent educational content it produces for its customers, keeping them updated and informed when they are not glued to its graphics. Spectral analysis in Power E*TRADE visualizes the key elements of your potential trade. You can test strategies using the paper-based trading capabilities of the E*TRADE Pro desktop platform.
As we said in our full Webull review, it's essentially a no-cost broker, not a low-cost broker. Webull's main pricing advantage is that it offers U.S. UU. The most surprising thing about Webull is the fact that its options tools and charting capabilities are solid for a broker that costs next to nothing to trade.
Options tools help you set up and customize common strategies using different order types and strike price differentials in multi-tranche strategies. If you want to trade options at the lowest possible price, Webull is the broker for you. Tastyworks is designed from the bottom up with advanced option operators in mind. This has kept it our choice for this category despite tough competition.
While no longer the cheapest in terms of trading costs, Tastyworks' rich options-focused toolset shines brighter than the competition. There are drag-and-drop option orders, position analysis is displayed directly below the option chain, and each tool and filter is optimized for option traders. If you're already familiar with options trading, tastyworks has a lot to offer along with its competitive pricing structure. Competition in this category was extremely tight between E*TRADE and Tastyworks.
That said, Tastyworks takes home our best broker for mobile options traders for the same reason, it's our best broker for advanced options traders, a strict focus on what option traders need. The TastyWorks application is fundamentally the same as the desktop platform. In-app order entry is drag-and-drop, although we found the graphics and graphics to be smaller than ideal, depending on the device. The compensation for that complaint is the fact that the application pre-populates a trade ticket as it creates a position from the graphics.
Once you are familiar with how the tastyworks desktop platform works, the application workflow becomes apparent. The fact that the application mirrors the desktop means that you have the best range of advanced options tools at your fingertips, regardless of the tastyworks platform you use. There's Never Been a Better Time to Be an Options Trader. The number of brokers specializing in the options trading space has increased along with the number of brokers offering commission-free trading.
Depending on your specific tastes, you can find a number of robust options trading platforms with built-in tools and capabilities to significantly speed up your trading. Tastyworks, in particular, stood out again for its unique focus on delivering the best possible options trading experience. With that said, WebULL will draw the attention of cost-conscious traders due to its decent toolset and no-cost approach. Finally, we have E*TRADE, which is a good place for traders to start on the path to options trading, with plenty of room to grow in the advanced capabilities contained in the Power E*TRADE platform.
Options traders have waited a long time to have such a variety of options when choosing a trading platform. On the secure TD Ameritrade website. Robinhood is an efficient options trading platform that captures a spot as one of the cheapest options brokers. Commission-free options trading completes a set of features for trading commission-free stocks, ETFs, fractional stocks, and cryptocurrencies as well.
On Robinhood's secure website. On the secure Ally Invest website. On the secure E*TRADE website. On the secure TradeStation website.
Like Robinhood, Webull is essentially a no-cost options broker that charges no commission or contract options trading fees. In addition, the platform is easy to use and offers access to more than just stock option trading. If you're considering Robinhood, compare it to Webull as well. On Webull's secure website.
Competitive base options commission and tiered contract pricing alone give Interactive Brokers a spot on this list. The otherwise robust feature set and low options trading fees also make it a solid platform for options trading. While TD Ameritrade isn't the cheapest platform for option traders, it's one of the most comprehensive. Its thinkorswim desktop platform offers unparalleled trading tools and its mobile platform allows even complex options trading on the go.
Credit Suisse and Morningstar research also helps traders make informed decisions. Unlike most competitors, Robinhood doesn't charge a contract fee for trading options. Since there is no commission either, this makes Robinhood the cheapest platform for options trading in existence. While it's not the most feature-rich platform, Robinhood offers mobile trading to make it possible to buy and sell options contracts from all your devices.
Webull is a great option for option traders looking for the cheapest platform. There are no contract fees or commissions, which differentiates it from most competitors. Webull also offers an intuitive and easy to use trading platform and, most of all, it shines with its feature-rich mobile software that can be used on all your devices. Interactive Brokers charges a variable commission per contract for trading options, with a price based on the size of the trade.
This makes it an ideal choice for investors with deeper pockets who may qualify for lower prices. Their WorkStation platform is a powerful trading platform packed with features that option traders will love. For example, Robinhood has no fees for options trading, but its platform is very light in functionality and features, making it suitable for investors who don't necessarily need educational resources and just want to venture into basic buying and selling trades. On the other hand, an options broker like E*TRADE charges commissions, but it's packed with features and resources that could be worth much more than commission costs for many investors.
Many options trading platforms allow you to practice options trading, including E*Trade and TradeStation. E*TRADE services are available only for the U.S. This announcement contains information and materials provided by Robinhood Financial LLC and its affiliates (“Robinhood”) and the Publisher, a third party not affiliated with Robinhood. All investments involve risks, and the past performance of a financial product or securities does not guarantee future results or returns.
Securities offered through Robinhood Financial LLC and Robinhood Securities LLC, which are members of FINRA and SIPC. Publisher is not a member of FINRA or SIPC. This announcement contains information and materials provided by Robinhood Financial LLC, Robinhood Securities LLC and its affiliates (“Robinhood”) and Publisher, a third party not affiliated with Robinhood. Securities offered through Robinhood Financial LLC, a member of FINRA and SIPC and a wholly owned subsidiary of Robinhood Markets, Inc.
Cryptocurrency Trading Offered Through Robinhood Crypto. Robinhood Crypto and Publisher are not members of FINRA or SIPC and cryptocurrencies are not stocks and their cryptocurrency investments are not protected by FDIC or SIPC insurance. It's an independent publisher and comparison service, not an investment advisor. Your articles, interactive tools, and other content are provided to you free of charge, as self-help tools and for informational purposes only.
They are not intended to provide investment advice. NerdWallet does not and cannot guarantee the accuracy or applicability of any information regarding your individual circumstances. The examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance.
These brokers have the tools and research needed to trade options and offer low rates per option contract. Many or all of the products listed here are from our partners who compensate us. This can influence the products we write about and where and how the product appears on a page. However, this does not influence our evaluations.
This is a list of our partners and this is how we make money. The investment information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell stocks, securities, or other particular investments. The best options brokers offer low options contract fees, quality trading tools, a wealth of high-quality research, and the customer service needed to support everyone from beginner investors to advanced traders.
While most of the brokers on our list of the best brokers for trading stocks would also be a good option for options, this list highlights brokers who excel in the areas that matter most to option traders. Many of the following brokers also appear on our list of the best online trading platforms for day trading. Not sure what you're looking for? See our post on choosing an options broker and our options 101 guide to learn more about what can make or break an options trading experience. NerdWallet ratings are determined by our editorial team.
Rating formulas take into account several data points for each financial product and service. Stocks and ETFs Commission-free trading with stocks, ETFs and options. When you open and fund an E*TRADE account Commission-free stocks, options and ETFs trading. No Promotion Available Right Now Per Trade (in Eligible US Values) Valid Deposit Cash Bonus.
When you open and fund a JP. Morgan Self-Directed Investment Account with Qualifying New Money App Connects All Chase Accounts. Free trading on an advanced platform requires TS Select. Plans and pricing can be confusing.
People often identify opening a savings account as their next money move. At American Express National Bank, the comprehensive review process of FDIC member NerdWallet evaluates and ranks the largest in the U.S. Brokers for assets under management, together with emerging industry players. Our goal is to provide an independent evaluation of providers to help provide you with information so that you can make sound and informed judgments about which ones will best suit your needs.
We meet strict guidelines for editorial integrity. We collect data directly from suppliers through detailed questionnaires and conduct first-hand tests and observations through vendor demonstrations. Questionnaire responses, combined with demonstrations, vendor staff interviews, and hands-on research by our specialists, drive our unique evaluation process that rates each supplier's performance on more than 20 factors. Final output yields star ratings from poor (one star) to excellent (five star).
Ratings are rounded to the nearest half star. To learn more about the categories considered when qualifying runners and our process, read our full methodology. Chris is an investment writer for NerdWallet. He has more than 10 years of agency, freelance and in-house experience writing for financial institutions and training financial writers.
Read More Andy Rosen is a NerdWallet Writer Focused on Cryptocurrencies and Alternative Investments. He has more than 15 years of journalistic experience as a reporter and editor in organizations such as The Boston Globe and The Baltimore Sun. Charles Schwab does a lot of things well, while focusing on what is good for the investor, making him an excellent choice of options. In addition to fair pricing for options, Schwab also provides you with fundamental research that should be valuable in selecting the options you want to trade with.
Throw in fantastic customer service and the prestigious StreetSmart Edge trading platform, and it's hard to go wrong here. Charles Schwab has acquired TD Ameritrade and will eventually integrate the two companies. Each of these platforms does at least one thing really well, whether it's educating beginners about the difficulties and potential of options trading, generously rewarding new customers, or facilitating options trading on a smartphone. Our best option, TradeStation, offers the best overall value and the best experience for the widest range of options traders.
Open an account with TradeStation E*TRADE spares no effort to make novice option traders feel at home. Start with your knowledge base, where useful articles and videos define the terms and introduce the basic options trading strategy. Then move to the Power E*TRADE platform, where you can evaluate planned trades using advanced analysis or “execute” them without risking real money with a sophisticated paper trading tool. Open an account with Interactive Brokers.
TD Ameritrade owns the thinkorswim platform, which is available as dedicated mobile and desktop applications. This is one of the strongest options trading platforms and one of my favorites to use. TD Ameritrade isn't the cheapest platform to invest in, but the tools available on thinkorswim make it incredibly easy to learn how to trade options. Read the full TD Ameritrade review here.
Interactive Brokers (IB) has robust mobile and desktop applications. You can also trade through their website. Read our full Interactive Brokers review here. TradeStation is one of the most customizable platforms on this list, and it's really geared toward option traders (and other traders in general).
TradeStation has dedicated mobile and desktop apps. TradeStation also has some of the best entry-level pricing for option traders. Read our full TradeStation review here. For traders who will trade more frequently (more than 30 trades per month), Interactive Brokers, E*TRADE and Ally Invest offer volume discounts.
Interactive Brokers has an advantage, since it doesn't charge a base fee plus a contract fee. If you're interested in options trading, you'll want a trading platform that helps you identify market opportunities, makes it easy to place desired orders, and allows you to do it all at a low cost. We've analyzed the largest and most established brokers on the features that matter to individual investors: trading fees, comprehensive research, and trading platforms. If you are an advanced trader, the thinkorswim platform offers many new tools and research options for option traders.
For a put trade to make a profit on a call option to close, it needs the price of the underlying security to fall sufficiently to bring the price of the put option below its breakeven point. Succeeding at Robinhood simply means knowing how you want to trade options and doing it in a very minimalist style. Options trading offers online brokers much higher profit margins than stock trading, and as a result, competition is fierce to attract customers. However, investors with larger portfolios can use portfolio margin to minimize the risk of a margin adjustment by offsetting net gains on one option trade against losses on another.
Fidelity's Active Trader Pro desktop platform is excellent for active trading, including day trading and options trading; the platform includes a variety of analysis tools. E*TRADE also offers feature-rich trading tools, especially on its free Power E*TRADE platform, which is highly regarded among options traders. The reason E*TRADE prevails despite its price disadvantage is that it has an innovative platform, extensive tools, and excellent educational resources to help new option traders develop their trading skills. TradeStation allows users to trade stocks, bonds, mutual funds, exchange-traded funds, options and futures.
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