18 Best Options Trading Platforms Of 2021

In this article, we would like to share The Best Options Brokers in 2021 for beginners and advanced Traders. Starting in options trading can be an overwhelming experience. Our guide should make your start much easier. We’ve listed the most easy-to-use options trading platforms. We assessed the platforms based on the tools, order types, commissions, and incentives.

For beginners in options trading, we would recommend Interactive Brokers and TD Ameritrade ‘thinkorswim’ trading platform. If you want to get a feel for trading at a more relaxed pace, we’d recommend Robinhood for its simple style. 

Best Options Brokerage Accounts for 2021

This list of the best brokers for options trading is based on numerous factors. Fees & commissions, account security, customer support, ease-of-use, regulation and more is considered in our analysis.

This is a recap of our selections…

  • TD Ameritrade
  • Interactive Brokers
  • Plus500 – Best For Non US Traders
  • IQ Option – Best For International Traders
  • TradeStation
  • Tradier Brokerage
  • Lightspeed
  • Merrill Edge
  • Fidelity
  • Robinhood
  • Tastyworks
  • E*Trade
  • Webull
  • Charles Schwab
  • You Invest by J.P. Morgan
  • Gatsby
  • eOption
  • Ally Invest

TD Ameritrade “Thinkorswim”

TD Ameritrade ‘thinkorswim’ trading platform is ideal for beginners. It has a $0 account minimum which makes it accessible to all. The platform is easy to use and navigate which makes trading easy. 

TD offers 24/7 over-the-phone customer service and email support. They also have virtual trading which is ideal for beginners who want to experience the platform without putting their money at risk. 

The thinkorswim platform also has features for experienced traders such as research. They also have risk management tools available. 

This platform can also be used to study option strategies, do asset risk, and set up rolling spreads for expiration dates. 

For beginners, thinkorswim offers educational tools so that you can learn on the go. 

We would recommend this platform for both beginners and expert traders.

TD Ameritrade Logo
PROSCONS
Charges $0.65 per options contractHigh margin interest rates
Webcasts available at their websiteA few features in Thinkorswim are a challenge without help
Tools for options strategies, risk assessment, and rolling spreadsTD has two different trading platforms which can be confusing
Educational tools for learning on the go
A trading simulator for beginners to practice

IQ Option – Best For International Traders (Not Available in the US)

While not ideal for beginners, IQ Option is a good trading platform. They are a regulated online broker. For the most part, their profile of financial products is good. 

If you are starting out or just want to check IQ Option out, they do offer a demo account. 

There is a low minimum deposit of $10 and a minimum trade of $1. 

IQ Option has platforms on both mobile and desktop which is handy if you’re constantly on the go. 

We would recommend this platform to more experienced users. 

PROSCONS
Available on both mobile and desktopNot available in the US
Offer a demo accountRequires a minimum deposit to open an account
Withdrawals are processed within one business day
Open Free Account

Plus 500

Plus500 is a seasoned CFD broker from Israel. They have been listed on the FTSE 250 and have earned the respect and prestige that comes along with it. 

Their platform is easy to use. It is available in multiple languages which is always a plus. 

A downside of this platform is that Plus500 does not offer educational content. We would not recommend this platform for beginners. 

PROSCONS
User-friendly platformNo educational content offered
Demo account availableNot Available in the US
Regulated by the FCA in the UKNo swap account
Available in multiple languages
Open Free Account

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Interactive Brokers

Interactive Brokers is known for its smart and easy-to-use tools. It offers global investing tools.

With Interactive Brokers you can access any electronic exchange internationally. 

It is suited to active traders. Interactive Brokers are best suited to experienced traders but they have expanded their tools to suit beginners. 

Interactive Brokers offer a mobile app that is perfect for traders on the go. They also have a customizable Trader Workstation. This includes OptionTrader. 

This platform includes market data displays. What makes this platform stand out is its voice command feature. This allows you to use voice commands to use the app which is always a win!

We recommend this platform to both expert traders and newbies. 

PROSCONS
Low margin ratesCustomer Service
Easy to useCannot view quotes on more than one screen at the same time
Zero Account minimum
Large selection of options-based lessons
Open Free Account

TradeStation

TradeStation is a standout in trading platforms because it does not charge commissions. It offers various features such as custom watch lists, and view charts. You are also able to review trends in real-time. 

Most of the features are suited toward experienced traders. TradeStation offers over 150 indicators for test strategies and over 90 years of stock trading data. 

It also features vast option research tools. 

A drawback is that this platform was designed with expert traders in mind. It is not the easiest platform to use and does require some tutorials. 

We would recommend this platform for experienced traders. 

Tradestation Logo
PROSCONS
No fees per trade (not including ETFs)Requires a minimum balance
$1 per option contractNot easy to use
An active trader communityLacks phone support
Vast research and charting tools

Tradier Brokerage

Tradier Brokerage is high-tech. It is unique in that it uses Application Programming Interface (API) with its trading software. This lets Tradier offer a vast range of platforms from a third party for traders. 

Tradier is suited to active traders. What is great about Tradier is that they offer low commissions and fees. 

Tradier Brokerage Logo
PROSCONS
Affordable margin ratesDoes not offer online mutual funds
Real-time market data availableNot suitable for newer traders 
A vast range of platforms available 

Lightspeed

Lightspeed is a direct-access online broker. Their focus is on active traders. 

They offer fair, competitive pricing. Along with the third-party trading platforms they offer, Lightspeed also has their trading platform called Lightspeed Trader. When comparing their platform to competitors it is lacking. 

A downside to Lightspeed is that if you are a casual or beginner trader, this platform is not for you. Casual trading can mean paying high monthly fees. 

Lightspeed Logo
PROSCONS
Low options trading feesHigh commission
Offer Futures tradingHigh minimum investment needed
Account fees

Merrill Edge

On the opposite end of the coin, Merrill Edge is perfect for casual traders. They offer rich research content and have competitive prices. They have unlimited free trades on stocks.

What makes Merrill Edge great is that it is linked to Bank of America branches all over the US. You can easily go to your nearest branch and get in-person customer service.

Merrill Edge Logo
PROSCONS
Rich third-party research contentNot suited to advanced traders
Linked to Bank of AmericaLimited securities offered 

Fidelity

Fidelity is a well-rounded trading brokerage. They do not charge commissions on stock, options trading, and ETF. 

Their investor-friendly trading can save you tons of money!

Fidelity is known for its mutual funds. They also have rich research options and an easy-to-use customizable platform. 

Fidelity Investments Logo
PROSCONS
Customizable news feedNot available Worldwide
Amazing research and asset screenersDo not offer commodities or options on futures
Good trade executionsUsers will have to use multiple platforms to use the tools

Robinhood

Robinhood changed the game with their zero commissions approach to options trade, stocks, and ETFs. 

This saves you so much more money when trading than with other platforms. 

They offer a minimalistic mobile app that is sleek and streamlined to make accessing trade easy. 

A downside to the simplicity is that the mobile app lacks spread intelligence tools and portfolio testing tools. The app can only be used to make trades and check your portfolio. 

Expert traders may find this platform limiting. It is better suited to beginners looking for trade practice and hobbyists. 

We would recommend this platform to beginners and hobbyists who would like to play around with trading.

Robinhood Logo
PROSCONS
Zero commissionsLacks spread intelligence and portfolio testing tools
Simple, easy-to-use mobile appNo phone support
Low-cost margins for trade Lacks retirement accounts
Limited educational content

Tastyworks

Tastyworks was launched in 2017 and is run by Tastytrade. This platform is perfect if you’re looking to specialize in options trading. 

It is suited to active traders. Tastyworks offers advanced options for specialized trade. 

The platform is available online via their website, as a mobile app, and on desktop. This is ideal for traders on the go. 

But, the educational content offered is limited and this is suited to experienced traders. The educational content that is offered is focused on volatility.

This platform can be overwhelming to beginners but, if you have some know-how you might find the challenge exciting. 

We would recommend this platform to experienced traders and daring newbies.

Tastyworks LLogo
PROSCONS
Zero commissionsLacks spread intelligence and portfolio testing tools
Simple, easy-to-use mobile appNo phone support
Low-cost margins for trade Lacks retirement accounts
Limited educational content

E*TRADE

E*Trade started as an online broker. It has a reputation for supporting newbie investors. They offer an array of educational tools and courses which is perfect for anyone starting. 

E*Trade offers research tools and spread options. This is great if you’re looking to spread your wings in options trade. 

It has cool features like allowing for complex spreads and customization. It has a performance risk tool. This shows the risk of individual holdings that offer security, especially if you’re just starting. 

If you’re an experienced trader that wants to give E*Trade a shot, you can check out their OptionsHouse platform. This offers more data and research. 

We would recommend this platform for eager beginners. 

e-trade logo
PROSCONS
Offers charting and forecasting toolsHigh margin rates
Customization available for options charts and trading laddersThere are additional charges for multi-leg spreads
An extensive amount of educational content
Low option fees ($0.50 to $0.65)

Webull

WeBull is a US-based trading platform. They are a fintech startup. What makes them so great is that they offer zero-fee and discount services. 

They are a safe and regulated broker and offer a maximum of $500,000 investor protection. 

WeBull offers commission-free stock, options trading, and ETF. They do not charge inactivity fees. This makes it perfect for casual or beginner traders. 

A downside to this platform is that it has a limited product portfolio and only covers US stocks, options, and ETFs.

WeBull Logo
PROSCONS
Free ETFs, stocks, and options tradingLimited product portfolio
Easy to open accountsOnly bank transfers for withdrawals and deposits
Amazing trading platformDo not offer live chat and have bad phone support

Charles Schwab

Charles Schwab is a professional trading platform. Their platform is based on optionsXpress. 

Charles Schwab offers various tools like StreetSmart Edge, which is on desktop and online. They also offer the All-in-One Trade Ticket. This allows you to access spread tools and access different kinds of trades from a drop-down menu. 

They also have an Idea Hub. This lets you view options contracts. What makes this feature so great is that it sorts option contracts by market activities or profit projections. 

We would recommend this platform to beginners and expert traders. 

Charles Schwab Logo
PROSCONS
Different platforms like StreetSmart Edge and Idea hub lets you see new trading ideasOption tools are spread across numerous apps which can make trading confusing for beginners
Educational content available for options tradingHigher margin rates
A large variety of asset classesUnattractive dashboards and user interface
Commission-free options available in the US

You Invest by J.P. Morgan

Charles Schwab is a professional trading platform. Their platform is based on optionsXpress. 

Charles Schwab offers various tools like StreetSmart Edge, which is on desktop and online. They also offer the All-in-One Trade Ticket. This allows you to access spread tools and access different kinds of trades from a drop-down menu. 

They also have an Idea Hub. This lets you view options contracts. What makes this feature so great is that it sorts option contracts by market activities or profit projections. 

We would recommend this platform to beginners and expert traders. 

You Invest J.P. Morgan Logo
PROSCONS
User-friendly platformLimited tools and research options
Does not charge commissionsThe Portfolio Builder tool needs a balance of $2,500
No account minimum needed
Easily connected to all Chase accounts

Gatsby

Gatsby is a mobile-based trading platform. They offer commission-free options trading which is great for options traders. 

A downside is that the app is focused on options trading and has a limited trading portfolio. Their customer support also leaves something to be desired. Customer support is only available via email and they do not have a mailing address, phone number, or live chat.

Gatsby Options Logo
PROSCONS
Commission-free options tradingOnly available on mobile
Easy options spreadLimited trading portfolio
Equity trading
Offers a social trading feature

eOption

eOption specializes in options trading. They also offer investments in ETFs and stocks.  They do not have commission fees on stocks and ETFs which is a major bonus. 

They offer some of the lowest commissions and margins on the market which is always a bonus. 

A downside is that you do need an account minimum of $500 which is pricey. 

For beginners, they offer educational content for options which is great. They have platforms on both mobile and desktop. 

We would recommend this platform to both beginners in options trade and experts.

eOption Logo
PROSCONS
Low options contract pricingHigh account minimum
Multiple platforms
Educational content for options

Ally Invest

Ally Invest is known for its low-cost options and low fees. This platform is suited to beginners because Ally Invest because of its easy-to-use tools. 

The low costs include everything! There are no account minimums! This made us so excited. Times are tough and saving money, and making money, is always a win. 

This is great if you’re on a budget.

Ally Invest has clear fees. If you are interested you can check out Ally’s Straight Talk Fees Guide. 

We would recommend this platform for beginners and expert traders. 

Ally Invest
PROSCONS
$0 for options, ETFs, and stock tradesOnly available online
$0 account minimum Transaction fees on mutual funds
Professional research and tools

What Is Options Trading?

An option is a contract that gives the owner the right to buy or sell an asset at a specific price (strike price) by a specific date (expiration).

This is based on the kind of option traded. 

Options can be bought, or gained as a form of compensation. Options are assets and have value. The option value is determined by the relationship between the underlying asset value, expiration date, and market volatility.

Options can be traded between private parties or in exchange trade via markets in the form of standardized contracts.

To make this easier to digest, we have broken up options trading into four key points:

Options contracts

These are agreements between buyer and seller. It gives the buyer the right to buy or sell the asset at a specific date (expiration date) and an agreed-upon price (strike price). 

Options contracts are used as commodities, securities, and in real estate transactions. 

Premiums

This is the market price of an option contract. It is the income the seller receives for the options contract. 

There are two factors for in-the-money option premiums, namely; intrinsic and extrinsic value. For out-of-the-money option premiums, only extrinsic value is given. 

The premium is generally valued at a dollar amount per share. Option contracts generally account for 100 shares. 

The option premium has more value the further away it is from expiration. 

Strike price 

The strike price is also known as an exercise price. It is the price that the owner of an option can buy or sell a commodity or underlying security. The strike price could be decided about the market price of the option or commodity.

The strike price can also be set at a discount or a premium. 

When an option needs delivery of the underlying instrument, the trade takes place at the strike price. This occurs regardless of the market price at the time. 

Expiration

The expiration date is the last day that options contracts are valid. Before the option expires, investors can decide to ‘realize’ the option and make a profit or loss. Or they can decide to let the option expire and become worthless. 

How Much Money Do You Need to Start Trading?

There is not a set amount of money you need to start trading. But, this does not mean that there aren’t any costs involved. The amount that you could end up spending depends on the trading platform you use. 

To make your life a bit easier, we have listed some of our favorite trading platforms. We drew up this list keeping beginners in mind. 

How to Pick an Options Broker?

Choosing a trading platform can be a stressful task, especially if you’re starting. Before jumping in, it is good to think about what you want.

Think about your needs, wants, and goals. And, of course, your bank account. 

Do you want to be an active trader? Do you want to dabble? How much money are you willing to invest?

Once you have that figured out, you can begin sorting through the thousands of online reviews to find a platform that suits your needs.

Once you’ve narrowed this down the real fun begins. Here are a few things to consider:

Fees

Now it’s time to compare all of the fees to see which platform offers you the best deal. Online reviews and videos can help with this. Here are a few fees you should look at before making your decision. 

  • Exercise fees: Exercise fees are charged when you decide to exercise an option instead of closing it
  • Assignment fees: Assignment fees are charged if you have stock from an option automatically sold or bought because the stock was exercised. 
  • Per contract fees: Stockbrokers can charge a base option fee as well as a commission for each contract. The fee system can have multiple tiers for options trading. This offers you some flexibility.
  • Commission fees on trades: When trading options online, brokers can charge a commission fee for every trade you make. 
  • Transaction fees: This fee is charged when buying or selling a good or service. 

Education

If you’re a beginner in options trading, a platform’s educational content should be high on your checklist. 

Customer services

An important thing you should look at is customer service. Trading platforms usually offer live chats, phone call services, or email.

Regulation

You should make sure that the platform you’ve chosen is regulated. Trading platforms are regulated by the country they are based in or by third-party companies. 

Safety

When trading, make sure that the platform ensures that your personal information is secure. Investing is a risky game and being secured against hackers can give you peace of mind. 

Trading Platforms

Most trading companies offer platforms online and as a desktop application. There are also mobile apps. If you’re a trader on the go, ensuring that the broker offers numerous platforms is something you should consider. 

In our experience, it might take a few tries before you find the perfect fit. Our advice is to do your research so that you can make an informed decision. 

Buying and Selling Options

Options trading is not as straightforward as most stock trades. With options trading, there are four basic order types. 

Options order types

Buy to Open

This is a common type of options order. This works when an options contract could increase in price. This method is used when you want to make a long or short position on an underlying security.

Sell to Open

This is used if you want to open a trade and sell an option using ‘naked calls’. You can also use this to make a profit if you think the price of the security is at risk.

Buy to Close

This is used if you want to close an options trade. Buy to close ends your short position.

Sell to Close

A sell to close is used when you want to end your long position option. You can use this when you want to make a profit on an option after it goes up in value.

Advanced Options Orders

Advanced option orders are option trading strategies. Here we have listed the common strategies that you can use. 

Combination Orders

This strategy involves combining put and call options when entering a trade. This strategy is also known as an ‘iron butterfly’.

Market Orders

This lets a broker know that you want to buy or sell an option at market price. There is a risk using this method because a broker can make you wait before you buy or sell. If the market price drops you will have an order filled at a bad price. This doesn’t happen too often but there is a risk.

Limit Orders

This lets you set the price point of a buy or sell. It can help you avoid market drops and helps you know the stock trends. You can then use this information to your advantage.

Which Vertical Option Spreads Should You Use?

There are four types of vertical spreads. These are the bull call, bear call, bull put, and the bear put. Using a vertical spread, you can buy one and sell options at a higher strike at the same time. You can do this by using both puts or calls.

FAQ

What is a put option?

A put option is used by investors who want to place a bet on a stock. This is usually if they think the stock price will drop. Buying a put option gives you the freedom to sell shares of a stock at the strike price before the expiration date.

This can be profitable because the value of the option contract will increase as the stock drops. But, if the stock value increases, the option contract value will drop. 

What is a call option?

A call option is used by investors who want to bet that the stock value will go up. Buying a call option will give you the freedom to sell the shares of a stock at the strike price before the expiration date. 

This means that the option contract value is based on the value of the stock. If the stock value rises, so will the value of the option contract. But, if the stock drops, so will the option contract. 

Is options trading risky?

Yes. Options trading is a leveraged investment and like most investments, it is risky. When entering any investment you are at risk of a loss. 

This is why having education content and research are so important when choosing a trading platform. 

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