Best broker for day trading options

Day Trading Options: 5 Best (Starter) Platforms. Once you’ve learned the basics of day trading – you might get the idea that the process is easy: buy options, sell them within the day, repeat the next day. Don’t let that fool you, however options day trading can get a little bit tricky. This is where trading platforms come into play. Online brokers love the options day trader, most likely due to its higher returns compared to stock trading. This encourages stiff competition, leading to innovative solutions and friendlier price points, which is a great plus for investors and day traders. This article will discuss all you need to know about the options trading platform and online options trading in general. First, I’ll give you the essential factors and features that you need to consider before choosing an online broker to manage your day trade options. Once that’s settled, we’ll discuss the five best platforms available – from general overviews, price points, advantages, disadvantages, and other useful information. Let’s get started! Top 5 Options Day Trading Platforms. min Balance req. $4.95 + $0.50 per contract. $4.99-9.99 + $0.20-0.70 per. contract (based on volume) Superior Platform Interface.

$12.95 (Active Trader)$14.95. (Standard Trader) + $1.25-1.50. per contract (based on volume) $1000 (waived with. $100 monthly auto-deposit) $8.95 + $0.75 per contract. $9.99 + $0.75 per contract. Factors to Consider Before Choosing an Online Broker for Day Trading Options. More frequently than not, individuals tend to choose brokers with the lowest price points. While cost and fees are indeed important, they’re not the only things you should consider before choosing an online broker for trading options. Sure, you might get the least expensive broker – but at what price? You also need to take into consideration the following factors: Interface and Simplicity. These factors may be even more important for beginners in day trading. Online brokers exist to make your life and investment processes simpler and easier – not the other way around! You’ve got enough to worry about in formulating strategies for day trading, you really shouldn’t be wasting time figuring out how to use a trading platform.

Commissions and Fees. I still have to mention it, as it is an important factor to consider. Commissions and fees can make or break your actual returns on investment. Be wary of fees that may be hiding in plain sight or are written in fine print, such as maintenance fees and trading fees. Similarly, commissions and fees should be direct, to the point, and simple in nature. Available Research and Technological Tools. These are arguably the most important points to look for in a trading platform. Research – which includes opinion articles by the pros, corporate publications, and news in general – can help you make smarter decisions in day trading. These should be readily available in the online platform you choose, and should be updated promptly. Trading tools, on the other hand, will help you analyze trends that may be based on the research data available on the site. Make sure that the online broker you choose is affiliated with trusted associations. For more information, visit the Financial Industry Regulatory Authority’s (FINRA’s) website.. Your broker should also be able to guide you step by step.

There’s nothing like great customer service, online brokers’ included. There are a lot of other features that you might look for once you get the hang of it, but the factors listed above are the most basic ones to look out for in online trading platforms. The Five Best Trading Platforms. Now that you know what features to look for in an online broker, you may start to wonder: which should I choose? You might be overwhelmed by the amount of platforms available for day trading options. Simply visiting their websites might not be enough for you to comprehend their services. But don’t worry. We’ve got you covered! We did the research for you and tested various trading platforms available for day traders. Here are the five best option trading platforms (in no particular order), along with some information on their fees, key features, pros, and cons.

Minimum balance requirement: $0. Commission for options: $4.95 + $0.50 per contract. OptionsHouse has one of the lowest commissions for options trading, which makes it attractive for beginners and experienced users alike. Founded in 2005, OptionsHouse quickly became one of the top choices for day traders for its low base rates. If you’ve decided to go for discount brokers, OptionsHouse may be the best choice for you. In 2014, OptionsHouse merged with TradeMonster, which helped improve its overall trading capabilities. One feature that many users love about OptionsHouse is its highly customizable platform, where you can tweak and select the sections you prefer to see on your dashboard. The website also provides you with useful options trading tools, such as options chains, risk viewers, and option calendars. OptionsHouse also boasts of its fast order entry. Processes are streamlined (a guide they call ‘tradeCYCLE’), and you can input orders and add stocks with ease, and in an instant. Beginners may also find OptionsHouse attractive with its archived webinars that teach you how to go through day options trading.

There is a downside to the simplicity and efficiency of OptionsHouse, however it may not be for individuals looking for platforms that have a number of investment products (for one, it lacks Forex trading). Its name speaks for itself: it mainly focuses on options. Lastly, OptionsHouse is not a full service broker. As previously mentioned, this is for those who are looking for a discount broker. OptionsHouse is perfect for those seeking low fees, advanced trading tools and platform, and efficiency. Minimum balance requirement: $5,000. Commission for options: $4.99 to $9.99, with $0.20 to $0.70 per contract (based on volume) TradeStation has one of the best design interfaces and platforms among online brokers, a major reason experts shower it with praises. It’s also one of the fastest and most efficient online trading platforms, with fast order placements and trade executions incorporated. For a visual of the interface and a review of the platform by Chris Dunn, see this video: One of our favorite features on TradeStation is its OptionsStations tool, which makes analysis of possible option trades infinitely easier. It also includes a P&L chart in 3D format – visualizing your profits and losses and helping you choose better potential trades. You can even rank possible trades, and analyze various options positions.

Tools are also available for you to formulate and test out your trading strategies – and even earn from them by selling these strategies to interested investors. Another plus for TradeStation is its availability on mobile (on both iOS and Android). The app isn’t quite as comprehensive as the web platform yet, but you can still view and analyze real-time data and make trades. This is very important for day traders, as you have to be alert to sudden changes any time – and you should be ready to make the trade. A word of warning though: TradeStation issues a monthly brokerage fee worth $99.95, and it’s not for those who are conservative with their options as it is more beneficial for those who trade in bulk. If you’re into trading massive volumes of options, though, then TradeStation may be the perfect platform for you. Minimum balance requirement: $0. Commission for options: $0 Base Fee, $12.95 to $14.95 + $1.25 to $1.50contract based on volume. OptionsXpress mainly focuses on features that would highlight its strength in options trading, such as real-time options trade data, quotes, and options chains. Similar to OptionsHouse, OptionsXpress’s platform is highly customizable, and is very easy to use. OptionsXpress also is one of the faster and more efficient online trading platforms available. Inputting an order with a wide array of different options is possible with its simple, all-in-one interface.

The platform also offers useful trading tools such as price calculators, and charts that will help you track different options’ volatility. One of their most powerful tools is the DragonTool, which lets you search for options based on your personal preferences and strategies. Beginners also can find resources in OptionsXpress that would be useful: for one, they have a virtual trading platform that lets you invest $25,000 in virtual money – which can help you create and fine-tune your trading strategies in real life. OptionsXpress also has an Education Center, which houses videos that teach newbies the how-tos of day trading. In addition, new users get a free 13-month subscription to a daily financial newsletter which cites notable news, publications, reports, and trends in the market – very handy for those looking to earn more in the options trade. Like TradeStation, however, OptionsXpress favors those who trade options more actively. So if you’re just starting out and are just trying to test the waters in day trading, their pricing structure may not be the most preferable – you’d be better off with OptionsHouse. But if you’re an experienced day trader who trades on a regular basis, their pricing is a major plus. Another disadvantage to consider is that their customer service includes chat and telephone clients which you can access during the day, but the 24-hour customer support is only available to futures traders. Minimum balance requirement: $1,000 (waived if you have an automatic deposit of $100 per month) Commission for options: $8.95 + $0.75 per contract.

The parent company of OptionsXpress, Charles Schwab is one of the frontiers of options trading. The company was founded in 1971, and has garnered vast experience in the options trading game. They’re not limited to options trading, though, as they are a full investment company (which can be an advantage if you’re looking to trade investment products other than options). Charles Schwab is one of the best platforms if you’re looking for research data, analysis, and trading tools. Similar to OptionsXpress, Charles Schwab offers a customizable platform for those who want to incorporate their personal preferences on the interface. Beginners and advanced traders alike will also enjoy their other useful resources, such as live webinars, educational videos, seminars (at Charles Schwab outlets) and financial commentary by the experts. While there is a vast amount of resources that can be found at Charles Schwab, some users have complained that the interface looks a bit disorganized, especially if you don’t know specifically what you’re looking for. Though they offer 24-hour customer service, many have also said that Charles Schwab’s email support is not on par with other options brokers’ levels. Minimum balance requirement: $0. Commission for options: $9.99 + $0.75 per contract. You’ve probably heard of TD Ameritrade, and you’ve most likely even tried one of their most popular virtual trading tools, thinkorswimⓇ. But TD Ameritrade’s services don’t just stop at virtual trading, they also offer one of the best online options platforms currently available. Their much-lauded analytical tools, thinkorswimⓇ and Trade ArchitectⓇ, offer users with highly functional features that can help you follow market trends, analyze them (through graphs and charts), formulate a method, and implement them instantly. Advanced users in particular will likely enjoy these features (with their wide array of settings that can be customized), but beginners are also welcome in their very user-friendly online platform interface. TD Ameritrade also comes with a mobile app, suitable for those who want to closely follow news and trends in the market.

Aside from their advanced trading tools, TD Ameritrade has some of the best research data and commentary available for options traders. They also provide users with experts’ commentary, reports, and charts (among many others!) when you look for a quote for a company. Courses are available for users in all levels (Beginner, Advanced, or Expert). Aside from these helpful materials, TD Ameritrade also offers live and online seminars and workshops, and other educational videos. These amazing features come with a heftier price, however. TD Ameritrade’s commission and fees are significantly higher than their competitors. Those who are looking for international market access won’t find it on TD Ameritrade, either. But, if you’re willing to spend more for better tools and data, TD Ameritrade hits the nail on the head. I have provided with you with important factors to consider before choosing an online options broker, and some exceptional online trading platforms. A final word of advice: before choosing the platform you really want to use, make sure that they pass all your requirements – and are equipped with the tools that you want to use. If you’re not sure exactly what you’re looking for in online trading platforms yet, don’t worry – you’ll learn that along the way. You’ll form your preferences over time and learn valuable things about options trading, and you’ll find the best options trading platform for you. All of the platforms listed above are helpful for traders of all levels, so don’t be afraid to try it out and start day trading!

No related posts. Zequek Estrada says. Recently I’ve taken an interest in day trading platforms. This answered some questions I’ve had about it. Although I don’t know if I’ll actually choose a platform, it’s good to be aware that you need to check if your choice is equipped with all the tools that you want to use. Leave a Reply Cancel reply. COMPENSATION DISCLOSURE. Top 10 Explosive Penny Stocks to Invest In 2017 (Hot Picks) Methods For Building And Repairing Credit. 3 Best Small Business Credit Cards for 2017. Popular Categories. Tom Smallwood.

Tom is a former accountant turned entrepreneur. He is not a financial adviser but does tend to give a lot of financial advice to his friends and colleagues. He currently runs a small online venture and blogs about his research and experiences. 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 method 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. 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 247 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. 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 + $0.50contract (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 method 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 email 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 method — 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. 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. 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. Best for Beginners. TD Ameritrade TD Ameritrade fees might be higher, but sometimes you get what you pay for. Consider your entire investment method. 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. The Top 10 Brokerage Firms For Day Trading. Day traders focus on buying and selling stocks on the same-day rather than holding positions overnight, which sets them apart from swing traders or long-term investors. Since they enter and exit trades so quickly, day traders have unique needs when it comes to a brokerage firm. They must carefully consider commission rates, margin rates, execution times, and the financial stability of the broker given that they tend to trade with large amounts of capital. (Related: How to Become a Day Trader). In this article, we will take a look at how to evaluate day trading brokerages and the top ten firms for day traders to consider for their needs.

Tips for Evaluating Day Trading Brokers. The most important considerations for most day traders are commissions, margin rates, and other expenses associated with trading. Even if a day trader can consistently beat the market, the profit from those positions must exceed the cost of commissions. And for a high volume trader, commission costs can easily run into the hundreds or thousands of dollars per day. Traders can check these rates by contacting the broker or checking their website, but most brokers offer special rates for highly active day traders. The next most important consideration for day traders is the quality of the trading platform, which can impact things like execution speed and price quotes. In an environment where more than half of trades are high-frequency trades, day traders can find it very costly to experience a second or two delay in processing their orders. Most brokers offer real-time execution, but slippage remains a concern, and traders should always test-drive a platform to see for themselves what the execution speeds are likely to be. It’s also important for day traders to consider factors like customer service and the broker’s financial stability. Customer service plays a key role during times of crisis – such as a computer crash or other failure when you need to reach support to place a trade. Many brokers offer dedicated account representatives for highly active day traders to assist in this regard. The financial strength of the firm is also important since brokerages can and do go out of business, which can lead to a loss of account value in some cases.

Top 10 Day Trading Brokerages. There is no best brokerage for every day trader since each person has different needs and trading styles. For example, some day traders employ automated computer programs that trade on their behalf, which are only supported by some brokerages. Others prioritize brokers with the lowest commissions or fastest execution speeds to maximize their profit. Based on these factors, here is a list of the top 10 brokerage firms for day traders to consider, as well as what sets them apart from others on the list. Interactive Brokers – Interactive Brokers, often referred to as IB, specializes in day trading and offers direct access to stocks, options, futures, and forex exchange. Commission rates are some of the lowest in the industry and the platform is specially designed for day traders with programmable hotkeys and customizable order types. The platform also supports algorithmic trading and remains popular among institutions. TradeStation – TradeStation is best known for its powerful desktop and mobile platforms, which have built-in support for automated trading and tie in directly to its brokerage services. Their multi-tier commission structure also provides competitive prices for active traders, while the broker is known for its high-quality execution speeds and strong customer support.

Lightspeed Trading – Lightspeed Trading is built for fast execution times with highly competitive multi-tier commissions and several different platform options including RealTick Pro for equities. The broker’s customer support line also has wait times of less than a minute, which is attractive to those who may need support and don’t want to wait on hold very long. TD Ameritrade – TD Ameritrade entered the day trading market with its acquisition of Thinkorswim, which rivals TradeStation in terms of its power and functionality. Unlike IB, TradeStation or Lightspeed, the broker doesn’t offer unbundled rates, but they do still offer competitive commissions for day traders. The platform also has among the best customer service team with well-trained reps and low response times. Fidelity – Fidelity may not be traditionally known as a day trading broker, but its leading order execution and Active Trader Pro platform have put it in the running with the market leaders. The downside is that commissions tend to be more expensive than other brokers in the category and they don’t offer unbundled rates. eTrade – eTrade has become popular among day traders, especially following its acquisition of OptionsHouse. The company’s platforms have received a significant boost after acquiring OptionsHouse, which had acquired unique tools like liveACTION from tradeMonster. The company also offers a 2-second execution guarantee on S&P 500 stocks and every ETF with an average speed of 0.09 seconds. OptionsXpress – OptionsXpress offers a single platform to trade stocks, options, futures and foreign exchange. But, the broker’s real strength lies in options trading where it enables traders to identify options strategies based on their personal risk tolerance and offers competitive commissions in the space. SpeedTrader – SpeedTrader offers direct market access with faster executions and better fills than many other brokers with over 25 different routing options.

Commissions are very competitive and the company offers a variety of different platforms including its all-in-one trading workstation that offers hotkey support and direct access order routing functionality. Generic Trade – Generic Trade provides low cost trading at just 59 cents and access to a solid trading platform, while priding itself on avoiding any salespeople, bells, or whistles. The company also offers relatively low day trading margin requirements, which may make the broker attractive for new day traders. MB Trading – MB Trading, by TradeKing, sets itself apart from other day trading brokerages with its extensive API that enables software-focused traders to integrate easily run their own automated trading applications. The company’s own MBT Desktop Pro and Mobile also offer great options for non-software focused traders. Day trading is among the most challenging professions in the world, but the rewards can be substantial for the few that succeed. If you are transitioning into day trading, the odds are that your current brokerage isn’t the best fit. Consider these brokers that better serve the needs of day traders with lower commissions and faster executions. To optimize your odds of success, choose a broker that’s best suited for your trading method and market of choice. 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. 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 riskreward 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. method 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.

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 $5Trade + No Software Fees. Learn More. This broker does not currently have a special offer. Best Options Trading Brokers and Platforms. NerdWallet offers financial tools and advice to help people understand their options and make the best possible decisions. The guidance we offer and info we provide are deeply researched, objective and independent.

We spent over 300 hours reviewing the top online brokers before selecting the best for our readers. And to help you find the one that’s best for you, we’ve highlighted their pros, cons and current offers. Who is the best options broker today? The answer depends on whom you ask and what they value. For some investors, the best broker for trading options is the one with the cheapest commissions. Others prioritize trading tools, platform design, research, customer service or all of the above. While most of the brokers on our best-of list below would be a good, all-encompassing choice for many investors, we’ve also highlighted the standout candidates in specific areas that matter most to options traders. Unsure what you’re looking for? See how to choose an options broker for more on what can make or break an options trading experience. Summary: Best online stock brokers for options trading. Best for low-cost. Best options trading platform. Best for research and education.

Best overall for options trading. Our top picks cover all the option trader needs — access to high-quality research, analytical tools, a user-friendly platform — at reasonable prices. TD Ameritrade and Interactive Brokers earn high marks for options investors for their advanced trading platforms, deep bench of research and tools, plus their high-caliber options trading capabilities. TD Ameritrade handily serves option traders no matter where they are on the learning curve. The broker’s thinkorswim platform offers a robust options trading experience for active investors seeking professional-grade tools to identify trading opportunities, analyze potential risks and rewards, test trade strategies and quickly place even the most complex options trades. The broker’s web-based Trade Architect platform is for investors just getting into options or those who don’t require a high-octane platform. Its stripped-down, easy-to-use interface won’t overwhelm newbies. And although Trade Architect isn’t as fully stocked with tools and data as thinkorswim, it’s no slouch, either. Intermediate investors will find advanced features like a marketoptions heat map, screening and tradefinder tools, and streaming news. Get details in our TD Ameritrade review.

For cost-conscious, active options traders looking for low costs and a platform with a lot more meat on its bones, Interactive Brokers may be more your style. Interactive Brokers charges just 70 cents per contract with no base fee ($1 minimum order), plus discounts for larger volumes, if you can manage the $10,000 account minimum. Its Trader Workstation platform (with an options method lab) is considered one of the best and most sophisticated around. But watch other fees to ensure that the lower commissions pay off. Both brokers allow prospective clients to test-drive the goods without putting any real money on the line. TD Ameritrade offers a paperMoney virtual trading account to test out the thinkorswim platform. At Interactive Brokers, once customers open a real account (which has a $10,000 minimum funding requirement), they can set up a paper trading account that offers them hands-on practice using IB’s Trader Workstation platform and tools. Best brokers for low-cost options trading. These brokers offer competitively priced options trading commissions and have eliminated or dramatically capped minimum trading fees. In early 2017 most of the mainstream online brokers slashed commissions to levels once reserved for their deep-discount peers. That doesn’t mean that they’re the best deal in town for every investor. For active options traders, eOption earns five stars from NerdWallet for its low options trade commissions. The company charges a fixed $3 base plus 15 cents per contract.

Another plus: eOption is known for having some of the lowest margin rates available. Although eOption charges a $50 annual inactivity fee on accounts that have placed fewer than two trades in the past 12 months or have less than $10,000 in credit or debit balances, the minimum trade workaround isn’t onerous, even for infrequent traders. Charles Schwab’s trade commission of $4.95 base rate plus 65 cents per contract puts it within spitting distance of deep-discount peers. Schwab recently fully took over the old OptionsXpress and incorporated that broker’s options experience into its own platform, with both web-based and mobile functionality. Commissions aren’t the only costs associated with trading options. Platform, data and other fees can quickly cancel out what you save on commissions. See our full reviews of Charles Schwab and eOption for details on what they offer. For those simply looking for a cheap way to execute options trades, Charles Schwab and eOption get the job done. Best options trading platforms. These brokers offer some of the most powerful trading platforms available for a reasonable price. Judging a broker’s trading platform by the number of features it offers is like buying a car based solely on what you read in the dealer brochure. While all investors have their must-have features, what’s more important is how the platform feels when it’s in their hands.

The trading platforms at Ally Invest and TradeStation offer a wide variety of analytical tools, provide stable and speedy trade execution, and allow investors to customize the tools and design to best suit their needs. Unlike TradeStation, Ally Invest (formerly TradeKing) is technically a deep discount broker as reflected in its commissions (options traders pay a $4.95 base plus 65 cents per contract with only one base charge per spread), $0 account minimum and free access to research and data. Frequent traders (those who place 30 or more trades per quarter or who carry a balance of $100,000 or more) pay a discounted $3.95 base and 50 cents per contract. But don’t be fooled by the lower prices: Customers get a lot of platform power for free. Ally is suitable for newer options investors. The browser-based platform resembles the offerings of its pricier competitors and comes with free options trading tools for screening and advanced charting. Navigation is easy and streamlined. Customers can create a custom dashboard with movable modules with the data and features they want to use. The setup extends to what users see across all devices, including mobile and tablet. TradeStation is best left to more experienced, tech-savvy investors who want to experience options trading using the same tools as pro traders. The broker provides all the tools needed to design, test-drive, monitor, automate and speedily execute the most complex trades via direct-market access (no pesky middleman to slow down the process). Its OptionsStation Pro platform is fully integrated into TradeStation’s regular trading platform. An added bonus is the broker’s active investor forums, where traders discuss ideas, ask questions and get help. Access to all of TradeStation’s bells and whistles used to come at a steep $99.95 monthly platform fee for those who didn’t meet account balance or trading activity minimums.

But in March 2017 TradeStation eliminated the service fee, lowered its trade commissions for stocks and options and tossed in free real-time market data and free access to its market-monitoring and portfolio-level back-testing tools. Educational tools and platform tutorials are plentiful, which is a plus: Because of the sophisticated nature of the platform, it may require some time to become familiar with all that it offers. See more in our TradeStation review. Best research and options trading education. Both offer extensive research and data for free, as well as live classes and webinars for beginning and advanced options traders. If you’re new to options trading or want to expand your trading strategies, a broker that devotes its resources to research and customer education is a must. Because Schwab and Fidelity each have offices across the country in addition to their online options education libraries, they’re able to offer in-person guidance and free seminars on how to trade options, as well as one-on-one guidance on using the tools each platform offers. Fidelity’s constantly refreshed library draws from more than 20 providers, including Recognia, Ned Davis, S&P Capital IQ and McLean Capital Management. The full suite is available to customers when they sign into the broker’s web-based platform. And you don’t have to stop digging when you’re away from your computer: Fidelity has a strong mobile app that lets customers access the company’s full suite of research through a mobile browser. Charles Schwab’s options trading capabilities and lineup of trading data and research got a big boost as the company integrated its purchase of OptionsXpress.

In October Schwab re-launched its online platform under the StreetSmart name, with both web-based and mobile functionality, though for now only former OptionsXpress clients have access to the new platform. In the first quarter of 2018, Schwab will begin rolling out the new platform to all clients. While the platform name is changing, Schwab still provides a fully realized suite of offerings for options traders, including trade assessment tools, customizable screeners, access to Schwab analyst options-market commentary, live online webinars and pre-recorded seminars. Best brokers for beginner options investors. These brokers provide ideal conditions (educational resources, user-friendly platforms, customer support and low minimums) for investors just learning the options trading ropes. TD Ameritrade — one of our top overall brokers — ranked highest in this category, too. But since there are many types of beginners with many different preferences, instead of highlighting the category champions we’ve focused on brokers that are excellent candidates in three key areas: Low minimum opening balance requirements. Ally Invest, TD Ameritrade, Merrill Edge: If you’re not yet ready to devote a lot of your capital to options trading, you don’t want to tie up much in an account to meet the minimum. Many of the brokers on our list require no money to open an account. However, industry regulations require that traders maintain a $2,000 minimum to trade options.

Strong customer support. Scottrade and TD Ameritrade: On-call help is particularly handy when starting out. One way to test a broker’s level of service is to contact the company with any questions you have about its option trading offerings before you even open an account. Scottrade is known for its standout customer service and huge physical presence of 500 branches. So is TD Ameritrade, with around-the-clock phone and email support and 100 branches where clients can attend seminars and meet with investment associates. At the end of 2017, TD’s acquisition of Scottrade will be complete, increasing each broker’s ability to serve clients. User-friendly platforms. Ally, Charles Schwab and TD Ameritrade: There’s nothing better than test-driving a broker’s platform before you commit. Check to see if the broker you’re considering offers paper trading (virtual trading on a platform that mimics the real deal) or contact customer service to see if they will set you up with a demo account. As for brokers discussed in this review, Ally Invest’s browser-based platform is intuitive and easy to customize. And both Charles Schwab and TD Ameritrade have multiple platforms customers can use to start learning the ropes, then graduate to more sophisticated tools and trades if desired. Best options trading brokers: summary.

Updated June 30, 2017. Disclaimer: NerdWallet has entered into referral and advertising arrangements with certain broker-dealers under which we receive compensation (in the form of flat fees per qualifying action) when you click on links to our partner broker-dealers andor submit an application or get approved for a brokerage account. At times, we may receive incentives (such as an increase in the flat fee) depending on how many users click on links to the broker-dealer and complete a qualifying action. Best Online Trading Platforms for Day Trading. NerdWallet offers financial tools and advice to help people understand their options and make the best possible decisions. The guidance we offer and info we provide are deeply researched, objective and independent. We spent over 300 hours reviewing the top online brokers before selecting the best for our readers. And to help you find the one that’s best for you, we’ve highlighted their pros, cons and current offers. If you’re an active trader looking to try your hand at beating the market, you probably have a good idea of what you want in a brokerage: low costs, premium research, innovative method tools and a comprehensive trading platform. Below, we’ve selected the best online brokers in a variety of categories so you can choose one based on your personal priorities. One note before you begin: Pattern day traders — as defined by the SEC — must have at least $25,000 in equity in their accounts and be approved for margin trading, regardless of whether their broker’s account minimum is lower. » New to this world? Learn the basics with our guide to how day trading works. Best Online Trading Platforms for Day Trading.

Interactive Brokers: Best overall & for low margin rates TD Ameritrade: Best overall & for trading platform Charles Schwab: Best for trading platform Ally Invest: Best for options trading TradeStation: Best for options trading EOption: Best for low margin rates. Summary: Best Online Trading Platforms for Day Trading. Best trading platform. Best for options trading. Best for lowest margin rates. The best online brokers for day trading. These brokers are our best overall picks because of their competitive pricing and strong trading platforms and tools. TD Ameritrade and Interactive Brokers have that powerful combination that every trader wants: Low commissions paired with advanced trading tools and platforms. Interactive Brokers may have an edge with traders who prefer per-share pricing and can meet the $10,000 account minimum and $10 monthly commission minimum — both of which docked the broker slightly in our star ratings. TD Ameritrade offers a very competitive flat rate and no minimum balance requirement. Both brokerages offer a very extensive investment selection, including futures options and forex trading, while Interactive Brokers also offers precious metals.

The best trading platforms. These brokers offer some of the most powerful trading platforms available, with no minimums or fees. Both top picks, TD Ameritrade and Interactive Brokers, have strong trading platforms. But TD Ameritrade also excels here, as does Charles Schwab . TD Ameritrade offers what may be the best trading platform available, thinkorswim , along with Trade Architect , a second platform designed for simplicity. Charles Schwab also offers two excellent platforms: Streetsmart. com, a Web platform suitable for beginners, and StreetSmart Edge, a more advanced option with elevated charting functionality. Both brokers make all of their tools and platforms available to all customers with no trade activity or balance minimums (taking into account Schwab’s easily avoidable $1,000 account minimum). The best online brokers for options trading. These brokers offer the strongest tools for options traders. Ally Invest and TradeStation are both superior brokers for options traders, though their appeal depends largely on trade activity and platform needs. TradeStation is for seriously committed traders: The company’s platform — which is outstanding — comes with a $99.95 monthly fee, waived only for those who in the previous month carried a $100,000 account balance or traded at least 5,000 shares, 50 options contracts or 10 round-turn futuresfutures option contracts. (Note: In March 2017 the company eliminated monthly service fees for its desktop, mobile and web-trading apps for non-professional subscribers on the per-trade pricing plan.

) Active but low-volume options investors will probably prefer TradeStation’s per-shareper-contract commission schedule ($1 per option contract, no base or ticket charge, with a minimum one contract market or limit order). Options traders at Ally Invest (formerly TradeKing) pay a $4.95 base plus 65 cents per contract with only one base charge per spread. They also get access to a powerful platform with no additional charge, including free options trading tools for screening and advanced charting. Navigation is intuitive, and customers can create a custom dashboard that includes the data and features they want to use. The setup extends to all devices, including mobile and tablet. The online brokers with the lowest margin rates. Traders who utilize margin should prioritize a broker’s margin rates in their search. Our top choice for best online broker wins here, too — in fact, no one comes close to Interactive Brokers when it comes to margin rates, so if that’s your No. 1 priority, you’ll likely find your home there. The broker charges a blended rate based on account balance, but features a calculator on its website to help investors quickly do the math. As noted above, Interactive Brokers does impose monthly trade minimums. EOption has a lower minimum deposit requirement and more reasonable trade requirements, charging a $50 inactivity fee only on accounts that haven’t traded at least twice in the past 12 months or have less than $10,000 in credit or debit balances. Both brokers charge very competitive commissions for stock and options trades.

Best platforms for day trading: summary. Interactive Brokers. Low margin rates. min. $1, max. 0.5% of trade value. Ally Invest. base + $0.65 per contract. EOption. Learn more about day trading before diving in. Day trading is buying and selling stocks within a short time frame, often inside a day. The goal is to capitalize on stocks with rapid and frequent price fluctuations. Day traders often buy a stock they expect to rise in price, or short-sell a stock they expect to fall. Day trading isn’t for the faint of heart — it magnifies all the inherent risks of investing — and should be used as a secondary method, after you’ve invested for long-term goals like retirement. To learn more, read our primer on day trading.

How much money do you need to day trade? The SEC requires that pattern day traders maintain at least $25,000 in equity in their accounts. Under the SEC rules, you’re a pattern day trader if you day-trade four or more times within five business days and the day trades represent more than 6% of your total trading activity in that same five-day period. Day trading, defined by the SEC, is buying and selling or short-selling and buying the same security on the same day. In our view, that means you should have an awful lot of money to engage in day trading, because that $25,000 should represent just a small piece of your overall investment portfolio — the bulk of which should be invested for the long term. What’s the safest way to day trade? Our guide to how to day trade gets into advice for minimizing risk, but as a quick synopsis: Rule No. 1 is only put up money you wouldn’t mind parting with. In other words, treat day trading like gambling, not long-term investing. Beyond that, be sure to do your research before you jump in, and establish an exit plan. It’s easy to make rash decisions when your positions start going bad, so setting rational strategies in advance can help curtail emotional reactions. How do you learn how to day trade? Practice. Many brokers offer virtual trading accounts that essentially let you test the waters with Monopoly money.

It’s a great way to get started without the risk. We’ve put together a list of virtual trading platforms, along with more information about how these work. We highly recommend testing out your trades on a virtual platform before putting your money on the line. What securities are best suited for day trading? Most day traders trade stocks, though you can day trade bonds, currencies or commodities, too. Generally, you want to look for securities that are: Highly liquid, with large trade volume. Relatively volatile. You want frequent price changes, which allows you to make a profit quickly. Known to you. An understanding of the stock’s price history, and how it reacts to various events — earnings reports, economic shifts — is key. Many day traders trade only a few specific stocks, developing expertise in those companies and narrowing their focus. Newsworthy.

Coverage of a stock will trigger people to buy or sell it. As a day trader, you’ll want to follow the news to find trade ideas. » Don’t think day trading is for you? Here are other suggestions for how to invest. Updated Sept. 22, 2017. Arielle O'Shea. Arielle is a personal finance writer at NerdWallet. Her work has been featured by Esquire, Money, USA Today, Forbes and The Associated Press. Read more. Disclaimer: NerdWallet has entered into referral and advertising arrangements with certain broker-dealers under which we receive compensation (in the form of flat fees per qualifying action) when you click on links to our partner broker-dealers andor submit an application or get approved for a brokerage account.

At times, we may receive incentives (such as an increase in the flat fee) depending on how many users click on links to the broker-dealer and complete a qualifying action.