Finding the best options trading platform is an important first step to begin options trading. An options trading platform can make or break a trader. Some of the best options brokers are TastyWorks, TradeStation, and TD Ameritrade. You may be asking what makes a platform the best one? It all depends on you prefer as a trader. Do you want a platform with cheapest commissions? Would you rather have good trading tools, design and customer service? Those are some questions to think about as you begin to research what options trading platform would work best for you.
- Here are some of the best options trading platforms:
- TD Ameritrade
- Interactive Brokers
- Charles Schwab
There are somethings to consider when you’re looking for the best options trading platform. Options trading can be complicated. There’s definitely more involved with an option than stock trading. Choosing a broker you like allows you to practice and research as well as place and track trades.
If you’re new to options trading you may want to find a broker that includes fee education with their platform. This can include free courses, webinars and one on one guidance whether online or on the phone. The best advice out there is to spend time as a student.
Study like crazy and take advantage of the resources offered to you. Options courses help you to learn different aspects of trading like put and call options explained as well as the implied volatility formula and it’s meaning.
Options have many moving parts. As a result, there is a lot more that goes into profit and loss. It’s imperative to learn stock training. This requires study and discipline as well as practice.
A platform that has a simulated account is a great choice. It allows you to practice without using real money. You can see how options chains work along with figuring out how time decay or open interest can affect your contracts.
Easy to Use Platforms
When choosing the best options trading platform you want a broker that is easy to use. The platform itself should be user friendly. You wouldn’t want to sign up for a platform that you ultimately hate. You wouldn’t be excited to trade every day.
Again this is where simulated accounts come in handy. Not only does it allow you practice, you can see first hand if this is a platform you’d want to use.
Are the tools you need easy to find or are you constantly having to hunt for them? Is placing an order easy? Does it have the difference between market order and limit order? Does it allow you to create alerts and does it have a mobile platform?
If you can’t be in front of a computer but still want to trade you want a broker that has a good user friendly mobile platform. Trading apps have come along way and are a great way to trade on the go.
You also want a broker that allows alerts. Alerts can be set to be sent to your phone though text or email which in turn allows you to go to your mobile app to place the trade.
You’ll want a platform that is reliable and fills orders quickly. The frustration of not getting an order filled on time and missing a move is real. If you’re day trading options for income you need a platform that fills and closes orders as quickly as possible.
This is a Thinkorswim options chain. This is how place trades. You can customize the layout to show what you value when placing an options trade. This particular chain has volume, open interest, implied volatility along with the bid, ask, strike price and expiration date.
Commissions are something people really take into account when choosing the best options trading platform. Commissions actually aren’t as important as the things listed above. Having a fantastic broker and maybe paying a little more is ok.
Of course you can always call your broker and see if they’ll lower it. Thinkorswim is usually great about that. Yes smaller commissions mean keeping more of your profit but there’s also another side to that.
Low commission brokers can offer those rock bottom prices because their platforms have the bare minimum in trading tools. Sure you may pay a little more for a larger broker but you also have access to a whole lot more.
There are a few different brokers that offer options trading. Thinkorswim, Fidelity, Charles Schwab to name a few. Thinkorswim has an excellent platform. They have a fantastic simulated account and their customer service is bar none. You also don’t need an account minimum to open one.
Charles Schwab also offers a great platform. It also has great customer service and their options platform is easy to use. You do need a minimum of $1,000 to open an account.
Fidelity is another popular broker. While being known mostly as a retirement broker is does have a good trading platform and research tools. You need a minimum of $2,500 to open an account.
Interactive brokers also has options trading. They may be known primarily as a day trading platform but they do offer options as well; which you can day trade. You do need a minimum of $10,000 to open an account.
The Bottom Line
Finding the best options trading platform all depends on your preference as a trader. Find out what you deem most important for you as a trader then choose a broker based on that. Take our options trading course to learn more about what’s required to trade options.