Diksia.com - Options trading is a form of derivative trading that allows investors to buy or sell the right, but not the obligation, to buy or sell an underlying asset at a specified price and time. Options can be used for various purposes, such as hedging, speculation, income generation, or portfolio diversification.
However, options trading also involves a high level of risk and complexity, which means that choosing the right platform to trade options is crucial for success. A good platform should offer low fees, a wide range of options products, powerful tools and research, and excellent customer service.
In this article, we will review some of the best options trading platforms available in 2024, and provide some tips on how to choose the easiest one for your needs.
What to Look for in an Options Trading Platform
Before you start trading options, you need to consider some factors that will affect your choice of platform, such as:
- Your trading goals and style: Are you a beginner or an expert? Do you trade options frequently or occasionally? Do you prefer simple or complex strategies? Do you trade options for hedging, speculation, or income? These questions will help you determine the level of sophistication and functionality you need from your platform.
- Your budget and risk tolerance: How much money are you willing to invest and lose in options trading? How much are you willing to pay in fees and commissions? How much leverage do you want to use? These questions will help you assess the affordability and suitability of your platform.
- Your preferred options products and markets: What kind of options do you want to trade? Do you prefer stock options, index options, ETF options, or futures options? Do you want to trade American or European options? Do you want to trade options on domestic or international markets? These questions will help you narrow down your options and find the platform that offers the most relevant and diverse options products and markets for your needs.
Best Options Trading Platforms of 2024
Based on our research and analysis, here are some of the best options trading platforms of 2024, along with their pros and cons:
Tastytrade: Best Overall Options Trading Platform
Tastytrade is our top pick for the best overall options trading platform, as it offers competitive options trading commissions, excellent options trading tools, and superb options-focused education and live video content.
Tastytrade charges $1 per contract to open each leg of an options trade, and caps fees at $10 per leg for any options trade, regardless of trade size. A $0.10 per contract clearing fee is also charged. Tastytrade also offers $0 stock trades, and $2.50 per contract for futures and futures options.
Tastytrade provides multiple tools for analyzing and monitoring options trades, such as the Trade page, the Curve page, the Active Trader page, and the Analysis page. These tools allow users to customize and execute options trades, view real-time quotes and probabilities, adjust and roll positions, and access advanced charting and technical indicators.
Tastytrade also has a library of options-specific content and educational material, such as the Learn Center, the Trade Desk, the Tastytrade Network, and the Tastytrade Blog. These resources help users learn the basics and advanced concepts of options trading, watch live shows and podcasts featuring options experts and traders, and get the latest news and insights on the options market.
Tastytrade is designed more for active and experienced options traders, and only offers stocks, ETFs, options, futures, and cryptocurrency trading. It also has a limited investment selection, and a focus on trading and options that results in weak portfolio analytics and a delayed news feed.
TD Ameritrade: Best for Mobile Options Traders
TD Ameritrade is our top choice for the best options trading platform for mobile users, as it offers a powerful and user-friendly mobile app that allows users to trade options on the go.
TD Ameritrade charges $0 per trade for stocks and ETFs, and $0.65 per contract for options. It also offers a wide range of investment products, such as mutual funds, bonds, forex, futures, and options on futures.
TD Ameritrade’s mobile app, available for iOS and Android devices, allows users to trade stocks, ETFs, options, futures, and forex from anywhere. The app also provides access to advanced options trading tools, such as the Trade Finder, the Strategy Roller, the Profit and Loss Calculator, and the Options Statistics. These tools help users find, execute, manage, and analyze options trades, as well as view real-time data and market news.
TD Ameritrade also offers a desktop platform, called thinkorswim, which is one of the most popular and comprehensive options trading platforms in the industry. Thinkorswim provides users with a variety of options trading features, such as the Strategy Scanner, the Probability Analysis, the Volatility Charts, and the Market Monitor. It also offers a rich selection of research and education resources, such as the Learning Center, the Trader TV, the Chat Rooms, and the Paper Money.
TD Ameritrade is suitable for both beginners and advanced options traders, as it offers a high level of customization and functionality. However, it also has some drawbacks, such as a steep learning curve, a complex interface, and a high minimum deposit of $2,000 for margin accounts.
Interactive Brokers: Best for Advanced Options Traders
Interactive Brokers is our top pick for the best options trading platform for advanced traders, as it offers a professional and sophisticated platform that caters to the needs of experienced and high-volume options traders.
Interactive Brokers charges $0 per trade for stocks and ETFs, and $0.65 per contract for options, with a minimum of $1 per order. It also offers a tiered pricing structure that reduces the per-contract fee based on monthly volume, starting from $0.25 per contract for over 100,000 contracts per month. Interactive Brokers also offers a wide range of investment products, such as mutual funds, bonds, forex, futures, options on futures, and cryptocurrencies.
Interactive Brokers’ platform, called Trader Workstation (TWS), is a powerful and advanced platform that offers a variety of options trading features, such as the OptionTrader, the Strategy Builder, the Volatility Lab, and the Risk Navigator. These features allow users to create, execute, manage, and optimize options trades, as well as view real-time quotes, charts, and analytics.
Interactive Brokers also offers a web-based platform, called IBKR WebTrader, and a mobile app, called IBKR Mobile, which provide access to some of the options trading tools and features available on TWS. It also offers a wealth of research and education resources, such as the Traders’ Insight, the IBKR Quant Blog, the IBKR Campus, and the IBKR Webinars.
Interactive Brokers is designed for professional and high-volume options traders, as it offers a low-cost and high-performance platform. However, it also has some limitations, such as a steep learning curve, a complex interface, and a high minimum deposit of $10,000 for regular accounts and $100,000 for portfolio margin accounts.
E*TRADE: Best for Beginner Options Traders
E*TRADE is our top choice for the best options trading platform for beginners, as it offers a simple and intuitive platform that allows users to learn and practice options trading with ease.
E*TRADE charges $0 per trade for stocks and ETFs, and $0.65 per contract for options. It also offers a wide range of investment products, such as mutual funds, bonds, forex, futures, and options on futures.
ETRADE’s platform, called Power ETRADE, is a web-based platform that offers a variety of options trading features, such as the Options Chain, the Strategy Scanner, the Trade Lab, and the Snapshot Analysis. These features allow users to view, analyze, and execute options trades, as well as see the potential risk and reward of each trade.
ETRADE also offers a mobile app, called ETRADE Mobile, which provides access to some of the options trading tools and features available on Power ETRADE. It also offers a desktop platform, called ETRADE Pro, which is more suitable for advanced and active traders, as it offers more options trading features, such as the OptionsHouse, the LiveAction, the StrategySEEK, and the TradeCYCLE.
ETRADE also offers a wealth of research and education resources, such as the ETRADE Knowledge, the ETRADE Education Center, the ETRADE Webinars, and the E*TRADE Community. These resources help users learn the basics and advanced concepts of options trading, access market data and news, and interact with other traders and experts.
E*TRADE is ideal for beginner and intermediate options traders, as it offers a user-friendly and easy-to-use platform. However, it also has some drawbacks, such as a lack of customization and functionality, and a high minimum deposit of $2,000 for margin accounts.
Robinhood: Best for Low-Cost Options Trading
Robinhood is our top pick for the best options trading platform for low-cost traders, as it offers commission-free options trading, along with commission-free stock and ETF trading.
Robinhood charges $0 per trade for stocks, ETFs, and options, and also offers a wide range of investment products, such as cryptocurrencies, fractional shares, and cash management.
Robinhood’s platform is a mobile app, available for iOS and Android devices, that allows users to trade stocks, ETFs, options, and cryptocurrencies from anywhere. The app also provides access to basic options trading tools, such as the Options Chain, the Options Calculator, and the Options Strategies. These tools help users view, analyze, and execute options trades, as well as see the potential profit and loss of each trade.
Robinhood also offers a web-based platform, which provides access to some of the options trading tools and features available on the app. It also offers a wealth of research and education resources, such as the Robinhood Learn, the Robinhood Snacks, the Robinhood Newsfeed, and the Robinhood Podcast. These resources help users learn the basics and advanced concepts of options trading, access market data and news, and get the latest insights and tips on the options market.
Robinhood is suitable for casual and low-cost options traders, as it offers commission-free options trading and a simple and easy-to-use platform. However, it also has some limitations, such as a lack of advanced options trading features, a limited investment selection, and a poor customer service.
How to Compare and Choose the Easiest Platform to Trade Options
Now that you have learned about some of the best options trading platforms of 2024, you might be wondering how to compare and choose the easiest one for your needs. Here are some tips on how to do that:
- Compare the fees and commissions: The fees and commissions charged by different platforms can have a significant impact on your profitability and return on investment. Therefore, you should compare the fees and commissions of different platforms, and choose the one that offers the lowest and most transparent pricing structure for your trading volume and frequency.
- Compare the options products and markets: The options products and markets offered by different platforms can affect your trading opportunities and diversification. Therefore, you should compare the options products and markets of different platforms, and choose the one that offers the most relevant and diverse options products and markets for your trading goals and style.
- Compare the options trading tools and features: The options trading tools and features provided by different platforms can affect your trading performance and efficiency. Therefore, you should compare the options trading tools and features of different platforms, and choose the one that offers the most powerful and user-friendly options trading tools and features for your trading level and strategy.
- Compare the research and education resources: The research and education resources offered by different platforms can affect your trading knowledge and skills. Therefore, you should compare the research and education resources of different platforms, and choose the one that offers the most comprehensive and helpful research and education resources for your trading needs and interests.
- Compare the customer service and support: The customer service and support provided by different platforms can affect your trading experience and satisfaction. Therefore, you should compare the customer service and support of different platforms, and choose the one that offers the most responsive and reliable customer service and support for your trading queries and issues.
Conclusion
Options trading can be a rewarding and profitable way to invest, but it also requires a reliable and easy-to-use platform. In this article, we have reviewed some of the best options trading platforms of 2024, and provided some tips on how to choose the easiest one for your needs.
We hope that this article has helped you find the best options trading platform for your needs, and that you will enjoy trading options with ease and confidence. Happy trading!
