Options Trading Best Brokers
Based on over 100 different variables, here is are the top five brokerages for options trading.
- OptionsHouse - 5 Stars
- Interactive Brokers - 5 Stars
- TD Ameritrade - 4.5 Stars
- TradeStation - 4.5 Stars
- Charles Schwab - 4.5 Stars
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.
|OptionsHouse||Interactive Brokers||TD Ameritrade||TradeStation||Charles Schwab|
|Option Chains - Streaming Real-time||Yes||Yes||Yes||Yes||Yes|
|Option Chains - Total Columns||30||37||33||32||34|
|Watch Lists - Total Fields||29||453||514||318||108|
|Option Positions - Strategy Grouping||Yes||Yes||Yes||Yes||Yes|
|Option Positions - Rolling||Yes||Yes||Yes||Yes||Yes|
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 risk/reward 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. Strategy 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
|Online Broker||Best For||Minimum Deposit||Options Base Fee||Options Per Contract Fee||Overall Rating|
|OptionsHouse||Options overall||$0||$4.95||$0.50||5 Stars|
|Interactive Brokers||Options rates||$10,000||$0||$0.70||5 Stars|
|TD Ameritrade||Options tools||$0||$6.95||$0.75||4.5 Stars|
|TradeStation||OptionStation Pro||$5,000||$5.00||$0.50||4.5 Stars|
|Charles Schwab||Walk-Limit orders||$1,000||$4.95||$0.65||4.5 Stars|