Other options trading platforms tested
Some brokers don’t charge commissions for options. We’ve found that the $0 commission brokers are often missing important tools and research. Some of the $0 commission brokers we tested include Firstrade, Robinhood, SoFi Invest , and Webull. Of these, we prefer Webull for its silky-smooth desktop platform.
Best options trading platform tools
Tastytrade, our top pick for options trading for 2023, is an options trader’s dream. The platform is lightning-fast and the workflow is efficient. Analytics appear intuitively when they matter most and adjusting trades on the fly is a piece of cake. Don’t miss the videos and ideas from corporate affiliate tastytrade, as it’ll make you feel as if you have knowledgeable friends on the trading floor.
Our other winners also offer excellent platforms. Web-based Power E*TRADE offers all the tools an options trader could want, and displays them in magnificent form. Attention to detail, such as automatic spread groupings, effortless scanning through StrategySEEK, and easy-to-understand risk/reward data through tradeLAB make Power E*TRADE a truly unique experience.
TD Ameritrade’s thinkorswim platform, both as a desktop platform and on mobile, provides all that you could want for successful options trading, including vast customization, incredible tools and great education. Strategy Roller enables clients to create custom rules and roll their existing options positions automatically.
For professionals, Interactive Brokers takes the crown as the best options platform. Margin rates are outstanding. Its trading platform, Trader Workstation, is powerful, but is also one of the most challenging platforms to learn out of all the brokers we tested for our 2023 review.
Merrill Edge is our recommendation for beginners, due to the ease of use of its options tools and because of Merrill's unique way of presenting stocks and ETFs through their Story formats. Its industry-disrupting Stock Stories make researching stocks an absolute joy for people who don’t live for financial statements. Some brokers offer more tools, other brokers have quicker order entry, but for beginners looking for the whole package, Merrill makes the most sense to us.
Where can I practice options trading?
To practice options trading, choose an options trading platform that offers a free paper trading account. With paper trading, virtual money is used to place options trades in a simulated environment. E*TRADE, TD Ameritrade, TradeStation, and Interactive Brokers all offer paper trading for options.
Options trading platform tools comparison
Here's a summary of the primary options trading features offered by the best options trading brokers. See the end of this guide for a definition of each feature.
Options trading platform pricing comparison
Here's a summary of the pricing for the best options trading brokers.
What is options trading?
Options trading involves buying and selling the rights to buy or sell securities at specific prices at certain dates. Picture betting on a sports game and being able to buy and sell that bet as the game progresses. That, in a nutshell, is how options trading works, though it’s a bit more nuanced. Option prices fluctuate on the price and volatility of their underlying investments and the time remaining until the options expire. Traders use options to speculate, reduce risk, or generate income.
Which trading platform is best for options?
Based on our testing and analysis, here are the best trading platforms for options in 2023.
- Tastytrade - 4 Stars - Best options trading platform and tools, great pricing
- E*TRADE - 5 Stars - Best web-based platform and provides equity tools and research
- TD Ameritrade - 5 Stars - Industry standard thinkorswim platform, equity tools and research
- Interactive Brokers - 4.5 Stars - Best for professional options traders
- Merrill Edge - 5 Stars - Best for beginners
Is Robinhood good for options trading?
Based on our analysis, we don’t find Robinhood to be great for options trading. It doesn’t have the comprehensive research and education of our beginners top pick, Merrill Edge; nor does it offer the rapid-fire trading and analytics offered by our overall options favorite, tastytrade. While Robinhood offers free options trading and is very easy to use, it did not make it into our top five top rated options platforms.
Which is the cheapest options trading brokerage?
Firstrade, Robinhood, SoFi Invest, and Webull do not charge options commissions, exercise or assignment fees. For sophisticated traders who demand cutting-edge technology and analytics, we suggest tastytrade, which charges $1 per contract round-trip but has a cap of $10 per leg ($10 to open, $0 to close), making it relatively inexpensive for traders who take larger positions.
Which broker has free options trading?
Instead of calling their revenue per trade “commissions,” many brokers charge per-contract fees (including some brokers who claim to have "zero commission" options trading). The exceptions are Robinhood, SoFi Invest , Firstrade and Webull, which charge no commissions or fees for options. Of these, we prefer Webull, which has a silky-smooth desktop platform.
What is a call option?
A call option locks in the right to buy a stock (or other security) at a certain price (called the “strike”) until a specific date (the expiration). If the price goes above the strike price, then the call owner can buy the stock for the strike price and sell it for the market price. The premium is what the call buyer pays the call seller for this privilege. If the stock doesn’t rise above the strike price before expiration, the call buyer loses the whole premium. Investors can also sell call options to earn premiums. A contract usually represents a call on 100 shares of stock.
What is a put option?
A put option locks in the right to sell a stock (or other security) at a certain price (called the “strike”) until a specific date (the expiration). If the price goes below the strike price, then the put owner can sell the stock for the strike price, which is higher than the market price. The premium is what the put buyer pays the put seller for this privilege. If the stock doesn’t fall below the strike price before expiration, the put buyer loses the whole premium. Investors can also sell put options to earn premiums. A contract usually represents a put on 100 shares of stock.
Can you get rich with options trading?
Yes, you can get rich with options trading — in theory. The attraction of options trading comes from leveraging a little money to control a lot of stock or some other investment. To become successful at it (and most don’t), you’re going to need to not only be right about the market’s direction, but also the timing. You should master profit/diagrams, implied volatility, and the options Greeks, which quantify the effects of time, price and volatility on option premiums.
How much money do you need for options trading?
You should have at least $5,000 that you are prepared to lose, and speculative options trading should only account for 10% of your portfolio. Though you can get started with as little as a few hundred dollars, that’s more or less rolling the dice. Experienced options traders maintain several positions at once that tend to offset risks, and that can’t be done with a few hundred dollars.
Can I trade options with $100?
Yes you can. But, like penny stock investing, you probably won’t be able to afford buying options that are likely to pay off. Instead, you’ll be forced to buy options that are far away from the exercise price and have limited prospects of ending up in the money by expiration. Well-capitalized traders can survive temporary adversity, while underfunded traders tend to get washed out.
Is options trading risky?
Yes. Options trading is a form of leveraged investing and thus is inherently risky. Any time an investor is using leverage to trade, they are taking on additional risk. Many times, this risk is unforeseen and not easily quantified.
On the most basic level, investors who buy a call or put option are only risking the money they invested in the contract. However, when selling a call or put, if the trade isn't protected (also known as going naked), the investor is taking on potentially unlimited risk.
As a protective measure, there are five options approval levels, and each one requires an application through the online broker platform to unlock. The riskier the options strategy, the higher the approval needed to trade it.
Options trading platform features summary
All of the best brokers for options trading offer the following features.
|Has Education - Options
||Provides a minimum of 10 educational pieces (articles, videos, archived webinars, or similar) with the primary subject being options. All content must be easily found within the website's learning center. Platform tutorials, FAQs, etc. do NOT count.
|Option Chains - Streaming Real-time
||Option chains with streaming real-time data.
|Option Chains - Greeks Viewable
||When viewing an option chain, the total number of Greeks that are available to be viewed as optional columns. Greeks = delta, gamma, theta, vega, rho.
|Option Chains - Quick Analysis
||The ability to jump straight from the option chain to a P&L chart or probability chart for deeper analysis. Viewing a summary P&L within the chain itself also qualifies.
|Option Analysis - P&L Charts
||When analyzing a theoretical option trade, a P&L chart is available.
|Option Analysis - Probability Analysis
||A basic probability calculator.
|Option Analysis - Probability Analysis Adv
||A tool to analyze a hypothetical option position. Displays a probability histogram / chart with optional customizations.
|Option Positions - Greeks Viewable
||View at least two different greeks for a currently open option position.
|Option Positions - Greeks Viewable Streaming
||View at least two different Greeks for a currently open option position and have their values stream with real-time data.
|Option Positions - Advanced Analysis
||Ability to analyze an active option position and change at least two of the three following conditions - date, stock price, volatility - and assess what happens to the value of the position.
|Option Positions - Rolling
||Ability to pre-populate a trade ticket and seamlessly roll an option position to the next relative expiration.
|Option Positions - Strategy Grouping
||Ability to group current option positions by the underlying strategy: covered call, vertical, etc. Can be done manually by user or automatically by the platform.
|Level 2 Quotes - Options
||Level 2 options quotes available.
|Screener - Options
||Offers an options screener. Commonly referred to as a spread creation tool or similar.
StockBrokers.com 2023 Overall Ranking
Here are the Overall rankings for the 17 online brokers who participated in our 2023 Review, sorted by Overall ranking.
Explore our other online trading guides:
For the StockBrokers.com 13th Annual Review published in January 2023, a total of 3,332 data points were collected over three months and used to score 17 top brokers. This makes StockBrokers.com home to the largest independent database on the web covering the online broker industry.
In order to assess the overall trading experience, we test across a wide range of devices and operating systems.
Testing was done on devices for both Apple and Android operating systems. For Apple: iPhone XS with the most current iOS. For Android: Samsung Galaxy S9+, 6.2" 4K Super AMOLED (2960x1440) 64-bit Octa-Core Snapdragon 835 Processor 2.7GHz, 6GB RAM 6.2" with the most current operating system.
For this guide to the best platforms for options trading, our research team rigorously tested platform usability and quality of tools, such as options chains (e.g., optional views, total optional columns, streaming data quality, total Greeks offered), options analysis (e.g., P&L charts, calculators), and option position management (e.g., whether Greeks stream, rolling functionality, grouping availability, and advanced position analysis).
As part of our annual review process, all brokers had the opportunity to provide updates and key milestones and complete an in-depth data profile, which we hand-checked for accuracy. Brokers also were offered the opportunity to provide executive time for an annual update meeting.
Our rigorous data validation process yields an error rate of less than .001% each year, providing site visitors quality data they can trust. Learn more about how we test.
About the Editorial Team
Sam Levine, CFA, CMT
Sam Levine is a longtime writer, investor and educator with nearly three decades of experience in the investing industry. His specialty is making even the most complicated investing concepts easy to understand for beginning and intermediate investors. He holds two of the most widely recognized certifications in the investment management industry, the Chartered Financial Analyst and the Chartered Market Technician designations. Previously, he was a contributing editor at BetterInvesting Magazine and a contributor to The Penny Hoarder and other media outlets.
Blain Reinkensmeyer has 20 years of trading experience with over 2,500 trades placed during that time. He heads research for all U.S.-based brokerages on StockBrokers.com and is respected by executives as the leading expert covering the online broker industry. Blain’s insights have been featured in the New York Times, Wall Street Journal, Forbes, and the Chicago Tribune, among other media outlets.
Carolyn Kimball is managing editor for Reink Media and the lead editor for the StockBrokers.com Annual Review. Carolyn has more than 20 years of writing and editing experience at major media outlets including NerdWallet, the Los Angeles Times and the San Jose Mercury News. She specializes in coverage of personal financial products and services, wielding her editing skills to clarify complex (some might say befuddling) topics to help consumers make informed decisions about their money.
Steven Hatzakis is the Global Director of Research for ForexBrokers.com. Steven previously served as an Editor for Finance Magnates, where he authored over 1,000 published articles about the online finance industry. Steven is an active fintech and crypto industry researcher and advises blockchain companies at the board level. Over the past 20 years, Steven has held numerous positions within the international forex markets, from writing to consulting to serving as a registered commodity futures representative.
TD Ameritrade, Inc. and StockBrokers.com are separate, unaffiliated companies and are not responsible for each other’s services and products.
1 Fidelity Sell orders are subject to an activity assessment fee from $0.01 to $0.03 per $1,000 of principal. Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please read Characteristics and Risks of Standardized Options. Supporting documentation for any claims, if applicable, will be furnished upon request.