Best Options Brokers
Unlike investing in stocks, mutual funds or ETFs, successful options trading requires entirely different trading strategies. Options traders utilize trading methods to help them profit under any type of market condition. You'll need practice and dedication in order to learn how to trade options. To be consistently successful with this advanced form of trading, you'll need to build up your experience. While many brokers offer the opportunity to trade options contracts, only some have features that focus primarily on options investing. Here are a few of the best brokers for trading options.
OptionsHouse
- Rated Best for Options Traders by Barron’s in both 2009 and 2010 and backed by Peak6, one of the largest options trading houses in the U.S.
- Access to dozens of professional grade tools for analyzing options strategies, analyzing underlying investment vehicles, and much more.
- OptionsHouse offers some of the lowest commissions for options trading for online brokers.
- Virtual trading platform allows options investors to “try it before they buy it” and view results of options trades before risking their investment dollars.
- 90 days of free options investment coaching from knowledgeable professionals with the opening of a new account.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $3.95 | $8.50 | $0.15 | $0.00 | $3.95 | $9.95 |
OptionsXpress
- Allows for investor options trading on the fly with OptionsXpress Mobile.
- Virtual trading tools allow novice and advanced options traders to try new strategies and adjust old strategies using virtual money in order to increase the odds of profitable trades.
- Live chat and toll free numbers available to investors for account and investment assistance.
- Access to tried and true options trading strategies for free as well as hundreds of educational articles and strategy development tools.
- Trading Partners application allows investors to look into the minds of other options traders and experience other trading styles and strategies.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $9.95 | $0.00 | $1.50 | $0.00 | $9.95 | $9.95 + LOAD FEE |
E*Trade
- Access to tried and true options investing strategies designed to allow novice options investors to get on their path to successful options trading.
- Access to a dedicated team of options trading professionals whose only goals is to help you make successful options trading.
- Powerful tools that allow investors to analyze options trades, review in-depth charts, and trade on the fly through state of the art mobile apps.
- Both conservative and aggressive trading strategies are available to help you reach your goals.
- Free options trading educational portal to help novice and advanced options traders improve their odds for success.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $7.99 - $9.99 | $7.99 - $9.99 | $0.75 | $500.00 | $45.00 | $0.00 - $19.99 |
Zecco
- Easy trading order interface that can handle even the most complex options strategies.
- Interactive tools designed to analyze options strategies and calculate theoretical profits or losses based on specific market scenarios as well as how successful a strategy is predicted to be.
- Hundreds of educational articles designed to help you get on your way in options trading.
- Competitive, low-priced options contract trades that make trading options contracts easy and available for many investors.
- Powerful tools allow investors to calculate volatility, time value and much more.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $4.50 | $4.50 | $0.50 | $0.00 | $19.99 | $10.00 |
tradeMONSTER
- Rated 4 ½ stars out of five and called the “Best for Options Traders”.
- tradeMONSTER offers powerful options analytic and research tools all designed for improving investors’ chances for a successful trade.
- Simple, intuitive, flexible and customizable options trading interface that allows investors to make the most of their online experience.
- Video educational articles that not only explain but show novice investors the ropes of options trading.
- Interactive tools allow investors to view and adjust options trading strategies on the fly as well as simulate trades to allow investors to practice trading and view results before risking actual money.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $7.50 | $0.00 | $0.50 | $2,000.00 | $7.50 | $0.00 - $15.00 |
The Basics of Trading Options
Trading options is very different from trading most other securities on the exchange. An option is basically an IOU that allows a buyer the opportunity to buy a stock or other investment product at a later time for a pre-determined price. Now, the holder of the contract has the option to exercise his or her rights under the option contract to buy the underlying security at some point during the contract term, but can choose to walk away if the market didn’t play out the way he or she anticipated.
So, why would anyone need a broker in order to buy and sell options contracts? Well, the obvious answer is that only licensed brokers can buy or sell anything listed on an exchange, but the more important answer is that successfully trading options requires a lot of in-depth research and planning. Anyone can look at a company, determine whether or not the company will probably do well in the future and then buy some stock, but since options have a clearly defined, limited amount of time to become profitable, understanding market trends and how to time investments is critical to the success of the investment.
Options traders can make money in one of two ways:
- Buying options contracts (calls). Investors who buy an options contract hope to “buy low and sell high” meaning that they want the defined price of the underlying instrument to be as low as possible and they hope that the market moves upward, allowing them to realize a profit. Investors who buy options contracts will buy the contract for a premium, and will then purchase the underlying instrument for the contract price. If the market moves upward, the investor can then sell the investment for more than the premium, the purchase of the underlying instrument and the broker’s fees combined.
- Selling options contracts (puts). Investors who sell options contracts want just the opposite. They want to sell the options contract on an investment they own, but hope that the market moves downward so that they can keep the premium on the options they sold and the buyer will walk away from the contract without exercising his or her rights to buy the underlying investment. The seller then gets to keep his stock and the money he earned by selling the options contract.
Anyone who owns an exchange traded investment can write and sell options contracts. While the most common options contracts are written on stock, ETFs and other securities can underlie an option contract.
Buying and selling options is a complex and disciplined way to invest and make money. Novice investors should steer clear unless he or she has the guidance of a financial professional with experience creating and executing sound options trading strategies. These brokers can be found in both full-service and discount brokerages. As with any investment, you should take the time to learn as much as you can about how to trade options before locating a broker with whom you feel comfortable trading so that you fully understand the trading strategy and whether or not it fits with your risk tolerance and trading style.
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