Best Retail Options Broker

Best retail options broker

The best online brokers 2019 review (9th annual) took six months to complete and produced over 30,000 words of research.

Best retail options broker

Here's how we tested.

Next to active traders, there is arguably no customer more valuable to an online broker than an options trader. Options trades offer brokers much higher profit margins 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 product innovation and competitive pricing.

Best Options Trading Platforms

Here are the best options trading platforms, based on over 100 variables.

  • E*TRADE - Best for options overall
  • TradeStation - Low costs, great platform
  • TD Ameritrade - Best options tools
  • Interactive Brokers - Best for professionals
  • Charles Schwab - Unique order types

Best for options overall

Built as a web-based platform, Power E*TRADE innovates and delivers speed, ease of use, and the tools needed for traders to succeed.

Compare options trading brokers in the UK

Once again, in our 2020 Review, Power E*TRADE won our award, "Best Web-Based Platform." E*TRADE also took our top spot for options trading. Read full review

Low costs, great platform - Open Account
Promo Offer: Commission-Free Trades on Stocks, ETFs & Options Trades

As a trading technology leader, TradeStation shines.

Options trading is a breeze using OptionStation Pro, a built-in tool within the TradeStation desktop platform designed for streamlined trading and robust analysis. Options tool capabilities include custom grouping for current positions, streaming real-time greeks, and advanced position analysis, to name a few. Read full review

Best options tools

Once again, for the ninth consecutive year, TD Ameritrade is number one for trading platforms and tools, thanks to desktop-based thinkorswim.

Whether day trading, options trading, futures trading, or you are just a casual investor, thinkorswim is a winner.

What is options trading?

Read full review

Best for professionals - Open Account
Exclusive Offer: New clients that open an account today receive a special margin rate.

Trading tools within the Trader Workstation (TWS) platform are designed for professional options traders.

From algo trading to Options Strategy Lab, Volatility Lab, Risk Navigator, Market Scanner, Strategy Builder, and Portfolio Builder, Interactive Brokers is built for professionals. Options commissions start at $.70 per contract with a $1.00 minimum and no maximum. Read full review

Unique order types

Schwab's flagship downloadable trading platform, StreetSmart Edge, provides most of the bells and whistles options traders and day traders need to succeed.

Safe investment bond option

For options traders, Schwab's All-in-one trade ticket, alongside the proprietary Walk Limit order type, are both excellent.

Read full review

Best Options Trading Tools

Platform wise, web-based Power E*TRADE offers all the tools an options trader could want, and displays them in magnificent form.

Our best options brokers have a wealth of tools that help you manage risk

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.

Power E*TRADE options trading Snapshot Analysis tool.

Keeping the spotlight on excellent platforms and tools for options traders, TD Ameritrade's thinkorswim and TradeStation cannot be left out.

Strategy Roller from thinkorswim enables 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 have come to expect from thinkorswim.

TD Ameritrade thinkorswim options trade profit loss analysis.

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.

Trader - Made $41 Million Profit in 3 Years Option Trading (Karen the Supertrader)

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.

TradeStation OptionStation Pro.

If unique features and functionality matter 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).

The broker also offers Idea Hub, which uses targeted scans to break down options trade ideas visually.

For professionals, Interactive Brokers takes the crown.

11 Best Options Trading Brokers and Platforms of January 2020

At Interactive Brokers, there is no base charge, and the per-contract rate is just $.70. Additional savings are also realized through more frequent trading.

Best retail options broker

That said, the broker is built primarily for professional traders and requires a $100,000 minimum deposit for margin accounts. Lastly, its trading platform, Trader Workstation, is the most challenging platform to learn out of all the brokers we tested for our 2020 review.

How i trade options pdf

Interactive Brokers Trader Workstation TWS options trade analysis.

There’s a healthy variety of reputable brokers to choose from in the world of options trading. At a minimum, investors should expect their broker to include scanning, P&L analysis, risk analysis, and easy-order management.

Position management functionality and tying the experience together is where platforms such as Power E*TRADE and thinkorswim by TD Ameritrade distinguish themselves.

Best retail options broker

Options Trading Features

Ultimately, choosing an options brokers comes down to personal preference and weighing priorities, such as cost versus ease of use and tool selection.

On a feature by feature basis, all of our top five finishers this year offer the following features to their options trading customers.

Has Education - OptionsProvides 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.

Best retail options broker

Platform tutorials, FAQs, etc do NOT count.

Option Chains - Streaming Real-timeOption chains with streaming real-time data.
Option Chains - Greeks ViewableWhen 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 AnalysisThe 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 ChartsWhen analyzing a theoretical option trade, a P&L chart is available.
Option Analysis - Probability AnalysisA basic probability calculator.
Option Analysis - Probability Analysis AdvA tool to analyze a hypothetical option position.

NerdWallet's best online brokers

Displays a probability histogram / chart with optional customizations.

Option Positions - Greeks ViewableView at least two different greeks for a currently open option position.
Option Positions - Greeks Viewable StreamingView at least two different greeks for a currently open option position and have their values stream with real-time data.
Option Positions - Advanced AnalysisAbility 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 - RollingAbility to pre-populate a trade ticket and seamlessly roll an option position to the next relative expiration.
Option Positions - Strategy GroupingAbility 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 - OptionsLevel II options quotes available.
Screener - OptionsOffers a options screener. Commonly referred to as a spread creation tool or similar.

Best Brokers for Options Trading (Summary)

Online BrokerBest ForMinimum DepositBase FeePer Contract FeeOptions Rating
E*TRADEOptions overall$0 $0 $0.65 5 Stars
Interactive BrokersOptions rates$0$0$0.705 Stars
TD AmeritradeOptions tools$0 $0 $0.65 4.5 Stars
TradeStationOptionStation Pro$0 $0 $0.50 4.5 Stars
Charles SchwabWalk-Limit orders$1,000 $0 $0.65 4.5 Stars

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For the ninth annual best online brokers review published in February 2019, a total of 4,544 data points were collected over six months and used to score brokers.

Best retail options broker

This makes home to the largest independent database on the web covering the online broker industry.

Participation is required to be included.

Coinbase is on a pre ipo firing spree

Each broker completed an in-depth data profile and provided executive time (live in person or over the web) 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.

What are options and how do you trade them?

Learn more about how we test.

Still aren't sure which broker to choose? Ask us a question! Whether you are a beginner investor learning the ropes or a professional trader, we are here to help. Email us your online broker specific question and we will respond within one business day. It is our satisfaction guarantee.