Options enable you to go long or short on stocks and other asset classes with a much larger position size than your brokerage account balance allows.
In this comparison guide, I discuss some of the best options trading platforms for supported markets, low fees, and other important metrics.
Also consider: My guide to choosing a broker
Browse the top options trading platform May 2023
Below, I reveal a selection of options trading platforms that are suited for a variety of traders in the US.
Robinhood – Best options trading platform for beginners
I found that Robinhood is a popular broker for first-time options traders in the US – especially those that have a limited budget. After all, there is no minimum deposit requirement to meet when opening an account with Robinhood.
Robinhood supports options trading on most major US-listed stocks and ETFs. When options trading at Robinhood, you will have access to an intermediate dashboard that provides access to technical indicators like the MACD and RSI.
Multiple options trading strategies are supported, inclusive of straddles, vertical spreads, and strangles. Robinhood also offers a handy watchlist that enables you to keep an eye on the options markets in real-time.
Both calls and puts are supported, so you will be able to long or short on your chosen stock or ETF options market.
What I like about Robinhood
I found that Robinhood is one of the best options trading platforms for low fees. Not only can you trade options without paying any commissions, but conventional contract fees are waived.
Robinhood’s commission-free offering also extends to standard stocks and ETFs, as well as cryptocurrencies.
There are no deposit fees charged by Robinhood, either. With that said, I should make it clear that you will need to limit your options trading activities to three trades within a five-day period, should you wish to avoid the pattern day trader rule.
If you need to place a higher frequency of trades, you will need to have at least $25,000 in your Robinhood account.
- Popular options trading platform for beginners
- No options trading commissions or contracts fees
- No minimum deposit requirement
- Options dashboard will be too simplistic for advanced traders
- Does not offer options for currencies or commodities
- Standard account limits instant deposits to $1,000
Interactive Brokers – Highly-advanced options trading suite
You might like Interactive Brokers (IBKR) if you are looking for an options trading platform that offers access to a vast range of global markets. In addition to US-listed options, IBKR supports 30 international exchanges.
This includes options markets in North and Central America, Europe, and Asia-Pacific. I should, however, make it clear that Interactive Brokers is an options trading platform that is best suited for advanced traders.
This is especially the case when trading via the Interactive Brokers professional suite, which is packed with specialist tools for buying and selling options.
What I like about Interactive Brokers
I like that Interactive Brokers offers an unrivaled range of options trading features, such as a strategy builder, volatility lab, profitability estimations, technical and economic indicators, and backtesting capabilities.
I also like that Interactive Brokers offers a native mobile app for iOS and Android, which enables you to keep tabs on your options trading positions.
I also found that IBKR offers super-low fees when options trading, but specific pricing will depend on your monthly volume and the cost of each options premium.
For instance, when trading less than $10,000 in a month, premiums of under $0.05 cost just $0.25 per contract. While premiums above $0.10 cost $0.65 per contract.
- Advanced options trading platform for professionals
- 30+ global options markets
- Unrivalled support for high-level options trading strategies
- Not suitable for beginners
- The lowest options fees require large trading volumes
- Account onboarding can be slow
Capital at risk.
E*TRADE – Low options trading fees for active traders
E*TRADE is an established online broker that is backed by Morgan Stanley. E*TRADE supports a wide range of asset classes, which, in addition to options, includes stocks, ETFs, bonds, and mutual funds.
When trading options at E*TRADE, you will have access to individual stocks and index funds. Options trading fees will depend on the number of trades that you place within a three-month period.
For instance, when trading fewer than 30 times, you will pay $0.65 per options contract. This is reduced to $0.50 when placing 30 or more options trades within the respective quarter.
What I like about E*TRADE
I like that E*TRADE has a wide spectrum of options trading tools on its proprietary dashboard. This includes everything from risk/reward probabilities, spectral analysis, risk slides, and customizable options chains.
I found that E*TRADE supports a sizable selection of options trading strategies, but access will depend on your account level. For instance, all traders have access to buy-writes, covered calls, married puts, and cash-secured puts.
But to deploy long straddles and strangles, you will need to be on level two. There are four levels in total and only the highest tier supports naked calls.
- No options trading commission
- Contract fees start from $0.65 but are reduced when trading more frequently
- A sizable range of options trading tools and strategies supported
- You need to place 30 or more trades in a quarter to reduce your contract fees
- Some strategies require you to upgrade your account level
- Only supports stock and index options
Webull – Zero-fee options trading via multiple device types
Webull is a popular options trading platform that also supports stocks, ETFs, and cryptocurrencies. All supported markets at Webull can be traded without paying any commission.
Moreover, Webull does not charge any contract fees when options trading. It also waivers assignment and exercise fees. Although Webull is often used by first-time options traders, its platform is more than suitable for intermediate and advanced traders.
For instance, the Webull dashboard supports technical indicators, charting drawing tools, and customizable options chains.
What I like about Webull
In addition to its commission-free pricing structure, I like that Webull is accessible via dedicated desktop software for Mac, Windows, and Linux. Webull also supports options trading on its web-based platform in addition to a native mobile app for Android and iOS.
I also like that Webull supports 11 options trading strategies. This includes popular strategies like straddles, iron condors, and covers. There is no minimum deposit requirement at Webull, but do take into account the pattern day trader rule.
Finally, I also like that Webull offers a paper trading account, which will appeal to both beginners and advanced options traders alike.
- 11 options trading strategies
- No commissions or contract fees
- Trade via browsers, desktop software, or a mobile app
- Customer support can be difficult to reach
- More advanced options tools available elsewhere
- Does not support commodity options
TD Ameritrade – Trade options via the feature-rich thinkorswim platform
TD Ameritrade’s thinkorswim platform is ideal for experienced options traders, considering just how many features and tools are available. For instance, thinkorswim comes with a proprietary statistics tool that compares options pricing with the five-day average.
This will enable you to assess unusual options trading conditions. You can also use thinkorswim to evaluate prior stock earnings per share against current options prices.
This is in addition to more than 400+ technical and economic studies, not to mention drawing tools and fully customizable charts. These tools will, however, only be suitable if you know your way around an advanced trading suite.
What I like about TD Ameritrade
I like that TD Ameritrade offers a simple and transparent pricing model. For instance, you won’t pay any commissions when trading options and contract fees are fixed at $0.65. Moreover, there are no fees associated with options exercises or assignments.
I also like that TD Ameritrade offers competitive margin trading fees, albeit, to get the best rates you will need to trade options in larger volumes. In addition to options, TD Ameritrade is also popular for trading futures, as well as stocks, mutual funds, and bonds.
- 400+ technical and economic studies via thinkorswim
- High-level options trading and analysis tools
- Simple and transparent pricing structure
- Most analysis tools will not be suited for first-time options traders
- No support for debit/credit cards
- Lowest margin rates require large monthly volumes
How to pick the best broker for options trading
In the sections above, I reviewed some of the most popular brokers for options trading. However, no two options trading platforms are the same, so it is important that you do your own research.
When searching for the best options trading platform, consider the following metrics.
Supported options markets
The first metric to consider when choosing an options trading platform is the type of markets it offers access to.
In most cases, you will be able to trade stock and ETF options from the US markets. Some online brokers, such as IBKR, also offer access to more than 30 global exchanges. This will give you a lot more flexibility when it comes to entering and exiting suitable options positions.
Some options trading platforms also support other asset classes, such as currencies and commodities.
Ultimately, just make sure that your chosen options trading platform supports your preferred market before proceeding.
Options trading fees
You should also consider what fees you will need to pay when options trading. All of the brokers that I discussed earlier enable you to trade US-listed options without paying any commission.
However, it is likely that you will still need to pay contract fees. This fee is charged for each options contract that you trade.
For example, TD Ameritrade and E*TRADE both charge $0.65 per contract. In the case of Robinhood and Webull, however, there are no contract fees to pay at all.
Minimum deposit requirement
You should also consider the minimum deposit requirement when selecting an options trading platform.
Most brokers in the US support fee-free payments across ACH and bank wires, but this is worth checking nonetheless.
Options trading suite
When trading options online, you will be entering a highly complex financial marketplace. And as such, you will need to ensure that your chosen options trading platform offers a suitable trading suite that aligns with your prior experience.
For example, I found one of the best options trading platforms for beginners is Robinhood. The reason for this is that the Robinhood options platform is a lot more basic when compared to other providers, such as IBKR.
With that said, Robinhood still supports a range of notable tools that will appeal to traders, such as technical indicators and solid pricing feeds.
On the other hand, if you have prior experience in trading options online, the Robinhood charting platform will likely not suffice.
Instead, you might be more suitable for an advanced trading suite, such as thinkorswim by TD Ameritrade.
Supported options strategies
In addition to the trading suite itself, you should also consider what options strategies the respective broker supports.
This generally follows suit with what I discussed above. By this, I mean that beginner-friendly platforms like Robinhood come with support for basic options strategies.
In comparison, at E*TRADE, traders will have access to more advanced strategies such as naked calls and iron butterflies.
Strike prices and expiry dates
Another important consideration to make when choosing a broker for options trading is how much flexibility you will have with strike prices.
This is the price that your options trade will need to surpass to make a profit, should you hold until expiry.
It’s best to choose a platform that offers a broad selection of strike prices, as this will give you more options when deploying a position.
Additionally, it is also important to assess what options you will have regarding expiry dates. For instance, some brokers offer options on a weekly, monthly, and quarterly basis.
I should also stress the importance of choosing an online broker that offers American-style options. In doing so, you will have the freedom of closing your options positions at any given time on or before the expiry date.
In contrast, European-style options must be held until the date of expiry. This means that you will be unable to lock in profits or limit a losing trade before the options expire.
All of the brokers that I discussed earlier offer American-style options.
Options demo account
If you are getting into options trading for the first time, I strongly suggest that you consider an online broker that supports a demo account.
This will allow you to trade puts and calls without risking your own money. The demo account will mirror the actual options markets in real-time, which will enable you to learn and perfect a suitable trading strategy.
Webull is a top option when it comes to paper trading accounts. There are no limits to the amount of paper money that you can utilize, nor any time restraints.
Options trading requires you to stay abreast of short-term volatility. As such, it is wise to select an options broker that offers a native mobile app.
This will enable you to cash out a winning or losing position at any given time, rather than needing to wait until you are back at your desktop device.
How much money do you need to trade options?
One of the main attractions of trading options is that you can enter a position with a lot more money than you have available in your brokerage account.
This is because when trading options, you will only need to cover the premium. This is the fee that you pay to enter the trade and it generally averages 5-10% of the position size.
The premium that you pay will need to be deducted from any profits that you make from the options trade.
Moreover, if your options expire above or below the target strike price (depending on if you have puts or calls), you will lose the premium in its entirety.
Pattern day trader rule
Options trading is a short-term strategy and as such, you will need to factor in the pattern day trader rule.
Put simply, you will need to have $25,000 in your brokerage account if you enter more than four options trades within a five-day period.
To avoid the $25,000 balance requirement, you will need to ensure that you do not trade more than the pattern day trader rule permits.
How do you start trading options?
In this section, I explain the basic steps required to get started with an options trading position with an online broker.
Step 1: Choose a suitable broker for options trading
The first step is to ensure that you choose a suitable online broker that supports options trading.
Make sure that the broker offers a demo account facility, alongside low fees and plenty of supported markets.
Step 2: Review strike prices and expiry dates
Once you have access to a demo account that supports options, then the next step is to review the current markets in terms of strike prices and expiry dates.
As a simplistic example, let’s say that you are interested in trading Apple stock options.
Your broker will list a selection of strike prices alongside the respective premium that needs to be paid to enter the market.
For instance, let’s say that Apple stock options have a strike price of $160 and will expire in three weeks.
This means that you will need to speculate on whether you believe that Apple stock will be trading higher or lower than $160 on the date that the options contracts expire.
Step 3: Evaluate options premium
In order to place an options trade, you will need to pay a premium. The premium can and will vary considerably depending on the strike price and expiry date, as well as the asset that is being traded.
The key takeaway is that the higher the probability that the options trade will land in the money (ITM) on the date of expiry, the more you will need to pay via the premium.
The premium will be quoted per contract and then multiplied by the number of contracts that wish to buy.
Crucially, the total premium that you pay represents your total exposure to the options trade. For instance, let’s suppose that the premium is $16 per Apple options contract for your preferred strike price.
If you decide to buy 20 contracts, this arepresents a total premium of $320. This means that if you allow the options contracts to expire and they do not land ITM, then your total loss will amount to $320 – and no more.
Step 4: Calls or puts
At this stage, you should have selected a stock or ETF to trade and have assessed the current state of play in terms of strike prices, expiry dates, and premiums.
Next, you will need to decide whether you wish to purchase calls or puts.
In simple terms, if you believe that the value of the asset will be higher than the strike price when the options expire, then you will need to purchase calls.
If you believe that the options will close below the strike price upon expiry, then you will need to purchase puts.
Step 5: Place order
The final step is to place your chosen options trade. Just remember, when trading options via a demo account, you will not be risking any money.
As such, it’s best to spend as much time as you need before using your own capital to trade.
Nevertheless, after you have purchased calls or puts and confirmed the order, you will then need to watch over the markets.
As you will be trading American-style options, you can close the trade whenever you wish, during standard market hours.
The value of your options trade will rise and fall throughout the day, depending on the market forces of demand and supply.
Do you need a broker to trade options?
Yes, you will need to use a regulated online broker should you wish to trade options.
The broker you choose may depend on your trading style or the level of risk you want to expose yourself to. The broker will connect you to the chosen market and ensure that your options trade is executed in real-time.
In return for facilitating your trade, the options broker will likely collect a fee for each contract that you purchase.
Some brokers also charge a commission when trading options, but this is now more of a rarity.
In summary, I have revealed some of the most popular options trading platforms in the US to suit all investor profiles.
Most options brokers enable you to get started without meeting a minimum deposit requirement. But do remember that if you execute four or more options trades within a five-day period, then you will be defined as a pattern day trader.
This means that you will need to have at least $25,000 in your brokerage account to continue trading.
The Best Options Trading Platforms FAQs
Do all brokers offer options trading?
Which vertical option spreads should you use?
The vertical spread options that you use will depend on your strategy. If you are bullish on an asset, then bull call and bull put spreads will be suitable. If you are bearish, bear call and bear put spreads will be more suitable.