Top 5 Options Trading Platforms

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Options Trading Platforms

According to a report by the New York Stock Exchange (NYSE), there was a noticeable increase in retail involvement in options market trading during the pandemic. The numbers peaked at 48% in July 2022. Despite fluctuations in the following months, it sustained a substantial presence, registering at 45% by July 2023.

Clearly, this study shows that people are becoming more interested in learning about and dabbling in options trading. 

But the fact remains that for beginners and experienced investors, finding an options trading platform that works for you is essential. You may prefer a platform that allows you to get started with complex trades, or you might be looking for one with educational resources to help you get started.

Whatever your options trading experience, you’re sure to find what you’re after in our list of the top 5 platforms for 2024. 

01. Tastytrade

Tastytrade

When it comes to options trading fees, Tastytrade is hard to beat. The contract to open each leg of a trade costs $1, but this is capped at $10 per leg for all options trades performed on the platform. Tastytrade also includes no commission fees for closing positions. 

Users gain access to the platform’s options analytics, which includes the Greeks. This accessibility helps you formulate winning trading strategies. 

The platform also features a liquidity rating indicator, which helps you assess the liquidity of the underlying stocks of available trades. A stock with a market capitalization of $500 million or more and a minimum daily trading volume of $10 million will receive a liquidity rating of 3 stars or above, indicating a robust level of market activity and ease of trading.

Understanding the liquidity of underlying stocks can be vital when making informed decisions. This is useful as it can lead to better trades.

02. E*Trade

E_Trade

E*Trade may not be as cost-effective as others on our list ($0.50 to $0.65 per contract). Still, its design is highly intuitive, and it features excellent educational tools. It also allows you to perform paper trades (simulated trades) to try different strategies before investing your capital. The bottom line is that this is a good choice for options trading newbies. 

One of the best things about this platform is the access it gives users to expert knowledge. E*Trade has partnered with Morgan Stanley to create research reports, podcasts, and articles that give you extensive insights into the world of options trading and all other forms of investing. 

Additionally, E*Trade includes a tool called “Snapshot Analysis,” which provides visual representations of the risk/reward probabilities of options trades. This means you can make trades while knowing the likelihood of gains and losses. 

03. SoFi

SoFi’s online options trading platform is an excellent choice for beginners, as you can invest in options via its web platform or user-friendly mobile app. The platform also provides educational resources that’ll help improve your decision-making. 

SoFi arms you with essential metrics like maximum/profit loss and the breakeven percentage so that you can keep track of your progress and adjust your strategy where necessary.

Plus, it has no contract fees, so you can keep more of your profits to yourself. 

If you’ve never traded before or have little experience, you can take advantage of SoFi’s in-app trading guide. This gives you expert advice on identifying potentially lucrative trades and making the most of SoFi’s features. 

04. InteractiveBrokers

InteractiveBrokers

InteractiveBrokers is the best options trading platform for more experienced investors. It has excellent probability calculators and options screeners and offers many market locations and trading vehicles. 

If you’re an active trader, the commissions are relatively low, at $0.15 to $0.65 per contract. However, if you trade fewer than 10,000 contracts monthly, $0.65 is the lowest commission. So, it’s more suited to advanced traders. 

The platform allows you to trade options globally and access more than 30 market centers. This includes the US, Canada, and Mexico, as well as market centers in South America, Europe, Asia Pacific, and Africa. 

The IBKR Mobile app and the IMPACT app allow you to access all the data you need to make trades and manage your portfolio when you’re on the go. 

Some of the platform’s best features include:

  • The Rollover Options Tool
  • Options Analytics
  • OptionTrader
  • Options Strategy Builder
  • Options Strategy Lab
  • Options Portfolio
  • Volatility Lab
  • Probability Lab

05. Webull

Webull doesn’t charge you fees or commissions on options trades made on its platform. Yet, you still gain access to brilliant features and tools, options trading news, and technical analysis. Its mobile and desktop platforms are both easy to use, and Webull provides breakdowns of multiple analyst ratings. 

One of the best things about Webull is that users gain access to real-time OPRA data once they’ve opened an account. Plus, Webull is partnered with CBOE to give its users access to a Cboe Global Indices Feed.  

Data like this helps you make informed decisions based on up-to-date market information. It can lead to better options and underlying securities analysis, improving risk management and trading strategies. 

What To Look for in the Best Options Trading Platform

The most important things to consider when choosing the right options trading platform include:

  • Fees and commissions: Pay close attention to each platform’s fees and commissions. Decide your limits and how much you will pay on your trades.
  • Educational resources: If you’re new to options trading, look for platforms like SoFi that provide excellent educational resources. This will empower you to make better trading decisions and help you learn more about the world of options trading to improve your game in the future. 
  • User interface: Ensure the platform you choose has an intuitive interface that offers a seamless trading experience. 
  • Integrated mobile apps: You should also choose a platform with an integrated mobile app that makes it easy to make trades and manage your portfolio when you’re away from your desktop devices. 

Final Thoughts

Choosing the appropriate options trading platform is essential for novice and experienced investors. The decision hinges upon individual preferences and requirements. Consider low fees, user-friendly interfaces, educational resources, and advanced analytical tools.

For beginners, a platform with intuitive navigation and educational materials can help you understand the complexities of options trading. Look for ones that offer comprehensive tutorials, webinars, and demo accounts to facilitate learning and experimentation without risking real capital. These features can help build confidence and competence in navigating the options market.

On the other hand, seasoned traders may prioritize platforms with advanced analytical tools and robust research capabilities. Access to real-time market data, customizable charting tools, and sophisticated options analysis software can empower experienced investors to make informed decisions and execute complex trading strategies effectively.

Ultimately, the best options trading platform aligns with your needs, preferences, and level of expertise. Conduct thorough research and compare different platforms to help you make an informed decision and embark on your options trading journey with confidence.

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