Best Options Trading Platforms of 2021

The best options trading platforms might give you an edge in the market

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Options trading is a high-risk area of the investment world where you can pay for the option to buy or sell a specific security at a set price on a future date. Based on fluctuations in market prices for those securities, the value of options rises and falls until their maturity date.

If you want to trade options, you’ll need a brokerage account that supports them. Each platform is unique and has its own pros and cons, so it’s best to understand what you want before you sign up with a broker.

Learn more about the best options trading platforms to determine which one may be best suited for your needs.

Best Options Trading Platforms

Best Options Trading Platforms of 2021
Best Options Trading Platforms of 2021

Best Overall : Tastyworks

Tastyworks logo

 Tastyworks logo

Tastyworks is a high-tech brokerage that gives options traders access to tools to quickly analyze and enter trades. It offers desktop, browser, and mobile trading platforms with similar features no matter which one you use. It also has unique tools that could help you make trading decisions on the fly, including quick rolls for options positions and quick order adjustments. The platform also gives you access to videos of tastyworks traders executing options trades, discussing strategy, and sharing research.

Options on stocks and exchange-traded funds (ETFs) have no base commission and require a $1 per contract fee when opening a trade ($10 maximum per trade “leg,” which is a trade that takes place in an order with more than one component). There is no commission to close an option position. Options on futures cost $2.50 per contract to open, with no closing commission.

  • Trade costs: $1 per contract to open, no commission to close (stocks and ETFs)
  • Account minimum: None
  • Recurring fees: None
What We Like
  • Options trading is the primary focus

  • Tastyworks network gives opportunity for traders to learn from one another

  • Commission caps for large trades


What We Don't Like
  • Per-contract fees are higher than competitors’

  • Fewer investments available outside of options

Runner-Up, Best Overall : ETrade

ETrade logo

 ETrade logo

Etrade is one of the oldest online brokerage firms and offers an excellent overall options trading experience. Active traders enjoy a low 50-cent-per-contract price on stock or ETF options when they make at least 30 trades per quarter, or 65 cents each, for less frequent trades. Etrade doesn’t charge when you close an equity option priced at 10 cents or less.

The big draw at Etrade is its platform, which includes advanced analysis tools, charting, risk analysis, and other features important to options traders. Etrade supports advanced options strategies such as so-called butterflies, condors, iron butterflies and iron condors, naked puts, and naked calls, though approval is required to access these riskier strategies. With dedicated options trader support, excellent tools, and competitive pricing for active traders, Etrade is a strong choice for options traders.

  • Trade costs: 65 cents per contract with less than 30 trades per month. 50 cents per contract with 30+ trades per month.
  • Account minimum: None
  • Recurring fees: None
What We Like
  • Advanced trading platforms feature important tools for active options traders

  • Low pricing for active traders

  • Dedicated customer support line for options

What We Don't Like
  • Higher pricing for fewer than 30 trades per month

Best for Beginners : Charles Schwab

Charles Schwab

 Charles Schwab

Beginners will likely feel right at home learning how options trading works and building their skills on Charles Schwab’s platform. The brokerage offers extensive resources for learning the ins and outs of options trading. And, as you become more experienced, Schwab’s tools grow with you. You have access to advanced charting tools and trade calculators built into Schwab’s investment platforms.

You can choose to trade online or use the advanced StreetSmart Central trading platform, which has most features that expert options traders would want (think quotes and trades, for example). The pending integration of former competitor TD Ameritrade’s premier thinkorswim platform after its acquisition in October 2020 by Schwab positions this brokerage as a great choice for expert trading. Trades are 65 cents per contract with no base commission.

  • Trade costs: 65 cents per contract
  • Account minimum: None
  • Recurring fees: None
What We Like
  • Low per-contract commission for options trades

  • Basic web platform and StreetSmart active trading platform

  • Pending integration of advanced thinkorswim platform

What We Don't Like
  • Legacy advanced trading platform lags behind some options-focused competitors

  • Strict margin trading rules and relatively high margin rates when you borrow money to invest more

  • Higher price per contract than some competitors’

Best for No Commissions : Webull

Webull logo

Webull 

Webull is a newer investment platform that charges nothing for stock, ETF, and options trades, including options base fees and contract fees. You won’t pay a dime for most options trading activity on Webull.

The only fees you are likely to run into at Webull are for margin trading, short sales, advanced data feeds, and some small fees charged by regulators no matter where you trade. With ordinary options trading activity, you could get by without paying anything at all.

Webull offers web, mobile, and desktop platforms ideal for the most active traders. If you trade at a high volume, the savings you’ll get from Webull could make switching worthwhile. When you open an account for the first time, Webull may offer generous new customer promotions in the form of free stock.

  • Trade costs: $0
  • Account minimum: None
  • Recurring fees: None
What We Like
  • No-commission trading

  • High-tech trading platforms

  • Free-stock bonus for new customers

What We Don't Like
  • A limited list of tradable assets

  • Short history compared with its competitors

Best for Advanced Traders : Interactive Brokers

Interactive Brokers

 Interactive Brokers

Interactive Brokers is a top brokerage for advanced and active options traders. While it offers professional-level accounts, even those of us without millions under management can find our needs well-covered by Interactive Brokers.

Most DIY investors and traders may want to sign up for the IBKR Lite account, which includes free stock and ETF trades and no base fee for options trades. IBKR Lite has fixed pricing for options. If you’re a high-volume trader, you may want to upgrade to IBKR Pro. The Pro tier gives you access to fixed or tiered pricing options and longer trading hours.

Under IBKR Lite, options for U.S. markets have no base fee and cost 65 cents each. Thanks to tiered pricing, costs can go down to 15 cents per contract with high volumes. All orders have a $1 minimum, but that $1 is a drop in the bucket for larger traders looking to take advantage of the unique tiered pricing structure. However, IBKR Pro account holders must keep a $100,000 balance or generate $10 in commissions per month to avoid a $10 monthly inactivity fee.

  • Trade costs: 65 cents per contract, or less with tiered pricing
  • Account minimum: None
  • Recurring fees: None for IBKR Lite, up to $10 per month for IBKR Pro
What we like
  • Dedicated options trading platform with professional-level features

  • Choose between two pricing structures, based on your trading habits

  • Support for trading software application programming interfaces (APIs)

What we don't like
  • Advanced platforms may be overwhelming for beginners

  • Complex pricing structure

Compare Providers

Category Winner Per-Trade Base Commission Per-Contract Commission
Best Overall Tastyworks $0 $1 per contract to open (no closing commission)
Runner-Up, Best Overall Etrade $0 65 cents, or 50 cents with 30+ quarterly trades
Best for Beginners Charles Schwab $0 65 cents
Best for No Commissions Webull $0 $0
Best for Advanced Traders Interactive Brokers $0 65 cents (IBKR Lite Fixed Pricing)

Frequently Asked Questions

What Is Options Trading?

Options trading is a form of active investing in which traders make a bet on the future value of specific assets, including stocks, funds, and currencies. Instead of buying and holding the underlying asset directly, you hold a contract that gives you the right, but not the obligation, to buy or sell that asset at a specific price on a specific future date and time.

If your bet is right and the asset moves up or down beyond the value specified in your option contract, your option is “in the money” and you can exercise it for a profit. If your bet is wrong, your option becomes worthless.

Options trading can be very complex. It may use multiple conditions, and market prices change almost constantly during the trading day, or even 24 hours a day in some markets. This makes options trading very risky compared with long-term investments in mutual funds, ETFs, or even many stocks. We recommend getting involved with options trading only if you understand what you’re doing and can tolerate the risks involved.

Pros
  • Profit from market fluctuations and volatility

  • Hedges other investments with low-cost options contracts that act as insurance

  • Limited trading risk with small contracts compared with some stock and ETF investments

Cons
  • Options market volatility increases exposure to risk

  • Trades can be complex and intimidating to new traders

  • Risky day-trading options strategies often lose money

How Much Money Do I Need To Invest?

Thanks to brokers offering accounts with no minimums and no commissions, you could start trading options with just a few dollars. There is no minimum required to trade options at many brokerages, but you may have to complete an additional application to do this. You’ll need enough cash in your account to cover your trade positions and any fees arising from your chosen trading strategy.

Margin trading lets you borrow money to invest more, but there are fees and additional risks involved. If you are brand new to options, consider starting with only a paper trading account. These work like a stock market game and allow you to test strategies with fake money before putting your real dollars at risk.

How Should I Choose an Options Trading Platform?

There are many options trading platforms to choose from. Each has its own pricing, asset availability, and features that could make one a better choice than another, depending on your own goals and needs.

When picking the best options trading platform for yourself, look at these key areas:

  • Pricing: Options trades can be free, $1 each, or a lot more. Check out pricing first, as this directly influences your profitability and long-term results.
  • Technology: Abilities to enter advanced and conditional orders with multiple conditions, or legs, may be vital to your trading strategy. Make sure you can enter the orders you’d like with an interface that works well with your style, preferences, and goals.
  • Features: Some platforms incorporate exceptional tools like live TV, the ability to follow trades entered by others, profitability calculators, and more.

How We Chose the Best Options Trading Platforms

To find the best options trading platforms, we reviewed more than 15 brokerage and options trading platforms. Competitive pricing and high-tech experiences good for a variety of trader needs and styles were top on our list of the factors that we considered. We also considered investment availability, platform quality, unique features, and customer service.

Article Sources

  1. Tastyworks. "Pricing." Accessed Jan. 5, 2021.

  2. ETrade. "Pricing and Rates." Accessed Jan. 5, 2021.

  3. Charles Schwab. "$0 Commissions on Online Trades." Accessed Jan. 5, 2021.

  4. Webull. "Webull Financial Fee Schedule." Accessed Jan. 5, 2021.

  5. Interactive Brokers. "Which Plan is Best for You?" Accessed Jan. 5, 2021.

  6. Interactive Brokers. "Commissions - Options - Fixed Pricing Structure." Accessed Jan. 5, 2021.