Best Options Trading Platforms

Tastyworks is the best trading platform focused on options

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Options trading platforms are brokerage accounts that support options trading and come with a variety of tools and resources for investors. Options trading is a high-risk type of investing 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. 

The best options trading platforms have affordable pricing, advanced technological capabilities, and unique features like probability calculators. Each platform is unique and has its own strengths and weaknesses, so it’s best to understand what you want before you sign up with a broker.

Best Options Trading Platforms of 2021

Best Overall : Tastyworks


Tastyworks logo

 Tastyworks logo

  • Trade costs: $1 per contract to open, no commission to close (stocks and ETFs)
  • Account minimum: None
  • Recurring fees: None
Why We Chose It

Tastyworks features a strong emphasis on options trading, along with helpful video content for investors to take advantage of.

Pros & Cons
Pros
  • Strong focus on options trading

  • Educational video content

  • No closing commission

Cons
  • Higher per-contract fees

  • Fewer investment options

  • Can be confusing for beginners

Overview

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.

Runner-Up, Best Overall : ETrade


ETrade logo

 ETrade logo

  • 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
Why We Chose It

ETrade is one of the most established online brokerage firms, with affordable pricing for active traders and a variety of helpful trading tools. 

Pros & Cons
Pros
  • Advanced trading platforms feature important tools for active options traders

  • Low pricing for active traders

  • Dedicated customer support line for options

Cons
  • Higher pricing for fewer than 30 trades per month

Overview

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.

Best for Beginners : Charles Schwab


Charles Schwab

 Charles Schwab

  • Trade costs: 65 cents per contract
  • Account minimum: None
  • Recurring fees: None
Why We Chose It

With no minimum account requirements and no recurring fees, Charles Shwab’s low costs and user-friendly platform makes it a great choice for beginners.

Pros & Cons
Pros
  • Low per-contract commission for options trades

  • Basic web platform and StreetSmart active trading platform

  • Pending integration of advanced thinkorswim platform

Cons
  • 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’

Overview

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.

Best for No Commissions : Webull


Webull logo

Webull 

  • Trade costs: $0
  • Account minimum: None
  • Recurring fees: None
Why We Chose It

Webull features no-commission trading along with a sophisticated trading platform and stock bonuses for new customers.

Pros & Cons
Pros
  • No-commission trading

  • High-tech trading platforms

  • Free-stock bonus for new customers

Cons
  • A limited list of tradable assets

  • Short history compared with its competitors

Overview

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.

Best for Advanced Traders : Interactive Brokers


Interactive Brokers

 Interactive Brokers

  • 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
Why We Chose It

Advanced traders will benefit from Interactive Broker’s exclusive emphasis on options trading and professional-level platform features.

Pros & Cons
Pros
  • 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)

Cons
  • Advanced platforms may be overwhelming for beginners

  • Complex pricing structure

Overview

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.

Final Verdict

There are lots of options when it comes to options trading platforms. Some platforms focus specifically on options trading, like Tastyworks, while established investing platforms like Charles Schwab provide beginners with a way to break into options investing. Overall, the best options trading platform for a wide range of investors is Tastyworks.

Unlike other investing platforms, Tastyworks has a strong emphasis on options trading. It features tools to quickly analyze and enter trades, along with unique tools to help experienced investors be more efficient in trading. For investors looking for additional advice from experienced traders, Tastyworks also features helpful video content.

Compare The Best Options Trading Platforms

Company Trade Costs Account Minimum Recurring Fees Platforms
Tastyworks
Best Overall
$1 per contract to open, no commission to close (stocks and ETFs) None None Web, mobile, desktop
Etrade
Runner-Up, Best Overall
65 cents per contract with less than 30 trades per month, 50 cents per contract with 30+ trades per month None None Web, mobile, desktop
Charles Schwab
Best for Beginners
65 cents per contract None None Web, mobile, desktop
Webull
Best for No Commissions
$0 None None Web, mobile, desktop
Interactive Brokers
Best for Advanced Traders
65 cents per contract, or less with tiered pricing None None for IBKR Lite, up to $10 per month for IBKR Pro Web, mobile, desktop

Guide to Choosing the Best Options Trading Platform

Should You Start Options Trading? 

Whether or not options trading is right for you depends on your investing goals. Some benefits of options trading include:

  • Smaller financial commitment
  • Lots of flexibility
  • The opportunity to make larger profits relative to initial investment

However, options trading isn’t the best option for many investors. Some of the downsides of options trading include:

  • Requires more advanced market knowledge
  • Traders are exposed to unlimited losses
  • Options involve limited time constraints

Comparing Options Trading Platforms

The best options trading platforms feature low costs, helpful trading tools, and plenty of community and educational resources. Here are some things to keep in mind when comparing options trading platforms:

  • Cost: Look for trading platforms with low trade costs and recurring fees. Platforms including Tastyworks, Etrade, Charles Schwab, and Webull charge no recurring fees. Typical commission fees range from $0 to $0.65 per contract.
  • Account minimums: Some trading platforms require traders to have a certain minimum amount in their accounts. Depending on how much you plan to invest, you should look for an options trading platform with an account minimum that works for your budget.
  • Ease of use: The best options trading platforms come with simple, intuitive online interfaces that make it easy to conduct trades. Look for platforms with a modern, easy-to-read style and options for web, desktop, and mobile.
  • Trading tools: Look for a platform that comes with tools to analyze and enter trades. These can include tools to quickly analyze and enter trades, conduct probability analysis, and measure risk and reward, all of which can help you to make smart investing decisions when trading options.
  • Educational resources: Whether you’re a beginner or an experienced trader, educational tools and resources can help you learn more about options investing and make smarter trading decisions.

Choosing a Platform to Begin Options Trading 

Once you choose an options trading platform, the next step is to set up an account. This typically requires you to provide information including your full name, address, and Social Security number. You may also be asked to link a bank account in order to fund your new brokerage account.

Once you’ve signed up, you can transfer money to the account and begin investing. It’s a good idea to take advantage of all the tools and resources your chosen trading platform has to offer in order to look for opportunities in the market. For example, many options trading platforms come with news feeds to help you stay up to date with the latest market developments. Some also feature community forums and helpful video content.

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.

Methodology

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.