Cheap options trading platform

The Best Cheap Online Stock Brokers. Latest Update October 13, 2017. The best cheap online stock broker offers a variety of investment options at a low cost. We compared fees, account minimums, and other costs of the cheapest brokerage accounts to find which best suits different investing priorities. While most online brokers have dialed down their costs, we found three that we like more than the competition. For anyone just starting to wade into investing, Ally requires no minimum investment to start an account, and it offers some of the lowest trading fees. Its online-only platform transfers between devices with ease, making it easy and inexpensive for investors to set up an account. The only brokerage of our three top picks that operates brick-and-mortar branches, this financial institution has kept offers plenty of useful tools and platforms while also offering traditional resources for in-person help. This low-cost, high-account value trading platform offers surprisingly low fees if you meet its requirements for account balance and activity. But novice investors won't find the same benefits, or the same simplicity offered by our other picks. The Best Cheap Online Stock Brokers. Best for New Investors. Best for Active Investors. Whether you’re new to the stock market or a seasoned investor, choosing a brokerage with low overhead is a smart financial decision: Spending less money on fees means your investments have more room to grow. And while cheap trading platforms may not offer the same level of counsel or market research as a traditional firm, you can still find plenty of tools to make trading decisions smarter and faster.

If you’re a relative newcomer to the stock market, you should look for an account with low costs, plenty of educational resources, and, importantly, a low account minimum. Your best bets are Ally Invest and Charles Schwab. These two brokerages share a lot of price points, and most of the differences between the two are trade-offs. Example: Ally provides access to nearly twice as many mutual funds (around 10,000 vs. 5,000) and charges a much lower mutual fund commission (around $9 vs. Schwab’s $75). Meanwhile, no brokerage can compare with Charles Schwab for exchange-traded funds (ETFs): Over 200 trade commission-free. Conversely, Ally doesn’t offer any zero-commission ETFs. With those differences in mind, we prefer Ally Invest for new investors due to its $0 minimum to start a brokerage account and because it offers virtual trading. With virtual trading, you can test out strategies before putting your own cash into the mix. Charles Schwab doesn’t offer any equivalent, and has a $1,000 account minimum. Ally also gives you the option to try your hand with individual trades or open a managed portfolio with a little more expert guidance, although managed portfolios require a $2,500 minimum. Charles Schwab has retained more of a classic brokerage feel through its in-person presence (you can schedule a free consultation with a financial advisor) as well as its more traditional account minimums. And while Ally restricts its trading technology to online platforms, Charles Schwab gives clients an advanced desktop option: StreetSmart Edge. StreetSmart’s claim to fame: Making its platform more intuitive and convenient, based on user feedback about clunkier trading tech. For more active trading, a higher account balance is par for the course. With Interactive Brokers, you’ll need $10,000 to start an account, but once you do, its other financial demands are incredibly small.

Take advantage of the super low price per trade ($1) as well as extremely low margin rates (their highest interest bracket still charges less than 3%). It also offers the choice of fixed or tiered pricing, giving investors the opportunity to choose what makes more financial sense for them — tiered structures will typically benefit high-volume traders. How We Found The Best Cheap Online Stock Brokers. Your financial goals and your personal investing style will be the two biggest factors in choosing the right brokerage for you. We set out to find the strengths and weaknesses of the cheapest brokerages we could find, but you’ll still have to decide which offers the right combination of savings and services for your needs. We considered seven brokerages in total: Ally Invest, E*trade, Fidelity, Interactive Brokers, Charles Schwab, Merrill Edge, and T. D. Ameritrade, all major brokerages that have made a name for themselves offering exceptionally low rates. This wasn't a comprehensive list — we focused on major names and newer players that were doing more to disrupt the space. To find the best among them, we investigated their platforms and compared the fine print to see how they stack up in fees, learning resources, and trading technology. We primarily based our selection on the fees and strictures associated with each company’s brokerage account. Some of the most important: account minimum, account minimum fee, broker-assisted trade commission, monthly activity fee, price per trade, and price per share. Though the numerical difference between two brokerages’ fees can appear small — an extra $2 per trade or a 2% bump in margin rates — those dollars and percentages are still eating away at your investment.

We looked for brokers that kept those fees and commissions as low as possible. Special offers for opening a brokerage account can include a set number of free trades or even cash bonuses for investing above a certain amount. Read the fine print to be sure that these early benefits outweigh later costs, and whether those new client perks align with your investing practices. In other words, don’t be enticed into choosing a broker offering deals on investment products you don’t understand or aren’t ready to use. Since special offers are by definition short-term, we focused on set account pricing. In the long run, those are the savings that will impact your financial goals. For the novice investor who wants to start small and spend small, we sought out accounts that have a low minimum balance (the amount you’re required to keep in your account at all times), no minimum activity rules, and as many $0 fees as possible. We also wanted low-cost options for both self-directed trading and investing in a managed portfolio, allowing you to make your first foray into the market as hands-on or hands-off as you like. But we didn't want to neglect experienced investors, either. For investors who've had time to let investments grow, a low minimum balance probably isn’t a top concern. But putting more money in shouldn’t make your fees swell proportionately. We looked for brokerages that kept fees low for larger accounts — or, better yet, offered more discounts for frequent activity.

We were also keen to see a full set of asset options, including advanced investment vehicles like forex and futures. For any type of investor, a superior investment platform provides an array of research and learning resources, flexible trading options, and a usable interface compatible with most devices. We found a lot of similarities among the different brokerages: Roughly half had the same $4.95 per-trade fee, with most of the rest charging $6.95. All our top picks charge $4.95 per trade, except for Interactive Brokers' $1 fee. Three of our seven finalists had no account minimum, and Charles Schwab will waive its $1,000 minimum with a monthly direct deposit of $100. Ameritrade and Merrill Edge lost out to Ally for having higher per-trade fees, despite having no account minimums. Both Charles Schwab and Fidelity charge $4.95 per trade and have physical locations and learning centers for investors. But we gave Schwab the edge for its lower account minimum ($0-$1,000 vs. $2,500) and the reviews of its desktop platform. E*Trade lost points for a high account minimum ($5,000) and high per-trade fees ($6.95), offering the worst of both worlds. For investors who have that much to deposit into an account, we much preferred Interactive Brokers' $1 per trade fee. Even with Interactive Brokers' $0.005 per share fee, a trader would have to buy or sell more than 1,000 shares at a time to exceed E*Trade's fees. Here's how our top picks stacked up in some of these key areas: *Waived with monthly direct deposit of $100.

Our Picks for the Best Cheap Online Stock Brokers. Best for New Investors. Ally Invest A clean and accessible online brokerage that provides investing newbies with a simple platform and no investment minimums. Because Ally Invest doesn’t maintain brick-and-mortar branches or run advertising campaigns, it is relatively unknown outside of the trading world. Despite its insider status, Ally does better than most online brokerages at making investing accessible to newcomers. The real welcome mat in front of Ally’s door: some of the cheapest rates in the industry. With a $0 minimum for independent brokerage accounts, just about anyone can get started investing with Ally. But just because it makes investing approachable for beginners doesn’t mean it isn’t an expansive company there are plenty of tools and opportunities to expand your investment horizons. Ally offers all the same major investment vehicles as other brokerages — stocks, options, ETFs, bonds, mutual funds, forex, futures — as well as a host of accounts that fall under a managed portfolio. These portfolios are comprised exclusively of ETFs — investment bundles that trade on the open market like stocks. They offer similar diversification to mutual funds, but typically carry lower expenses. A small percentage of your total investment is typically held in cash, but the exact amount will vary according to your described risk tolerance. In addition to small fees for holding the ETFs themselves, Ally charges a 0.3% advisory fee. That's a pretty middle-of-the-road percentage in comparison with other full-service brokerages but slightly higher than companies that offer only managed portfolios.

We discuss these robo-advisor companies at the end of the review. In the first half of 2017, TradeKing made the move to Ally Financial, officially becoming Ally Invest. The transformation of TradeKing accounts wasn’t totally seamless, but today they’re functioning normally. What’s more, the merger created a stronger trading platform that improved the functionality of the two original systems, beefing up the tools and technology. Ally boasts an aesthetically pleasing and easily navigable site, but buries all the hard data that we were craving. From the easy-to-reach pages, scout out fine print hyperlinks promising “More Details” to find consolidated information about fees, investment vehicles, and account types. This sparsity of upfront information carries over into their light touch on education and research. While having more in-house resources would improve the overall client experience, plenty of information can be found elsewhere on the internet. A couple good resources? Investopedia and The Simple Dollar. Charles Schwab This old guard brokerage has kept on the breaking wave of trading technology, while providing plenty of support and advising resources. Just about every basic fee charged by Charles Schwab goes toe-to-toe with Ally. The price between the two does jump in certain instances — broker-assisted trades go up by $5 and mutual fund commissions go up nearly $70 — and while Ally lets investors start a brokerage account with any amount, Charles Schwab requires $1,000 to start.

However, the breadth of tools and resources available with Charles Schwab does a lot to justify the extra expense. Schwab puts extensive information on their accounts and products front and center. Plus, easily access both product info and wider investment education through the learning center. And while Ally Invest makes it difficult to track down brass tacks in the name of a friendly user-interface, Schwab hits you with its full store of counsel and breaking news. Not only does the firm provide access to independent research, it also publishes relevant in-house research. Research and ratings both live inside Charles Schwab’s desktop trading platform, StreetSmart Edge, the upgrade of Schwab’s flagship platform StreetSmart. If you need personalized settings and advanced features, StreetSmart Edge provides both in spades. You’ll just have to learn how to use it. For streamlined trading and market insights on the go, there’s also a web-based platform, Trade Source. Investors that are new to the game may find the web-based option more accessible. Like Ally, Charles Schwab offers a managed portfolio option, Intelligent Portfolio, available for a large number of managed account types. Unlike Ally, not to mention every other managed account we looked at, it charges no advising fees.

Instead, Schwab makes money by holding some of the underlying assets of the accounts. The only fees associated with the account come from the investments, and while that percentage increases to a substantial amount (from 0.07% to 0.21% as risk builds), it is still lower than most. The $5,000 account minimum for Intelligent Portfolio accounts is, however, higher than Ally’s. Still, if the security of investing with a solid name in finances appeals to you, Charles Schwab offers a lot for your money. And Charles Schwab is finding even more ways to make you feel secure investing your money with them. Automated financial advisors are the wave of the future, but many people don’t feel comfortable putting their life’s savings in the digital hands of a computer. Charles Schwab has developed a half-and-half solution: A hybrid service, Intelligent Advisory puts both financial professionals and financial algorithms to work. A nice little solution, so long as you have $25,000 to plunk down. Charles Schwab offers a deluxe set of services, but depending on the account you choose, you don’t have to invest a correspondingly huge amount. Opting for an independent brokerage account gives you access to the resources of a traditional, full-service brokerage without putting down a traditional amount. Best for Active Investors.

Interactive Brokers A top choice for experienced traders, this brokerage boasts a complete lineup of investment products, plus pro-grade trading tech. Choosing a company with a variety of investment products is important if you plan on trading more than just stocks. All three of our favorite companies offer stocks, bonds, mutual funds, ETFs, and options trading. But if you’re particularly interested in more advanced investing, like options, Interactive Brokers is the way to go. The company also has incredibly low interest rates for margin trading: With an upper limit of 2.66%, IB’s rates are about a third of what’s charged by every other brokerage we looked at. For pure trading and competitive prices, no other brokerage comes close. Interactive Broker’s account structure rewards the active investor. In fact, the two elements that make IB a bit unwieldy for new investors make it a perfect tool for the experienced: Once you meet the hefty minimum account balance — $10,000 — the rest of IB’s demands on your wallet are light. And the relatively high $10 monthly activity fee is charged only if your trades don’t rack up at least $10 in commissions. With the tiny $1 per-trade fee, that means you’ll need to make ten trades every month or pay the difference, e. g. six trades will leave you with a $4 activity fee. If you are savvy investor who also happens to be under 25, you can open an Interactive Broker account with a reduced minimum balance — the required deposit is just $3,000 — and the monthly fee bumps down to $3. For an IRA, the minimum deposit is $5,000. However, we didn’t love everything we saw about Interactive Brokers.

Back in 2012-2013, the company was fined for several violations relating to the management of futures market funds. The result was a pair of fines totaling $925,000. Because the fines occurred several years ago, and because futures trading is a fairly niche investment area compared to stocks and funds, we don’t think this is enough to overrule Interactive Brokers’ overall cheap costs. However, if you’re planning on doing a substantial amount of futures trading, be aware of this mark on their record. Interactive Broker’s incredibly rich platform offers trading technology advanced enough for professional day traders. Choose from the web-based trading platform WebTrader and the more advanced, downloadable platform, Trader Workstation. Both are included for Interactive Brokers clients at no additional cost. Serious traders will gravitate to the Trader Workstation’s more in-depth features. Trader Workstation also comes with a steep learning curve. Navigation is far from intuitive as tools are located in discrete sections. However, it is also customizable, allowing you to group together the resources you make frequent use of and hide the ones you don’t. The interface, like the rest of an IB account, only benefits experienced traders. However, IB has recognized the learning gap. To supplement the educational tools on Traders' University, IB has introduced a layout library (choose from pre-made setups and templates for different trading strategies) as well as an AI assistant.

IBot can answer plain-English questions but, like any other voice-activated helper from Siri to Alexa, it has its limits. The landscape of online investing is changing. Financial institutions have gone through a lot of millennial growing pains. The culminating act: Several companies cannibalizing several others in the past year. For everyday investors, these acquisitions have little impact. For instance, T. D. Ameritrade gobbled up Scottrade, but Scottrade accounts are slated to transform painlessly into Ameritrade accounts in Q1 of 2018, to the extent that Scottrade is still enrolling new clients. The more major change is the movement away from traditional brokerages and toward increasingly automated investing options. Enter robo-advisors. There’s an app for that. The inexpensive trading platforms established by the likes of Scottrade and E*trade make it easy to invest by reducing or eliminating fees that make traditional brokerage firms elite. They also appeal to a younger generation of investors. They are not, however, the newest rich kid on the block.

A slew of robo-advisor investment apps have materialized within the last five years, with marketing and functionality geared toward a generation that has a job (yay!) and some money (yay!) but doesn’t know how to “adult.” A notable example, Wealthsimple, has a slogan that says it all: “Investing on autopilot.” Hands-off investing as offered by Wealthsimple (or other robo-advisors like Wealthfront and Betterment) appeal to a demographic used to automated services. Simply plug in your time frame and risk tolerance and an algorithm takes it from there. A nice side effect of AI investing - even lower fees. Wealthsimple and Betterment both allow you to open an account with $0 down Wealthfront asks for $500. Wealthsimple charges an annual 0.5% advising fee Wealthfront and Betterment charge just 0.25%. The Best Cheap Online Stock Brokers, Summed Up. We find the best of everything. How? We start with the world. We narrow down our list with expert insight and cut anything that doesn't meet our standards.

We hand-test the finalists. Then, we name our top picks. Best Options Brokers for 2017. Like many people, I was intimidated by options when I first started investing almost 10 years ago. They seemed complicated, because they are. It soon became obvious, however, that locking in the ability to buy or sell securities at a set price would be a powerful way to tap into good investment ideas I might not otherwise be able to afford. Through the years, I’ve discovered that all of the best options brokers share a few things in common: low fees, no account minimums, and a user-friendly interface. In this article, I’m going to walk you through the three best options brokers out there, and how they’ll be able to help you with your own investment method. If you’re just getting started in options, TD Ameritrade offers the most educational resources to help you make smart decisions early on. If you already have a firm handle on your investment method and want to maximize your profits, there’s no cheaper online options broker than OptionsHouse. If you’re an active trader that’s looking to stay on top of daily trading volume trends or hourly changes in a stock’s chart, OptionsXpress is going to give you the most effective tools to do it. Each of these brokers caters to a different type of investor, but they all share a focus on low fees, no account minimums, and a user-friendly interface. The Simple Dollar’s Top Picks for the Best Options Brokers. Best for Beginners: TD Ameritrade Lowest Fees for Experienced Traders: Optionshouse Best Tools for Active Traders: OptionsXpress.

What to Look for in an Options Broker. I have managed my own investments for a decade and use Merrill Edge as my primary trading platform because it’s linked up with all my other accounts. However, as a traditional broker, it’s pretty darn clunky when it comes to researching options. In all honesty, the only reason I stick with Merrill is because I have multiple accounts and enough money invested with them that they grant me some pretty nice perks to keep my business. For those just starting off with options, those with a small account, or those who are very active and need a responsive interface of high quality, an old-school broker like Merrill that has simply bolted on an options trading platform probably isn’t going to be ideal for you. The good news is that there are a host of brokers out there that cater almost exclusively to options traders. The best have the following things in common: An options-specific platform: If you want to be serious about options, you’re going to want a broker that is too. A traditional broker focused mainly on stocks or ETFs can typically be clunky when it comes to researching options, or use a fee structure that doesn’t make active options trading cost effective. The good news is that there are a host of brokers out there that cater almost exclusively to options traders. And that’s because they were built primarily as a platform for options first and foremost – even if some were eventually bought by a larger company, or added tools for other kinds of traders down the road. Low fees: Minimizing risk also goes hand-in-hand with minimizing cost.

It’s important to acknowledge that even a modest amount of fees will quite literally take the place of other profitable trades you could be making. Whether you’re trading options in the hopes of big profits or just using them for a defensive method, cost matters a great deal. Low account minimums: Many traders of modest means use options as a cheaper alternative to going long with a high-priced stock. If you have to have a minimum of $100,000 in your account or trade 50 times a month to get cost-effective access to those options, what’s the point? Most options traders can easily get by with a limit of $1,000 or so, but a lack of minimums at all is more preferable. Intuitive interface : The given price on an options contract can fluctuate significantly across the trading day. If you have to fumble around with poorly formatted options chains, it can cost you. Education : Speaking of multi-leg options trades, when is it right to do a bull call spread? And what the heck is an “iron condor?” A good broker will provide resources to teach you more about the sophisticated option trading strategies you may not be familiar with out of the gate. Flexibility: If, like me, your favorite option is a covered call, that means you need to research and purchase plain old stocks and ETFs, too.

And you’re not going to want to use another broker to do it. Nobody likes the hassle and cost of having multiple platforms to do multiple things. The Best Options Brokers. Cost Structure. Options: $9.99 flat rate, plus 75 cents per contract. Stocks and ETFs: $9.99 flat rate, though select ETFs are commission-free. Futures: $2.25 per contract Minimum Balance: $0. If you’re looking to explore options without sacrificing some of the investment options you’re used to, like low-cost ETFs, then TD Ameritrade strikes the perfect balance between worlds – and offers plenty of tips and tricks to help you learn how to trade options effectively, including webinars and an archive of educational videos to explain specific strategies. There’s no element of financial planning you can’t find through TD Ameritrade, which makes it a great one-stop shop, as well as a great entry into options for those more familiar with traditional stocks and bonds. TD Ameritrade may be a discount brokerage, but it is still one of the largest trading platforms in the world with almost $740 billion assets and almost 7 million client accounts. It has won new business in recent years mostly by catering to rookie traders, winning accolades for its accessibility, including five consecutive awards as the best platform for novices as ranked by respected investing magazine Barron’s . TD Ameritrade also recently acquired Scottrade with the deal expected to close by fall of 2017. With Scottrade’s numerous customer service awards and brick-and-mortar stores, TD Ameritrade just amped up its market share of investors of all kinds.

Easy-to-Execute Options Trades. When I first started dabbling in options, simply learning the lingo was hard enough. What the heck is a bull call spread? How can I be sure I’m making a covered call on my existing stocks and not accidentally selling shares I want to keep? Thankfully, TD Ameritrade cuts out the guesswork with easy-to-understand options trading tabs. Simply click on the “spread” tab if you want a spread, or click on the “single order” tab if you just want one leg. There’s also clickable links at the ready explaining the strategies on the order page, so you won’t have to find the answers to any last-minute questions elsewhere before placing your trade. Full-Service Platform. You can make stock trades for $9.99 on the platform, and trade from over 100 commission-free ETFs. There’s also the capability to trade futures and even forex if you really want to get sophisticated, or an avenue to buy annuities if you’re thinking about income in retirement. The fees are admittedly sometimes higher than some other providers – about 10% higher than the typical discount broker, and more than 50% higher than the best discount broker you’ll read about next. But those fees fund customer service resources that are available 247, so you’re getting something for that extra money. TD Ameritrade also has over 100 branches across 33 states for in-person consultation if you need it. Educational Resources.

As stated, the robust customer service and physical branches are great resources for newbies to options trading. But there’s also plenty of online resources for the self-starter, including both options screeners to help you identify new ideas, as well as hours of webinars and on-demand video to teach you about options strategies. Most importantly, you’ll also be able to learn how to execute those strategies within the TD Ameritrade platform. Reading a blog post is one thing, but seeing someone click through a trade is by far the best way to learn the ropes. Lowest Fees for Experienced Traders. If you’re looking for the most economical options-specific trading platform, OptionsHouse is the way to go. Whether you’re trading options or stocks or futures, it’s hard to beat its pricing – especially when coupled with its no minimum balance requirements. In summer 2016, OptionsHouse was acquired by megabroker E*Trade Financial. That should tell you two things – first, that E*Trade clearly understood it had to get with the times on options, and secondly that OptionsHouse was one of the most attractive platforms out there at the time. E*Trade could eventually integrate more with OptionsHouse to bolster its existing tools and research, and I’m interested to see how things progress in this partnership. But regardless of better tools down the road, one important thing to know about the present is that there will be no change to the existing low-cost structure that has made OptionsHouse so popular. That means you can depend on the low-cost platform that has made OptionsHouse such a hit with experienced traders who might not need the additional educational resources provided by other higher-cost brokerages, like TD Ameritrade.

A single-leg options contract is $5.45 all-in. That is the lowest rate I could find anywhere right now. But the low prices also extend to futures and stock trades as well, allowing you to manage your entire portfolio in a very cost-effective way. There’s also no minimum balance, making it really easy for even small-time traders to get started. If you’re trading hundreds or thousands of options contracts each month, there may be a few premium services that charge lower commissions thanks to a volume discount, but for the majority of options traders, this will be the absolute cheapest option available. A custom trading interface provides real-time market data and speedy execution to make sure you are making the most of what the market gives you. The design is clean, and there’s tons of information at your fingertips without cluttering up your screen. The platform is very intuitive, but if you do have a question, you’ll quickly find answers in the robust tutorials for new users. The interface also has been seamlessly ported for mobile devices, with iconic investment magazine Barron’s giving OptionsHouse a perfect 5.0 score on its mobile experience in its 2016 broker rankings. User-Friendly Risk Management. The OptionsHouse tradeLAB tool offers one of the most user-friendly tools I’ve seen to dissect options spreads. There is a green smiley face besides the statistical probability of making a profit, and a red frowny face showing your probability of a loss – so no need to decipher any weird calculations here. You’ll also get other important information at a glance, any upcoming earnings reports or dividend distribution dates, in addition to expiration. Figuring out the potential performance of your options over time can be tricky, and OptionsHouse takes a lot of headaches out of the process with tradeLAB.

Best for Active Traders. Options: $12.95 flat rate, $1.25 per contract in lots of 10 or more Stocks and ETFs: $8.95, though select Schwab ETFs are commission-free Futures: $3.50 per contract Minimum Balance: $0. I mentioned the potential of better tools at OptionsHouse down the road because five years ago we saw a case study in how a big broker can really turn up the juice on a smaller options platform. And the result is the current OptionsXpress platform, which is unrivaled in its tools and research. If you’re an active trader, tools are like food and water to you. While casual or beginner traders looking months down the road may not need to stay on top of daily trading volume trends or hourly changes in a stock’s chart, active options traders can’t live without that info – and OptionsXpress knows this. OptionsXpress was purchased by Charles Schwab in 2011 as a way to improve the legacy broker’s offerings for traders. Since then, the marriage has resulted in the best of both worlds – the slick, professional feel of a big-time firm, along with the agility of an options-native platform. The icing on the cake for OptionsXpress is the ability to trade stocks, ETFs, and even futures alongside options, giving active traders a one-stop shop to make the most of their investing ideas. From its attractive charting interface and its Idea Hub that helps you browse market trends, to its exclusive automatic execution tool, Walk Limit, which helps you place orders at the best price, Options Xpress has the best toys in the space. Everything down to the trade tickets are easy to understand at a glance.

To help you keep growing as a trader, there are also weekly webinars, an archive of on-demand educational videos, and regular email updates via its daily Options Xpresso email blasts to keep you focused on market risks and opportunities. There’s even an interface to help you practice trading without investing any real money, as a way to test your options trades in real time without any financial risk. I could go on, but you get the idea – there are plenty of tools for investors of every method and style, whether you’re playing a long-term trade or moving quickly in and out of positions. Free Broker Assistance. Any time you need help, licensed options brokers are available to help you at no-additional cost. That can provide much-needed peace of mind for rookies, or help unwind a complex method for seasoned traders who may find themselves in a bind. You can even get advice on futures and ETFs if you want. Between this access and the tools, there’s literally no method you can’t handle with OptionsXpress. Active Trader Discounts. Standard options rates are admittedly a bit pricey using OptionsXpress, but active investors who book at least 35 trades per quarter will qualify for a volume discount of as little as $1.25 per contract when booked in groups of 10 or more. There’s also a discount for contracts trading for less than 5 cents, with so-called “penny options” costing a $4.95 flat rate, or 50 cents in lots of 10 or more. That makes it much more cost-effective to bid on way out-of-the-money options. You won’t be able to top OptionsHouse on pricing, of course, but you will certainly save over most of the competitors out there if you trade in lots of 10 or more.

A Word On Options Expiration and Alerts. Options can be very profitable if done right, but I’d like to use this space for a public service announcement: Options are contracts that must be acted on, or they expire worthless. That means making sure you have a good grasp of your specific option expirations, and that may mean finding out how to set reminders or alerts via your broker. It is not uncommon for less vigilant or inexperienced options investors to just throw up their hands and eat a bad trade. But, remember: sometimes it’s financially advantageous to close an option position early, or to close an option at a smaller loss than allowing it to execute. Let’s say you spent $100 to for an options contract that gives you the right to buy 1000 shares of XYZ Corp. at $10 a share, and the contract expires in two months. Your hope is that shares will rise to $12 so you can buy 1000 shares at $10 per your option contract and then immediately sell them at $12 for a $2,000 gain. Unfortunately, some bad news in a week or two pushes XYZ down to $8 a share – meaning you’re deeply “out of the money” and buying at $10 would result in a $2,000 loss instead. Again, the great thing about options is that you don’t have to buy those shares at $10 if you don’t want to, and can just let the contract expire.

You’re out $100, but that’s better than a $2,000 loss. However, you could also sell that options contract to someone else instead of waiting until expiration. They probably will give you a fraction of what you paid since the options are pretty unattractive, maybe only $5 or $10. But hey, it’s better than zero. Your personal method and specific trades are up to you, but all options traders run into scenarios like this eventually and many just throw up their hands and give up. Believe me, over time that extra $5 or $10 you salvage from seemingly worthless options will add up particularly if you’re an active trader. To this end, I highly recommend emails, text alerts, or calendar reminders to let you know when your options are set to expire. Whatever your broker, spend some time exploring the tools they provide to help, and find a system that works for you. TD Ameritrade, OptionsHouse, and OptionsXpress are the best options brokers currently available, because they all meet the criteria for cost-effectiveness, quality research tools, and having a smooth user interface. While TD Ameritrade isn’t the cheapest broker to place individual options trades through, it’s reasonably priced and has a $0 minimum balance, robust customer service, and educational resources that are extremely helpful for beginning options traders to get started. If you’re looking for the best platform for active traders, I highly recommend the slick interface of OptionsXpress. If you are more interested in cost-effectiveness over tools, go with OptionsHouse. 5 Best Online Broker Platforms For Options Traders. Options trading can be simple, but can quickly get complicated.

Online brokers provide customers tools to handle the tons of quotes, statistics and underlying-securities tracking they might need to succeed in trading puts and calls. IBD's 2013 Best Online Brokers Survey found the five options trading platforms that clients rated highest. They were OptionsXpress , TD Ameritrade ( AMTD ), Interactive Brokers, Charles Schwab ( SCHW ) and TradeStation . "Options can be used by a wide variety of investors to target a wide variety of objectives," said Jim Bittman, director of program development and a senior instructor for the Options Institute at the Chicago Board Options Exchange. Brokerage firms have developed platforms to help options traders of all levels, from novices who buy a call or put to advanced folks who put on multilegged positions. While some platforms are bare-bones, others have a barrage of features such as streaming data, sophisticated analytics and pricing tools. Investors can choose a platform that's Web-based or downloaded as a separate program. A Web-based trading platform is accessed from your broker's website. These are generally less fancy and less customizable. Downloaded platforms tend to use flashier charts and tools. They also tend to give users the ability to customize screens and layouts. OptionsXpress, owned by Schwab, has offerings for clients ranging from beginners to more sophisticated traders. The broker's Web-based platform is not flashy, but is laid out well. It has easy-to-use order-entry interfaces under secondary navigations for single-option orders as well as spreads and covered calls.

The company also has an all-in-one trade ticket that makes entering orders with multiple options faster and easier. Just select the method you want to put on, and the different legs of the trade will be set up for you. OptionsXpress also has tools to help find trade ideas, as well as volatility charts and price calculators. TD Ameritrade also offers a basic, Web-based platform that has something for every level of investor. Order entries for single options, covered calls, spreads and strangles can easily be accessed under a secondary navigation. For single options orders, you can choose an exchange to handle the order or you can have it done automatically. Whether you're putting on a spread, strangle or straddle, you easily get quotes for those trades as a package rather than viewing them in individual legs. For traders who want more advanced features, TD Ameritrade offers the Trade Architect and Thinkorswim platforms. Trade Architect is a Web-based platform catering to active investors, who can select a method and get profit-and-loss graphs to see how the trade can play out. Thinkorswim, which requires a download, is TD Ameritrade's platform for advanced traders.

Packed with sophisticated features, investors can monitor the market and place trades in one screen. Complex strategies can be easily placed, and investors can switch layout views to see implied volatilities and probabilities. Interactive Brokers has two platforms for customers. One is its Web Trader platform, which has just the basics for viewing option chains and entering orders. The company also offers a much more advanced tool for options traders. Interactive Broker's OptionTrader, which is within its Trader Workstation platform, lets users view options chains, including key statistics such as implied volatilities and greeks -- a term that refers to delta, gamma and other measures of options' sensitivity to various factors. Orders for single options or combination orders can easily be entered. Buttons are conveniently placed to reverse a position or hedge it from price risk. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of NASDAQ, Inc. Best Option Brokers.

Who is the Best Option Broker? Cheapest Options Broker. Best Options Trading Platform. Finding the "cheapest options broker" and finding the "best options broker" are two totally different searches. Every major online discount stock broker that I know now allows you to trade stock options, but don't think for a minute that all option brokers are the same. Based on my 20+ years of trading stocks and call and put options, here are a few of the things you should consider before you fill out your first online option broker application and write a check to fund it. Option Broker Reputation. Believe it or not, brokerage firms DO go out of business and they WILL take your money with them. Recently there have been several brokerages (especially forex brokers such as MF Global) that have suddenly closed and hundreds of millions of dollars in customer accounts are missing. As with anything you hear, if it sounds too good to be true, it probably is. Before you open a stock and option brokerage account, make sure the broker has been in business for a few years and that you have talked to people that really have an account there. If you think you have found the cheapest options broker but you have never heard of them before and you don't know anyone that uses them, then stay away! Once you are comfortable that the brokerage firm that you are considering is a credible, then take a look at their commission structure.

Finding the cheapest option broker is not that easy. Here are a few tricks that the brokers play when you are looking at their stock and options commission structures: Brokers often have several different commission structures depending on the size of your account and the number of trades you will make per month or per quarter. So please make sure you are looking at the commission structure that matches your account size or trading frequency. Brokers commission changes based on the number of contacts you will be trading with each order so consider the size of your trade. Will you be trading 2 contracts, 20 contracts or 200 contracts with each trade? Make sure you are looking at their standard commissions and not just the "introductory" commission rates as there are lots of special broker offers out there and sometimes the offers are only good for the first 30 or 60 days. Finally, what other fees are there? Statement fees? Fees to get your money out? Check writing fees? Make sure you know the whole fee structure! ETRADE's Option Commissions. While these are the full commission rates ETrade quotes on their website, they are negotiable.

The more money you have, the longer you have had the account, and the more trading history you have the more likely you can get a reduction. I called ETrade recently and asked them to match another brokerage firms commissions and they did within 24 hours. These brokerages know that it is very expensive to acquire a customer and it is much easier to maintain a customer. Scottrade Option Commissions. TradeKing Commissions. Ease of Use of the Best Option Brokers Platform. You might think that buying options on one platform is the same as buying options on another platform. Therefore, why should you pay someone $12 to make the trade when someone else will do it for $7? There are many other factors to consider when opening that option brokers account besides just the commission. I am pretty web savvy and I have used many different platforms and trust me -- all options broker platforms are NOT the same. I have been burned so many times because I can't submit an order quickly, or I waste precious seconds trying to find the exact ticker symbol or the number of contracts I own. Option prices often move so quickly that seconds can mean a difference of a dime or more in price.

And since each option contract covers 100 shares each dime costs you $10. And since you often trade 5 or 10 contracts at a time, a few seconds can easily cost you $50 or $100! So trying to save a few dollars in commission can be penny wise and pound foolish! What I see happening with option brokers platforms now is that some are designed for the beginner option trader and some are designed for the experienced option trader. Since you are reading this article, you probably don't have an option brokerage account, so please keep reading and open the best option brokerage account for you. One think I know for sure is that all brokers are not the same. Each brokerage firm has a different platform and so the ease of placing orders is different. And trust me, when you are just getting started it is very frustrating to see an option price that you want and when you place your trade you get filled at 10 or 20 cents away from where you thought you were getting filled. Or sometimes your order doesn't get filled at all. The speed of the order execution is very important since option prices often move quickly. Some brokers now offer a guaranteed order fill time or your trade is commission free. I like it when a firm backs up their promises like this--it usually means they believe in their product!

Current Marketing Promotion. Finally, beyond price and ease of use, the other thing to consider before you open an option brokerage account is their current marketing promotion. How would you like to get your first 20 trades free? Would you like a $500 cash bonus just for opening an account and placing a few trades? Of course you would! Here are the most popular option brokers and their most recent promotional offers: Etrade--$2,000 minimum--Trade free for 60 days and get up to $500 CASH! Scottrade--$500 minimum--$7 trades -- No account fees TD Ameritrade--$2,000 minimum--Trade free for 60 days and get up to $600 CASH Get 100 Commission-Free Trades at OptionsHouse. com Think or Swim--$2,000 minimum--Trade free for 60 days and get up $600 CASH FirstTrade TradeKing. My Review of these option brokers: ETRADE or TradeKing are good starter platforms. The commissions are reasonable and the order executions are excellent.

TradeKing has Zecco's special option trading tools, so it's a great entry level platform for the beginning option trader. ETRADE has a downloadable app for your desktop computer which makes the HTML site look antiquated. Try ETRADE PowerTrader I highly recommend it. Scottrade might have slightly lower commissions than ETRADE, but I find its platform outdated, slow, and just plain unattractive. If saving $2 on a trade is important to you, or if you want your platform available in Chinese, then you might be OK with Scottrade. The commission is lower than ETRADE's and other larger platforms, but that is about all that I see going for it. The TD Ameritrade brokerage platform is simple and easy to use and has excellent research tools. However, I just prefer ETRADE's navigation and reporting more. Maybe it's because I have used ETRADE's platform longer but something just seems off with the TDA platform. The commissions are similar, but ETRADE seems to be ahead of the curve by also offering access to 6 global equities markets in case you want to trade a Canadian, European, or Asian stock. The ThinkorSwim platform is by far the best platform if you want to do the complicated option spreads or other multi-legged trades. HOWEVER, if you are a beginner and are buying a few calls and puts, then ThinkorSwim is NOT for you as you will be totally confused by the order types and all of the information that is presented to you. Here are the top 10 option concepts you should understand before making your first real trade: Options Resources and Links. Options trade on the Chicago Board of Options Exchange and the prices are reported by the Option Pricing Reporting Authority (OPRA): The Best Online Stock Brokers For Cheap Stock Trading (in 2017) Finding the best online stock broker is becoming more and more difficult every day. It seems like a new online broker is launched every month and cheap stock trading has become the way of the stock trading world. But with all of the new players in the game, it's the oldest and most respected online stock brokers that continue to offer the best deals.

Just 10 years ago, trading online was nearly impossible. With a few start-ups in the works, E*Trade and Firstrade offered a raw and expensive way to avoid calling your local broker and making trades on your own. As the years have progressed, trading stocks online has become easier for the consumer AND less expensive, which is a rare combination in business. Nowadays, you can find dozens of online stock brokers, each claiming to be the best at what they do. But just how many of them can offer cheap trading, expert customer service, lightning fast execution and cutting edge technology? Let's take a look. The Best Online Stock Brokers. Use this table below to pinpoint the best online stock brokers: Ally Invest fits right at the top of our list as it seems to do everything very well. Ally Invest has a low per-trade commission of $4.95, which does not change if you utilize a broker over the phone and options trading has the same $4.95 cost, plus a $0.65 fee per contract. If you follow SmartMoney, Barron's and other graders of online stock brokers, you'll find Ally Invest (formerly TradeKing) winning awards almost every time they are handed out. Ally Invest offers 247 customer support. Finally, Ally Invest is a leader in educating customers and you'll find hundreds of resources to help both amateur and professional investors. See our full review of Ally Invest. To open up an Ally Invest account, visit their official website at ally.

cominvest Scottrade currently offers fee-free IRA accounts and has fantastic customer service. In my 5 years of trading with Scottrade, I have never encountered a single delay, problem or inconvenience. Sure $7 per trade ($32 for broker assisted trades) is more expensive than the $4.95 or even $2.95 that other online stock brokers charge. While many other brokers offer similar services for cheap stock trading, I've found one that has been nothing short of fantastic. I'm not about to risk having problems for a dollar here or dollar there. In order to trade with Scottrade, you'll need a minimum balance of $2500. They will reimburse your transfer fees up to $150 and their iPhone or Android app can be used to access your account and make trades. To open up a Scottrade account, visit their official website at Scottrade. com. Fidelity isn't your normal online stock broker. They have a very powerful brand behind them, produce quality, low-cost funds, and over the past several years have received major credibility as a “discount broker”. Currently, Fidelity offers stock and ETF trades for a $4.95 commission. This is down from $7.95. To trade options, you’ll pay $4.95 + $0.65 per contract.

You’re required to make a minimum deposit of $2,500 to fund your brokerage account. Fidelity offers live chat and 247 phone support – It’s free, very fast, and simple to use (I've tried it myself). Most mobile devices are compatible with Fidelity. With hundreds of webinars to educate investors, Fidelity is a great place to begin your investing career. To open up a Fidelity account, visit their official website at Fidelity. com. E*Trade is the only online stock broker I can think of that advertises on television, making them the most well known on this list. E*Trade is also one of the more expensive, as they charge $6.95 per trade and an additional $25 if you use a broker to execute the trade. E*Trade is currently offering free trades for the first 60 days of opening your account, but you will have to fund it with at least $10,000 (and of course other restrictions apply). E*Trade's technology and platform are like no other and for experienced investors, E*Trade by far is your best option. However, for the casual investor, it may be a better idea to go with one of the other brokers, to save money on fees. To open up an E*Trade account, visit their official website at ETrade. com. Capital One Investing (formerly Sharebuilder) is an excellent trading platform that allows users to make trades online at a price of $6.95. In addition, Capital One Investing now also offers managed portfolios.

One of the premier benefits of having an account with Capital One Investing is that it can be connected with your Capital One 360 account, making transactions to and from the bank a snap. There is no minimum required to open an account and they are offering a variety of bonuses based on the amount of your initial deposit. While you need to deposit at least $200,000 to receive $600, you only need to start with $5,000 to earn $50. To open up a Capital One Investing account, visit their official website at CapitalOneInvesting. com. ChoiceTrade isn't your everyday online stock broker and if you visit their website, you'll know that right away. Rated four-star broker by Barron's for the last six years, ChoiceTrade offers $5 online trades with NO penny stock surcharge (very hard to find). However, the mail drawback to using ChoiceTrade is their platform. If you're looking for good technology, you will have to pay for it. Their basic online streaming platform costs $14.95 per month and their premium platform is $135 per month. ChoiceTrade does feature an in-depth investor community where you can ask thousands of fellow users your questions. Also, you can sign up for a virtual account with a $100,000 balance to try out their services. To open up a ChoiceTrade account, visit their official website at ChoiceTrade.

com. thinkorswim has been around since 1999, and is now owned by TD Ameritrade. thinkorswim is known as one of the best places to trade options because of their superior technology, as well as a hub for options educational information. In 2017, they were ranked #1 for long-term investing by Barron's and #1 overall broker by StockBrokers. com. You can trade stocks for a flat fee rate for $6.95 – with no account balance requirement or limit on how often you can make trades. Broker-assisted trades will cost you $44.99. TD Ameritrade is currently offering 60 days of commission-free trading when you fund an account with at least $3,000, and higher initial deposits will earn you an additional cash bonus. They offer 247 customer support and they don’t charge any fees for access to the trading platform or other data. TD Ameritrade offers “Paper Money” accounts, to try out different strategies with no real money involved. To open up a thinkorswim account, visit their official website at thinkorswim. com.

SogoTrade is one of the quieter online stock brokers and unless you've already signed up an account with them, this may be the first time you've heard of them. SogoTrade is one of the leaders in cheap stock trading with a $3 rate for those who make at least 150 trades per quarter (otherwise the fee is $5). With their four unique trading platforms and an app (available for Apple or Android devices), SogoTrade continues to implement game-changing technology. All of their platforms provide customers up-to-the-second data to help them make the well-informed trades. There are no account maintenance fees and the initial required deposit is only $500. SogoTrade protects customer account funds up to $500,000. To open up a SogoTrade account, visit their official website at SogoTrade. com. Not into active, online trading? Try something a little less hands-on. See our list of the best Robo Advisors. Join 36,000 subscribers improving their financial life. Subscribe for free. Get my book (31 Days to Improve Your Financial Life), intro series, and article digest.

Success! Now check your email to confirm your subscription. Philip Taylor, aka “PT”, is a CPA, financial writer, podcaster, FinCon Founder, husband, and father of three. He created PT Money back in 2007 to share his thoughts on money and to meet others passionate about managing their finances. All the content on this blog is original, and created or edited by PT. Read more about Philip Taylor, and be sure to connect with him on Twitter, Facebook, or Google+. Listen to the new podcast, Masters of Money! Comments. I would suggest LOYAL3 to add in this list. I think sogo trade is not the cheap because if we do not do 150+ trade in a quarter then they charge $5 instead $3 as standard. I believe Banc De Binary is not applicable for US resident. They site said that.

Thanks for the info! I signed an account with sogotrade, after days of research I finally found a good broker for international clients! 🙂 The 1st thing I noticed is the REALLY fast live support response in chat (I asked about “any additional fees for non-US residents?” – they said no), so now I opened an account, and have to print and mail them the 3 PDF files they ask to fill and sign by hand (then scan and mail), overall I have a very good feeling about the broker 🙂 I hope they will not disappoint me. Very impressive post! Banc De Binary is yet another financial organization providing cheap trading services, would be happy if you also add them in this list. It is a good choice for both the casual and experienced investors. I completely agree with your point that E trade is a good option for experienced investors but not for casual investors who would have to pay a lot of fees on some basic things. Please try to make your post more interesting and fun to read. @Lopez well, it seems that it was only yesterday. bbinary is now a very powerful brand with loads of features and great commissions as well. “We expect to become a leader in online trading technology and financial services” – Well, I think Aaron was right about it (: A lot of great reviews sites also popped up as mushrooms after a good rain.

Needless to mention bancdebinaries. com that’s doing a great job promoting the binary options broker itself – great tips, great guides and a very powerful binary trading system. keep your work up guys, you’re doing it great! Thanks for sharing, it was very useful…. Join 36,000 Subscribers. Success! Now check your email to confirm your subscription. Social. The content of ptmoney. com is for general information purposes only and does not constitute professional advice.

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