The Best Options Trading Platforms in 2023
Options trading has gained significant popularity in recent times due to volatile market conditions and the flexibility it offers for hedging and speculating. To help you make an informed choice, we have thoroughly researched and reviewed the best options trading platforms available in 2023. Whether you're a seasoned trader or just starting, these platforms offer various features to cater to your specific needs.
Tastytrade: Best Overall Options Trading Platform
Pros:
- Competitive commission rates for options.
- Multiple tools for analyzing and monitoring options trades.
- Extensive library of options-specific content and educational material.
- Focus on trading, making it ideal for active investors/traders.
Cons:
- Limited investment choices.
- Weak portfolio analytics.
- Delayed news feed.
Overview:
Tastytrade, formerly known as Tastyworks, is our top pick for the best overall options trading platform in 2023. It was created by the same minds behind TD Ameritrade's thinkorswim® application. Tastytrade is tailored for active investors and traders, offering access to stocks, ETFs, options, futures, and cryptocurrencies.
One of its standout features is its competitive fees for options trading. Opening options positions costs just $1 per contract for each leg, capped at $10 per leg for any trade, regardless of size. Additionally, tastytrade does not charge a commission for closing positions, making it highly cost-effective, especially for high-volume traders.
Beyond cost savings, Tastytrade provides robust options analytics, an intuitive order entry system, and detailed probabilities for various options strategies. Their desktop and mobile platforms offer a consistent user experience, making it easy to transition between devices. While they provide real-time streaming quotes, live-streaming news is not available. However, they compensate with a Follow Traders feature, allowing users to track in-house celebrities' trades. Tastytrade also boasts prompt and capable customer support, with a high Trustpilot rating.
TD Ameritrade: Best for Mobile Options Traders
Pros:
- The broad range of product offerings.
- Excellent educational materials.
- Solid options analytics on thinkorswim®.
- Consistency between the desktop and mobile platforms.
Cons:
- No fractional shares trading.
- No automatic sweep of uninvested cash.
- Limited cryptocurrency trading options.
Overview: TD Ameritrade takes the crown as the best platform for mobile options traders in 2023. Renowned for its educational resources and a wide range of asset classes, TD Ameritrade offers comprehensive options trading tools. The thinkorswim® mobile app, while not as feature-rich as its desktop counterpart, provides watchlists, streaming real-time data, charting, and trading from charts. Traders can also customize their strategies and set automatic triggers.
The platform allows users to backtest trading strategies and route orders to specific exchanges, offering flexibility and control. TD Ameritrade's thinkorswim® is a top choice for options traders who want to access markets on the go.
Interactive Brokers: Best for Advanced Options Traders
Pros:
- Superb options screeners and probability calculators.
- Superior order execution and routing controls.
- Widest range of trading vehicles and market locations.
- Low margin rates.
- Available paper trading.
Cons:
- Advanced platform features can be intimidating for new users.
- Order routing is not available to all clients.
- No backtesting of custom algorithms.
Overview:
Interactive Brokers (IBKR) earns its place as the best platform for advanced options traders in 2023. The company has a rich history, offering a wide range of security types across global markets. IBKR provides low options commissions, with rates ranging from $0.15 to $0.65 per contract.
One of its key strengths lies in its options analysis tools, available on both desktop and mobile platforms. These tools include options spread templates, key options Greeks, and indicators for determining the benefits of early options exercise. Advanced traders will appreciate options analytics, payout graphs, and portfolio analysis tools, making IBKR a comprehensive solution for options trading.
E*TRADE: Best for Beginning Options Traders
Pros:
- Excellent educational content.
- User-friendly platforms for desktop and mobile.
- Paper trading for practice.
- Wide asset class offerings.
Cons:
- Higher commissions for options trading.
- Higher fees for infrequent traders.
- Limited support for international trading, forex, and cryptocurrency.
Overview:
ETRADE is our top choice for beginners in the options trading space. While it charges higher fees for options trading compared to some competitors, its user-friendly platforms and extensive educational materials are ideal for novice traders. ETRADE was one of the first online brokers.
ETRADE's strengths lie in its tools and analytics, providing new options traders with the resources needed to learn and practice. The ability to paper trade allows users to experiment with various options and strategies before committing to real capital. ETRADE also offers a broad range of asset classes, including stocks, ETFs, mutual funds, and fixed income, making it a versatile platform for investors.
Webull: Best for Low-Cost Options Trading
Pros:
- No-cost trading for stocks, ETFs, and options.
- Strong desktop and mobile platforms.
- Access to pre and extended-hours trading.
- Free real-time streaming quotes, news, and fundamentals.
- Above-average research capabilities.
Cons:
- Limited to stock, ETF, options, and cryptocurrency trading.
- Less robust options analysis tools compared to larger competitors.
- Weak portfolio analysis tools.
- Payment for order flow may result in poor price execution.
- No interest is earned on uninvested cash.
Overview:
Webull stands out as the best platform for low-cost options trading in 2023. With no direct costs for stock, ETF, and options trading, Webull offers a cost-effective solution for traders. While it doesn't have the extensive options analysis tools of larger competitors, it provides strong desktop and mobile platforms with free real-time streaming quotes, news, and research capabilities.
Webull's focus on a mobile-first strategy caters to a younger, tech-savvy audience. It recently added CBOE products to its platform and introduced fractional share trading. This makes it an attractive choice for cost-conscious traders, especially those with higher trading volumes.
Guide to Choosing an Options Trading Platform
When selecting an options trading platform, it's essential to consider your trading style, risk tolerance, and specific needs. Here are key factors to keep in mind:
1. Trading Style:
- Are you looking to hedge or speculate?
- Which options strategies do you plan to use?
- Are you seeking income generation or capital appreciation?
2. Education:
- Evaluate the quality and quantity of educational resources offered by the platform.
- Look for articles, videos, webinars, and guides to support your learning journey.
3. Commissions and Fees:
- Assess the cost structure, including commissions and fees.
- Consider how costs may impact your trading strategy, especially for high-volume traders.
4. Tools and Analytics:
- Check the availability of options-specific tools and analytics.
- Ensure the platform provides features that align with your trading strategy and preferences.
5. Platform User Experience:
- Test the platform's usability and interface.
- Determine whether it
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