Of all the asset classes commonly provided by online brokers, options are one of the easier ones to differentiate between brokers because, unlike stocks or ETFs, many brokers still charge for options trades. Our best options brokers have a wealth of tools that help you measure and manage risk as you determine which trades to place. They also feature robust educational content designed to help you grow in sophistication as an options trader.

Best Online Brokers for Options Trading:

  • Best Options Trading Platform: tastyworks
  • Best Broker for Beginning Options Traders: E*TRADE
  • Best Broker for Low-Cost Options Trading: Webull
  • Best Broker for Advanced Options Traders: tastyworks
  • Best Broker for Mobile Options Traders: tastyworks

tastyworks: Best Options Trading Platform

3.8
  • Account Minimum: $0
  • Fees: $0.00 stock trades, $1.00 to open options trades $0.00 to close
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Why We Chose It

When we focus on options trading—a niche (albeit a rapidly growing one) within the traditional definition of trading—we see online brokers that are overshadowed by the large players in other categories suddenly shine through. This includes players like eOption and Webull; however, tastyworks is the broker that shines through the brightest. While we give a lot of weight to the pricing on contracts with our scenario of a 50 contract trade, the best overall options trading platform has to provide the tools along with that price. Tastyworks sits in the sweet spot where its options-specific tools can compete with a powerhouse like E*TRADE, while its pricing makes it more attractive. There are cheaper options brokers depending on how many contracts you will be trading at a time, but tastyworks has a better overall platform. The final factor pushing tastyworks over the top is the excellent options trading content it produces for its customers, keeping them up-to-date and informed when they aren’t glued to the charts. 

Pros
  • All the options tools you need

  • Charting is tweaked to options, allowing you to analyze the risk profiles of the combined position

  • Fantastic library of original,-options focused content

Cons
  • There is no fixed income trading (outside of ETFs that contain bonds)

  • Additional portfolio analysis requires setting up an account with the Quiet Foundation, also part of the tastytrade empire

E*TRADE: Best for Beginning Options Traders

4.5
  • Account Minimum: $0
  • Fees: No commission for stock/ETF trades. Options are $0.50-$0.65 per contract, depending on trading volume.
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Why We Chose It

Although we score low costs high in all options categories, and particularly for beginners, E*TRADE takes the best broker for beginning options traders despite not being the cheapest at $0.65 per contract ($0.50 if you make more than 30 trades per quarter). The reason E*TRADE prevails in spite of its pricing disadvantage is that it has an innovative platform, extensive tools, and excellent educational resources to help new options traders develop their trading skills. The options order ticket now has options trading strategies built into it so you can easily pick one to match your risk tolerance and sentiment. Selecting one of these also gives you a preview of how the proposed trade will impact your buying power. Built-in support like this combines with a deep library of educational resources to make E*TRADE our pick for best broker for beginning options traders.

Pros
  • Comprehensive mobile app and robust options tools in the trading platform

  • Spectral Analysis on Power E*TRADE visualizes key elements of your potential trade

  • You can test strategies using the paper trading capabilities of E*TRADE Pro’s desktop platform

Cons
  • Tiered commission schedule for options trades is higher than options-focused competitors

  • No direct access to international markets or forex

Webull: Best for Low-Cost Options Trading

3.6
  • Account Minimum: None
  • Fees: $0 commission to trade stocks, listed options, and ETFs
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Why We Chose It

As we said in our full review of Webull, it is essentially a no cost broker, not a low cost broker. Webull's main advantage in pricing is the fact that it offers US listed options in addition to stocks and ETFs. The most surprising thing about Webull is the fact that its options tools and charting abilities are robust for a broker that costs next to nothing to trade on. The options tools help you set up common options strategies and customize them further using different order types and adjustments to the width between strike prices in multi-leg strategies. If you are looking to trade options at the lowest possible price, Webull is the broker for you.

Pros
  • No commissions on stocks/ETFs, U.S.-listed options, or cryptocurrencies

  • Access to extended hours and pre-market trading

  • Intuitive trading platform with surprisingly powerful functionality given the low-cost

Cons
  • Platform isn't as robust as some options-focused competitors

  • No access to fixed income, mutual funds, foreign exchange, or futures markets

  • Limited range of tools for portfolio management

tastyworks: Best for Advanced Options Trades

3.8
  • Account Minimum: $0
  • Fees: $0.00 stock trades, $1.00 to open options trades $0.00 to close
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Why We Chose It

Tastyworks is designed from the bottom up with advanced options traders in mind. This has kept it as our pick for this category despite stiff competition. Although not the cheapest in terms of trading costs anymore, tastyworks' rich options-focused toolset shines brighter than the competition. There are drag-and-drop option orders, position analysis is displayed directly under the options chain, and every tool and screener is optimized for options traders. If you already know options trading, tastyworks has a lot to offer to go along with its competitive pricing structure.

Pros
  • Fully customizable trading experience with capabilities of streaming quotes in real-time on multiple platforms

  • Advanced tools are all designed specifically for options trades

  • Relevant content by experts to help even advanced traders learn new things

Cons
  • Options focus limits the ability to day trade more broadly

  • There is no fixed income trading

  • Lack of general features like market news, research, and non-option screeners

tastyworks: Best for Mobile Options Traders

3.8
  • Account Minimum: $0
  • Fees: $0.00 stock trades, $1.00 to open options trades $0.00 to close
Read full review

Why We Chose It

The competition in this category was extremely tight between E*TRADE and tastyworks. That being said, tastyworks takes home our best broker for mobile options traders for the same reason it is our best broker for advanced options traders—a tight focus on what options traders need. Tastyworks' mobile app doesn't burden itself with holding all the features traditional brokers try to mirror from their full-service offerings. The tastyworks app is fundamentally the same as the desktop platform. The order entry on the app is drag-and-drop, although we found the charting and graphing to be displayed smaller than was ideal depending on your device. Offsetting that complaint is the fact that the app pre-populates a trade ticket as you build a position from the charts on the app. Once you are familiar with the operation of the tastyworks desktop platform, the workflow of the app will be obvious. The fact that the app mirrors the desktop means that you have the best lineup of advanced options tools at your fingertips, no matter which tastyworks platform you are on.

Pros
  • Drag and drop approach for simple order entry

  • Trading from charts is intuitive and fast

  • Easily view video content from the tastytrade network on the go

Cons
  • Graphs and charts may display on the smaller side

  • The workflow is inherited from the desktop, so you need to learn that first

  • You cannot set price alerts and order notifications from the app

Other Options Considerations

The commission structure for options trades tends to be more complicated than its equivalent for stock trades. Until the commission cuts that swept the industry in the fall of 2019, most brokers charged a fee for each leg of an options spread plus a commission per contract being traded. The per-leg fees, which made 2- and 4-legged spreads expensive, have been eliminated industry-wide, for the most part. We are also seeing some brokers place caps on commissions charged for certain trading scenarios. 

Investors with fairly large portfolios can also take advantage of portfolio margining at some brokers. This is a practice that assesses the total risk inherent in a portfolio that contains stocks and derivatives. Investors with large portfolios can use portfolio margining to reduce the size of the margin loan. 

What Kind of Options Trader Are You?

The first and most important piece of information to consider before selecting an options trading account is what kind of trader you are. What is your trading style and risk appetite? Which tools would you like to have handy?

If you're just getting started with options trading, the quality of education and help offered by your broker is important. Frequent traders and those who trade a large number of contracts will be more sensitive to commissions and fees, so check out your prospective broker's charges and make sure you understand them.

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Methodology

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on its platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting thousands of data points that we weighed into our star-scoring system.

Our best options brokers have a wealth of tools that help you measure and manage risk as you determine which trades to place. These brokers include valuable education that helps you grow in sophistication as an options trader. Investors with fairly large portfolios can take advantage of portfolio margining at certain brokers, a practice that assesses the total risk inherent in a portfolio that contains stocks and derivatives, and can reduce the size of your margin loan. Click here to read our full methodology.