Keeping the spotlight on excellent platforms and tools for options traders, TD Ameritrade's thinkorswim and TradeStation cannot be left out.
- Here's how we tested.
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Strategy Roller from thinkorswim enables clients to create custom rules and roll their existing options positions automatically. The number of settings and depth of customization available is impressive, and something we have come to expect from thinkorswim. TD Ameritrade thinkorswim options trade profit loss analysis. TradeStation OptionStation Pro.
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The broker also offers Idea Hub, which uses targeted scans to break down options trade ideas visually. For professionals, Interactive Brokers takes the crown. Additional savings are also realized through more frequent trading. Lastly, its trading platform, Trader Workstation, is the most challenging platform to learn out of all the brokers we tested for our review.
What is the best platform for trading options? The best trading platform for options trading offers low costs, feature-rich trading tools, and robust research. What is a call option?
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In its most basic form, a call option is used by investors who seek to place a bet that a stock will go UP in price. Buying a call option contract gives the owner the right but not the obligation to buy shares of stock at a pre-specified price for a pre-determined length of time.
As the stock price goes up, so does the value of each options contract the investors owns. Each contract represents shares of stock.
What is a put option? In its most basic form, a put option is used by investors who seek to place a bet that a stock or other security such as an ETF, index, commodity, or index will go DOWN in price. Buying a put option gives the owner the right but not the obligation to sell shares of stock at a pre-specified price strike price before a preset date expiration. The further the stock falls below the strike price, the more valuable each contract becomes.
What is the minimum amount required to trade options?
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Each online broker requires a different minimum deposit to trade options. To apply for options make money dollars approval, investors fill out a short questionnaire within their brokerage account. Access to begin trading options can be granted what platforms are better to trade on now thereafter. Is options trading risky?
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Options trading is a form of leveraged investing. Any time an investor is using leverage to trade, they are taking on additional risk. Many times, this risk is unforeseen. With options, investors who buy a call or put risk the money they invested in the contract.
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To protect investors, new investors are limited to basic, cash-secured options strategies only. Options Trading Features Ultimately, choosing an options brokers comes down to personal preference and weighing priorities, such as cost versus ease of use and tool selection.
On a feature by feature basis, all of our top five finishers this year offer the following features to their options trading customers.
Feature Definition Has Education - Options Provides a minimum of 10 educational pieces articles, videos, archived webinars, or similar with the primary subject being options.
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All content must be easily found within the website's Learning Center. Option Chains - Streaming Real-time Option chains with streaming real-time data. Option Chains - Greeks Viewable When viewing an option chain, the total number of greeks that are available to be viewed as optional columns. Option Analysis - Probability Analysis A basic probability calculator.
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Option Positions - Greeks Viewable View at least two different greeks for a currently open option position. Option Positions - Greeks Viewable Streaming View at least two different greeks for a currently open option position and have their values stream with real-time data.
Option Positions - Advanced Analysis Ability to analyze an active option position and change at least two of the three following conditions - date, stock price, volatility - and assess what happens to the value of the position.
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Option Positions - Rolling Ability to pre-populate a trade ticket and seamlessly roll an option position to the next relative expiration. Option Positions - Strategy Grouping Ability to group current option positions by the underlying strategy: covered call, vertical, etc.
The best brokers for day traders feature speed and reliability at low cost
Can be done manually by user or automatically by the platform. Screener - Options Offers a options screener.
Commonly referred to as a spread creation tool or similar. Read Next.