Online Options Trading Review

Discount online options brokers provide trading opportunities to self-directed traders at a discounted price. Utilizing an online options trading service you can place options orders, exercise options, satisfy an option assignment, buy and sell stock and more. The discount broker market is highly competitive, which means they are motivated to provide deep discounts to volume traders, incentives to high balance holders and low-priced flat fee trades to everyone. The best online options trading brokers range from established full-service brokers with deep roots in traditional stock trading and investment account management to relatively new brokers who entered the market with an online trading platform from the starting gate.

The best options broker that will work best for you depends on how you like to trade, how much you want to risk and how often you trade. If you are a traditional investor that is looking towards long-term slow growth with occasional stock and options trading, a full-service broker may be a good choice for you. If you are a volume trader that wants to trade often, you will want to look to an online broker that provides incentives to volume traders with a high balance. If you are a dabbler and do not have much capital to risk, a broker that does not require a minimum balance and offers low fees for orders under 10 contracts is most suitable.

To learn more about two standout online stock options trading brokers with the lowest fees and commissions check out OptionsHouse and TradeKing. To explore the online broker that provides the best trading platforms coupled with fair pricing see TD Ameritrade. To learn more about options trading, read our articles about online options trading.

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Online Options Trading: What to Look For

Though most options brokers also offer other investment opportunities, for the purpose of this review we looked at their option-specific fees, trading platform and research tools. The best brokers provide extensive options education, trading platforms that can easily place all types of options trades, and low base and contract fees.

Fees & Commissions
If you are an options trader, you likely trade often and in volume. You know that even small differences in fees and commissions can make a big difference in your profitability. We looked for discount brokers that offer low flat fees and discount rates for high-volume options traders. We also compared options exercise and assignment fees, stock trade fees and margin rates. We rated highest those that provide competitive fees to low-volume as well as active traders.

Trading Tools
Most brokers offer a varied collection of trading tools, from mobile trading platforms to streaming charts. We noted what research tools they offer options trading clients, the type of options orders they can create and what kind of trading platforms they provide. The best online options brokers provide easy-to-understand research tools, up-to-date market information and a choice of trading platforms. Though brokers offer web-based trading platforms that may be accessible from a web-enabled mobile device, we made note of those that provide applications for specific types of devices.

Customer Service
When it comes to brokers, exceptional customer service is not optional. Since they manage your money, we think they should be available during generous business hours by telephone, email and chat. Even though they may not provide a specific account manager for you like traditional brokers, we still think discount brokers should have educated, courteous representatives accessible should you have a trade question or a question about your account. Although you may already have a long list of trade resources that you use, we looked at what kinds of educational opportunities the broker provides as well.

If you are an experienced options trader or just looking to start experimenting, you understand the risks and rewards associated with online options trading. However, with a low-priced, straight-shooting online options broker that provides volumes of research tools and educational opportunities you can manage your risk and trade your way to mastering the options market.