5 Best Options Trading Platforms of 2024 (2024)

To practice options trading, choose an options trading platform that offers a free paper trading account. With paper trading, virtual money is used to place options trades in a simulated environment. E*TRADE, Charles Schwab, tastytrade, TradeStation, Webull, and Interactive Brokers all let you paper trade options.

Here's a summary of the primary options trading features offered by the best options trading brokers. See the end of this guide for a definition of each feature.

Here's a summary of the pricing for the best options trading brokers.

Options trading involves buying and selling the rights to buy or sell securities at specific prices at certain dates. Picture betting on a sports game and being able to buy and sell that bet as the game progresses. That, in a nutshell, is how options trading works, though of course it’s a bit more nuanced than that. Option prices fluctuate on the price and volatility of their underlying investments and the time remaining until the options expire. Traders use options to speculate, reduce risk, or generate income.

The best options broker for you will depend on:

• how frequently you trade.
• your knowledge level.
• the strategies you use.

For example, a broker that caters to beginners will use less jargon and provide more visuals to help you evaluate a trade before you hit the submit button. A broker that caters to experienced traders will pack as much data onto a screen as it can and assume that you know what all that data is telling you.

Based on our testing and analysis, here are the best trading platforms for options in 2024.

• Tastytrade - 4 Stars - Best options trading platform and tools, great pricing
• Charles Schwab - 5 Stars - Industry standard thinkorswim platform, equity tools and research
• Interactive Brokers - 4.5 Stars - Best for professional options traders
• E*TRADE - 5 Stars - Best web-based platform and provides equity tools and research
• Merrill Edge - 4.5 Stars - Best for beginners

While Robinhood offers free options trading and is very easy to use, it did not make it into our top five top-rated options platforms. It doesn’t have the comprehensive research and education of our beginner's top pick, Merrill Edge; nor does it offer the rapid-fire trading and analytics offered by our overall options favorite, tastytrade.

Current Fidelity customers will find Fidelity’s options tools are fine for occasional use and the $0.65 per contract fee is in line with what other large online brokers charge. Active options traders can find brokers with lower options fees and more responsive platforms. If you are willing to accept sparse tools, some brokers don’t charge anything for options trades.

Firstrade, Robinhood, SoFi Invest, and Webull do not charge options commissions, exercise or assignment fees. For sophisticated traders who demand cutting-edge technology and analytics, we suggest tastytrade, which charges $1 per contract round-trip but has a cap of $10 per leg ($10 to open, $0 to close), making it relatively inexpensive for traders who take larger positions.

Instead of calling their revenue per trade “commissions,” many brokers charge per-contract fees (including some brokers who claim to have "zero commission" options trading). The exceptions are Robinhood, SoFi Invest , Firstrade and Webull, which charge no commissions or fees for options. Of these, we prefer Webull, which has a silky-smooth desktop platform.

A call option locks in the right to buy a stock (or other security) at a certain price (called the “strike”) until a specific date (the expiration). If the price goes above the strike price, then the call owner can buy the stock for the strike price and sell it for the market price. The premium is what the call buyer pays the call seller for this privilege. If the stock doesn’t rise above the strike price before expiration, the call buyer loses the whole premium. Investors can also sell call options to earn premiums. A contract usually represents a call on 100 shares of stock.

A put option locks in the right to sell a stock (or other security) at a certain price (called the “strike”) until a specific date (the expiration). If the price goes below the strike price, then the put owner can sell the stock for the strike price, which is higher than the market price. The premium is what the put buyer pays the put seller for this privilege. If the stock doesn’t fall below the strike price before expiration, the put buyer loses the whole premium. Investors can also sell put options to earn premiums. A contract usually represents a put on 100 shares of stock.

“0DTE” stands for “zero days until expiration.” These options are inexpensive because they have only a day or less before the option expires. They are also extremely speculative because, in the short term, stocks’ movements are close to unpredictable. We at StockBrokers.com think they are only suitable for highly sophisticated options traders.

Yes, you can get rich with options trading — in theory. The attraction of options trading comes from leveraging a little money to control a lot of stock or some other investment. To become successful at it (and most don’t), you’re going to need to not only be right about the market’s direction, but also the timing. You should master profit/diagrams, implied volatility, and the options Greeks, which quantify the effects of time, price and volatility on option premiums.

You should have at least $5,000 that you are prepared to lose, and speculative options trading should only account for 10% of your portfolio. Though you can get started with as little as a few hundred dollars, that’s more or less rolling the dice. Experienced options traders maintain several positions at once that tend to offset risks, and that can’t be done with a few hundred dollars.

Yes, you can. You will only be able to buy options with premiums of $1 or less. When it comes to options, that old saying “You get what you pay for” applies perfectly. Options of $1 or less are often highly speculative. They can come with little time left until expiration and need the underlying stock to move dramatically for them to pay off.

Yes. Options trading is a form of leveraged investing and thus is inherently risky. Any time an investor is using leverage to trade, they are taking on additional risk. Many times, this risk is unforeseen and not easily quantified.

On the most basic level, investors who buy a call or put option are only risking the money they invested in the contract. However, when selling a call or put, if the trade isn't protected (also known as going naked), the investor is taking on potentially unlimited risk.

As a protective measure, there are different options approval levels (usually four), and being approved requires an application through the online broker platform to unlock. The riskier the options strategy, the more demanding the requirement will become to be approved.

All of the best brokers for options trading offer the following features.