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Written by Kevin Mercadante on June 26, 2021
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Top 5 Brokerages For Options Trading In 2021

Options trading has become more popular in recent years, as investors look to leverage their returns above what’s available in traditional investment ownership. If you’re looking to trade options, selecting the right broker will be mission-critical. For that reason, we prepared this list of what we believe to be the five best brokers for options trading.

This is an important consideration for options traders. Not all brokers offer robust options trading platforms. And some don’t offer options trading at all. We’ve narrowed the list down to five that offer options trading, including specific options niches.

What to Look for in Brokers for Options Trading

Options trading is a very specialized type of investing, so you can’t simply pick any old broker. You’ll need one that offers specific options trading tools and resources.

We used the following criteria in coming up with our list of the five best brokers for options trading:

  • Low minimum initial investment requirement. Since you may want an account specifically for options trading, brokers with no account minimum requirement can be the best choice.
  • Available accounts offered. You’ll want the ability to use either taxable investment accounts or retirement accounts.
  • Investments available. Even though you’re looking to specifically trade options, it helps to know you can also take advantage of other investments with the same broker.
  • Fractional shares. Fractional shares are slices of shares, which can be important if you’re looking to trade options with a small amount of investment capital.
  • Customer support availability. Even if you don’t plan to use it, it does help to have strong customer support. But be careful! Even brokers offering commission-free trades have steep fees on broker-assisted trades.

Other factors we considered in compiling this list include investment tools and research. Specifically, those that apply to options trading. Education is another important feature since many investors are new to options trading. But even if you’re experienced, there’s always more to learn.

Finally, in developing this list we looked at broker niches. For example, some specialized in true no-fee options trading. Others do have fees, but are strong on investor tools, research, and education, and also offer generous customer support.

That’s the criteria we used to determine the five best brokers for options trading.

With that said, here’s the list:

1. Firstrade

Best for: Best all-around for options trading.

Why Firstrade is a good broker for options trading: Firstrade takes our number one spot, but not for any single reason. Let’s start with price; not only does Firstrade provide commission-free options trades, but they also don’t charge an options contract fee.

They also offer plenty of options-specific resources. This includes the Firstrade Options Wizard. It provides instant feedback on the value and likelihood of success of any options trades that you’re considering. It offers professional grade options analytics, including trading strategy checklists, one- and six-month trend indicators, support and resistance levels, proprietary OptionsPlay score, more than 65 technical indicators, over 40 complex options strategies, and more.

Firstrade’s free OptionsPlay tool helps you define opportunities and instantly execute trades. It provides daily bullish and bearish trading ideas, instant options strategies based on various market outlooks, and optimal income opportunities for any stock or exchange traded fund (ETF).

They also offer specific options education. That includes free options trading courses, a full options trading video library, and even live trading events with professional options strategists. Extended hours for trading are available from 8:00 AM to 8:00 PM, Eastern time.

Firstrade Basic Features:

  • Minimum Initial Investment: None.
  • Available accounts: Individual and joint taxable brokerage accounts; traditional, Roth, rollover, SIMPLE and SEP IRAs; trust, custodial, and business accounts.
  • Fractional shares available?: Yes
  • Investments offered: Stocks, bonds, ETFs, mutual funds, OTC penny stocks, and options.
  • Fees: Commission-free trades on stocks, ETFs, mutual funds, and options; no contract fee charged on options.
  • Customer support: By phone, email and live chat, Monday through Friday, 8:00 AM to 6:00 PM, Eastern time.

Firstrade Pros:

  • Not only can you trade options commission free, but there is no option contract fee either.
  • Professional grade options trading tools.
  • Offers specific options trading education resources.
  • 11,000 commission-free mutual funds, in addition to stocks, ETFs, and options.
  • Extended trading hours.

Firstrade Cons:

  • Cannot trade foreign stocks.
  • Lacks 24/7 customer service capability of the bigger brokerage firms.

2. Charles Schwab

Charles Schwab logo

Best for: Options trading tools.

Why Charles Schwab is a good broker for options trading: Charles Schwab is the largest retail brokerage firm in the world because the company is good at virtually everything, including options trading. They’re not as good as Firstrade on the price side; like most brokers, they do charge a contract fee on options trades. But their options trading tools are second to none.

Schwab’s Idea Hub canvasses the market for trade ideas based on various factors like market volatility, action, earnings, and income-based strategies. The Trade & Probability Calculator is available to assess potential risk, reward, and pricing scenarios of your trades before you make them. The All-in-One Trade Ticket enables you to make fast single, multi-leg, and conditional orders.

You can trade options on SmartStreet Edge, Schwab’s advanced desktop trading platform. And you can take advantage of the Walk Limit tool to work your orders for you. It automatically adjusts the limit price across specified time criteria and price increments, to obtain a favorable execution price within the bid/ask spread.

Charles Schwab Basic Features:

  • Minimum Initial Investment: None.
  • Available accounts: Joint and individual taxable investment accounts; trusts; traditional, Roth, rollover, SIMPLE, and SEP IRAs.
  • Investments available: Individual stocks, bonds, ETFs, mutual funds, options, and futures.
  • Fractional shares available?: Yes
  • Fees: No commissions on stocks and ETFs; $0 commissions, plus $0.65 per contract for options; more than 4,000 no-transaction-fee mutual funds.
  • Customer support: Phone and live chat, 24/7.

Charles Schwab Pros:

  • No commissions on options.
  • Wide range of options-specific investor tools, research resources and investor education.
  • Customer service is available on a 24/7 basis and is among the best offered in the industry.

Charles Schwab Cons:

  • They do charge a $0.65-per-contract fee on options trades.

3. Fidelity

fidelity logo

Best for: Customer support.

Why Fidelity is a good broker for options trading: Fidelity is the second-largest retail trading broker in the world, after Charles Schwab. Both companies have excellent customer support, but Fidelity also has 140 brick-and-mortar locations in most metropolitan areas around the U.S.

But the company offers a strong options trading platform as well. Starting with education, they offer free options webinars, as well as articles, videos, and courses to help you learn options trading or become a better trader. They also provide coaching sessions through interactive conversations with members of their Trading Strategy Desk.

Trading tools include Fidelity’s Market Scanner, Strategy Ideas, Profit and Loss Calculator, Probability Calculator, and a Strategy Evaluator, to evaluate single and multi-leg opportunities, search for calls and puts, and filter searches by expiration, strike, volatility, and other criteria. You’ll also have access to the Argus Options Report. It provides ideas for both covered calls and calendar spreads and other option information. You can also filter by days to expiration, in or out of the money strikes, risk, return, and other criteria.

Fidelity Basic Features:

  • Minimum Initial Investment: None
  • Available accounts: Individual taxable investment accounts, and traditional, Roth and rollover IRAs.
  • Investments available: Individual stocks, bonds, ETFs, mutual funds, options, and futures.
  • Fractional shares available?: Yes
  • Fees: No commissions on stocks and ETFs; $0 commissions, plus $0.65 per contract for options; more than 3,000 no-transaction-fee mutual funds.
  • Customer support: Phone support 24/7, plus 140 branches nationwide.

Fidelity Pros:

  • No trading fees on most investments, including options.
  • Wide range of investor tools, research resources, and investor education specifically for options trading.
  • Customer service is available on a 24/7 basis and, like Schwab, is among the best offered in the industry.

Fidelity Cons:

  • They do charge a $0.65-per-contract fee on options trades.

4. Webull

Best for: Margin trading and no options contract fees.

Why Webull is a good broker for options trading: Webull is one of the few brokers offering options trading both commission-free and with no per-contract fee. However, the platform is very limited in both trading tools and customer support.

Where Webull stands out is with margin trading. If you have a margin account with at least $2,000 in net value, you’ll get up to four times day-trade buying power, and two times overnight buying power. Although margin trading for options is different from what it is for stocks and other investments, Webull’s margin feature may be attractive if you are looking to invest in other securities, in addition to options.

For options trading, you can trade single-leg options, covered stock strategies, and vertical, butterfly, condor, collar, straddle, strangle, iron butterfly, iron condor strategies.

Webull Basic Features:

  • Minimum Initial Investment: None
  • Available accounts: Individual taxable investment accounts; traditional, Roth, and rollover IRAs.
  • Investments available: U.S. stocks, ETFs, options, and cryptocurrencies.
  • Fractional shares available?: Yes
  • Fees: No commissions on stocks or ETFs. No commissions or contract fees on options.
  • Customer support: Email only.

Webull Pros:

  • No minimum balance requirement.
  • Not only are there no commissions on options, but there are no contract fees either.
  • Perfect broker for quick, easy trading.
  • You can also trade cryptocurrencies on the app.

Webull Cons:

  • Very limited investment tools, research, or educational resources.
  • Customer services limited to email contact only.

5. Robinhood

Best for: No options contract fees and options trading on the go.

Why Robinhood is a good broker for options trading: Much like Webull, Robinhood is an investment app that makes trading on-the-go a snap. And much like Firstrade, they not only offer commission-free trades on options, but also charge no contract fee. That presents options traders with a definite price advantage over most of the competition. But we can’t rank Robinhood as high as Firstrade because it doesn’t have as many trading tools, nor does it offer the level of customer support.

Like many investment apps that have sprung up in recent years, Robinhood is a limited trading platform that focuses on low cost and fast trades. Tools and research are limited, so the platform is not suitable for new investors. But if you’re confident in your options trading skills, Robinhood can be the perfect, true no-fee options trading platform.

And if you like, Robinhood is also one of the few trading platforms that offers trading in cryptocurrencies.

Robinhood Basic Features:

  • Minimum Initial Investment: None
  • Available accounts: Individual taxable investment accounts only.
  • Investments available: U.S. stocks, ETFs, options, and cryptocurrencies. Limited trading of foreign securities through American depositary receipts (ADRs).
  • Fractional shares available?: Yes
  • Fees: No commissions on U.S. stocks or ETFs; no commissions or per-contract fees on options.
  • Customer support: Email only.

Robinhood Pros:

  • No minimum initial investment required.
  • No commissions or per-contract fees for options.
  • Offers cryptocurrency trading.

Robinhood Cons:

  • Very limited trading tools and resources.
  • No availability of IRA accounts.
  • Very limited customer support.

Bottom Line

If you’re an advanced options trader, it’s likely you already found your preferred broker. But that choice isn’t always obvious for beginners or even intermediate traders.

Though many brokers offer options trading, it’s not necessarily their specialty. But that’s exactly what you need to be successful. Any of the five brokers listed above should qualify for the job.

If you’re more confident in your options trading skills, you’ll probably favor those that offer trades that are both commission free and have no per-contract fee. That will put Firstrade, Webull and Robinhood at the front of the pack. But if you’re a newbie, and need more investment tools, research, and education, larger platforms like Charles Schwab and Fidelity will be the better choice.

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Article written by Kevin Mercadante
Kevin Mercadante is a freelance professional web content writer for hire, and the owner of his own personal finance blog, OutOfYourRut.com. He has extensive backgrounds in both accounting and the mortgage industry. In fact, it was his career crash-and-burn from the mortgage business in 2008 that led him into blogging and freelance professional web content writing. Kevin and his family live in New Hampshire, after long stints in New Jersey and Georgia.

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