Here is a great post by Option Genius about the best option brokers.
Not all brokers are created equal.
To make a living trading options, you must have a good set of tools. One the tools that is essential is a good broker. With so many to choose from, there is no excuse for having a lousy broker.
As option sellers, we need to have an option friendly broker. This is a broker than either specializes in options, or considers option traders a very important customer base.
By using an option friendly broker you will get
- better commissions
- better margin requirements
- better prices on your orders
- better software/platforms to trade on
- better information
- and better education
How do you tell if your broker is an option friendly broker?
- If your broker advertises on national tv, it’s probably not an option friendly broker.
- If your broker is a household name ( they have their name on a stadium), they are probably not an option friendly broker.
- If your broker’s main sales pitch is how low their stock commissions are, they are probably not an option friendly broker.
So how do you find an option friendly broker?
- A broker with the word “option” in their name probably IS an option friendly broker.
- If your broker charges less than $2 for a single option or less than $30 for a dozen, they probably ARE an option friendly broker.
- If you can trade options from their own software, on the internet, or from your cell phone, you probably have an option friendly broker.
- If your broker puts on seminars and webinars teaching option strategies, you probably have an option friendly broker.
- If you can call their help desk and have them walk you through an iron condor trade, without them asking you what an iron condor is – you probably have an option friendly broker.
Finding a broker is not hard. Finding an good option broker is a little trickier. But if you ask option traders you will get many suggestions. Of if you join my site, I will show you which ones I think are the best.
Having a broker that is not option friendly, is like trading with one hand tied behind your back. Don’t do it.
If you are interested in forex trading, don’t forget to check out https://www.bestonlineforexbroker.com/top-forex-brokers/
Gav, have been following your posts for some time now. How would you rank IBKR vs TD for options trading? IBKR has market data fees and inactivity fees but lower commissions and margin rates. Customer service I hear is pretty bad. TD has tons of investor training tools and friendly customer service. Commissions have come down quite a bit and they give more discounts if bringing in a big account. Don’t know about execution quality of either. Do you mind sharing your thoughts on these brokers?
I would go TD over IBKR. Unfortunately I can’t get a TD account given I am not in the US. I’m very happy with IBKR, but I think ToS is better.
Tastytrade.