Trading options is the process of buying and selling stocks at a pre-negotiated price by a certain date. Options are a type of contract that gives the trader the right to buy or sell a particular stock in the future but does not require them to eat the losses should they choose not to buy. And when you're trading, your profits are only as good as the platform you use. Here are Benzinga's favorites.
Quick Look at the Best Options Trading Software
The Best Options Trading Platforms
Check out Benzinga's top picks for the best options trading platforms and open a brokerage account today.
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Featured Options Platform: Tradier
Tradier is a high-tech broker for active traders. Tradier differentiates itself by using application programming interface (API) technology to partner with popular trading software to offer a wide range of platform choices.
Tradier invented the idea of an API-integrated brokerage firm with customizable interface options. Most brokers lock you into a pre-set interface, allowing you limited ways to customize your trading station, but not Tradier. You can integrate your platform of choice into your Tradier workstation while you take advantage of Tradier’s low fees and commissions.
Tradier is compatible with a wide range of platforms:
- Orion Multi Trader
- And more!
Its tradable assets include stocks, options and ETFs and its TradeHawk mobile platform is available for an additional fee with fast-streaming data options.
It requires a $0 minimum investment and two fee schedules. The standard equity and options trading comes with $0 fees per order and $0.35 per contract. If you’re a particularly active trader, you might prefer Tradier’s all-inclusive subscription model.
- It’s $30 a month for commission-free equity and options trading.
- You’ll pay $10 for broker-assisted trades, which is significantly less expensive than competing brokers.
- Tradier’s current margin rate is 5.25% for all traders, no matter how much margin you use.
Options contracts are like "betting" on the movement of a stock—if you think a stock will increase in value but you're not ready to commit to a purchase right now, you can "lock in" a price (called a "strike price") to buy at a later date.
Many beginning investors choose to lace their money into the options trading market rather than stocks, bonds or forex because it requires less of an initial investment and gives the trader more time to see how the stock will move before spending money. Just like how stockbrokers have largely moved their practices online, you can now buy and sell options from the comfort of your own home.
What is Options Trading Software?
Options trading software is a computer program or application that is specifically designed to assist traders in analyzing, executing, and managing options trades. This software often includes various tools and features that help you make informed decisions and maximize profits in the options market.
Characteristics of a Great Options Trading Platform
Some common features of options trading software include:
This feature provides a comprehensive view of all available options contracts for a particular underlying asset, including their strike prices, expiration dates, and other relevant details.
Options trading software often includes advanced analytical tools such as options calculators, volatility analysis, and probability calculators. These tools help traders evaluate the potential risks and rewards of different options strategies.
Options trading software may include integrated trading platforms that allow traders to execute their trades directly from the software. These platforms provide real-time market data, order placement capabilities, and trade execution tools.
Some options trading software offers strategy builders that enable traders to create and test various options trading strategies. These builders allow users to backtest their strategies using historical data to evaluate their performance before implementing them in live trading.
Risk Management Tools
Options trading software often includes risk management tools that help traders monitor and manage their risk exposure. These tools may include features such as stop-loss orders, profit targets, and position sizing calculators.
Education and Research
Many options trading software platforms provide educational resources and research materials to help traders enhance their knowledge and understanding of options trading. This can include tutorials, webinars, market analysis, and access to expert insights.
Ease of Operation
Successful options trading hinges on your ability to operate your software quickly and with precision. The best options platforms offer simple, aesthetically-pleasing designs that are easy to understand and operate. Look for platforms that offer a free demo before opening an account or check out user video tutorials detailing how to use the platform you're considering. These moves can save you a massive headache in the long run.
Comprehensive Customer Support
Comprehensive customer support can help you effectively troubleshoot technical problems and avoid missing out on hours of day trading, something especially important on the short term options market.
There are a number of fees associated with trading options, ranging from an initial options base fee to a commission fee attached to each individual options contract. Carefully consider all of the fees associated with your platform of choice before making a commitment, as seemingly nominal fees can quickly snowball into significant lost profits.
Master Options Trading Strategies with the Best Options Trading Software
Options trading software aims to simplify the complex nature of options trading and provide traders with the necessary tools and information to make informed decisions. It can significantly enhance the efficiency and effectiveness of options trading strategies, ultimately improving the trader's overall performance in the options market.
Frequently Asked Questions
What are the features of an excellent options trading platform?
The best options trading platforms are easy to use, have outstanding support and limited fees.
Which brokerage firms have the best options trading platforms?
The best brokers include Interactive Brokers, tastyworks and eOption for options trading.
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