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5 Best Trading Platforms in Europe Ranked for 🥇
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Rating image, 4. Bottom Line Robinhood is an efficient trading platform that captures a spot as one of the cheapest options brokers. Read Full Review.
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Special Offer Get a free stock with a new account. TradeStation Open Account. Bottom Line A discount broker that's designed for active traders and cost-sensitive investors. TD Ameritrade. Rating image, 5. Bottom Line Stands out as not only one of the top options brokers but also a top rated all-around brokerage with outstanding tools and and comprehensive research. Read Review. Bottom Line Caters to active traders with multiple trading platforms, while also appealing to long-term investors with thousands of mutual funds and ETFs that can be traded for free.
Ally Invest. Interactive Brokers. Bottom Line The competitive base options commission and tiered per contract pricing, alone, land Interactive Brokers a spot on this list. Bottom Line A true, options-first stock broker, that sprinkles in the ability to trade mostly stocks, ETFs, and futures. Options come with their own unique terms, which investors should understand before making a trade: Call option: These options give you the right to buy stock at a certain price in the future.
Put option: These options give you the right to sell stock at a certain price in the future. Premium: This is simply what each option costs. Strike price: The price at which the option gives you the right to buy or sell stock. Expiration date: The date at which the option expires. On this date, the option must be exercised, or it will expire and be worthless. Contract: Options are typically traded in lots of shares with a few exceptions. These lots of options are called contracts. For example, one call option contract gives you the right to buy shares of stock at a specified price.
How put options work Put options work in a similar fashion as call options -- the only difference is that an investor who buys put options stands to make money when the price of a stock declines. Top features of the best options brokers. It makes very little sense to place a trade where the only likely winner is the brokerage firm.
Commissions have come down quite a bit in recent years, and most online brokers offer commission-free trading on stocks, but there's still quite a bit of difference within the industry when it comes to options.
Platform: Admittedly, an options trading platform often has more to do with personal preference than anything else, as placing a trade through any brokerage is usually a matter of a few clicks. It's also important to note that some brokers like TD Ameritrade offer a full-featured platform and an easier-to-use trading platform. Resources: Many brokers offer a full range of educational resources, which can be extremely valuable for investors who are new to options.
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As we mentioned, options can be very complex financial instruments and it is very easy to lose lots of money if you don't know what you're doing. Comparing the best options trading platform on commissions and fees. Commissions Most of the best stock brokers have eliminated flat-rate commissions for online stock and options trades, and just use a small fee for certain options traded.
The table below compares brokers based on the cost to buy or sell 10 options contracts. Options trading fee comparison for 10 contracts No-fee options trading used to be a pipe dream for investors, but that's no longer the case with the best options brokers slashing costs to attract and retain accounts. Exercise and assignment fees Brokers charge fees to buy or sell options, but some also charge fees if you want to exercise an option, or if an option you have sold is assigned. A few brokerages will charge you a fee to exercise your options and buy the underlying stock.
A few brokers will charge you an assignment fee for this transaction.
Best Options Trading Platforms
How to pick a broker for options trading. Open Account. FAQs What is the cheapest options broker? About the Author. Blue Twitter Icon Share this website with Twitter. Email Icon Share this website with email. Back to The Motley Fool.
What is Options trading
Robinhood Rating image, 4. Best For: Low fees. TradeStation Rating image, 4. Best For: Active traders. Our post about how to choose the best broker for you can help you sort through the features brokerage firms offer and rank your priorities. Learn More. Promotion None. View details. Pros Easy-to-use tools. Large investment selection.
Excellent customer support. Access to extensive research. Advanced mobile app. Commission-free stock, options and ETF trades.
Best Online Brokers for Options
Cons Website can be difficult to navigate. TD Ameritrade. Pros Commission-free stock, ETF and options trades. Free research. High-quality trading platforms. No account minimum. Good customer support. Cons No fractional shares.
Best Options Trading Platforms
Promotion One free stock. Why we like it Robinhood is truly free: There are no hidden costs here. Pros No account minimum. Streamlined interface. Cryptocurrency trading. Cons No retirement accounts.