Without any affiliation to any particular options broker, experience however suggests a few that are recommended by professional options traders:
- Think Or Swim (TOS). TOS has a great web platform i.e. that works just as well on Linux or MacOS than Windows. It just falls a little short of a comprehensive options analysis software (hence you’ll still need a spreadsheet to record your trades) but TOS is way better than other brokers than others below. Executions are good however a little more expensive.
TOS is a major broker in the USA, but since it was bought out by TD Ameritrade (2012), they unfortunately do no longer accept European customers.
- Interactive Brokers (IB). Also available on all environments, IB offers great liquidity and executions, but its TWS platform is difficult (stay away from the Mosaic mode!) when it comes to options trading. It is a general purpose broker hence it is important to set up the TWS specifically for options trading, as for instance like the screenshot below:
Other popular options brokers:
- TradeKing (TK). Never used.
- Tradier (fully integrated with OptionVue – US Clients only)
- OptionsXpress (OX). Never used.
- TradeMonster (TM). Never used.
An active options trader should not pay more than $1.5 per contract. Some add a small ticket charge for RUT or SPX, some don’t. As a guideline, pros pay around $0.50 per contract.
At Options Masters we take regulations seriously so we stay clear of anything related to actual trading. Note that brokers also have their educational centres to cater for tutorials webinars, etc. to prepare you for trading. Always keep in mind the Disclaimer below.
Does the Broker Platform waive the need for an options analysis software?
TOS does a very good job at it yet still falls short of software like OptionVue or Option Net Explorer when it comes to backtesting strategies and archiving trades.
Should you pay much attention to commissions and fees ?
Yes and … NO. A good trade will make money. Period. Also it is a lot more important to place orders and negotiate limit prices correctly around the mid. A commission of $1 per RUT contract, $2 to $2.5 per SPX contract is OK.