Best Broker for Options Trading

Options Commissions Compared

Options pricing has two components: a base fee (per trade) and a per-contract fee. Most brokers have eliminated base fees, so per-contract fees are what matters. Here's the current landscape:

Understanding the True Cost

The per-contract fee is straightforward, but it's not the whole story. Execution quality matters too—a broker that saves you $0.02 per contract but gives you $0.05 worse fills on each leg costs you more overall.

Fidelity and Interactive Brokers are known for excellent execution quality. Robinhood and other free brokers rely heavily on payment for order flow (PFOF), which can mean slightly worse fills. For small traders, the difference is minimal. For active traders doing hundreds of contracts, it adds up.

Options Platform Quality

The trading platform matters enormously for options. You need to quickly analyze chains, model strategies, and execute multi-leg orders. Here's how the major platforms stack up:

Schwab thinkorswim: The Gold Standard

Originally from TD Ameritrade, thinkorswim is widely considered the best options platform available to retail traders. Its strengths include:

• Analysis tools: Probability calculations, Greeks, theoretical pricing
• Strategy builder: Visualize any multi-leg strategy
• Risk profiles: See P&L at any price at expiration
• Charting: Hundreds of indicators and drawing tools
• Paper trading: Practice with fake money
• thinkScript: Custom indicator programming

The downside: thinkorswim has a steep learning curve. It's powerful but overwhelming for beginners. If you're new to options, simpler platforms might be better to start.

Tastytrade: Built for Options

Tastytrade was founded by Tom Sosnoff, who previously created thinkorswim. The platform is designed specifically for options traders:

• Trade Page: Streamlined interface for quick execution
• Follow feed: See what other traders are doing
• Curve analysis: Built-in probability tools
• Quick roll: Easy position management
• Educational content: Extensive free education

Tastytrade is faster and more intuitive than thinkorswim for pure options trading, though it lacks some of thinkorswim's depth in charting and research.

Robinhood: Simple but Limited

Robinhood's options interface is clean and mobile-friendly. You can trade basic strategies easily. But it lacks:

• Advanced Greeks analysis
• Strategy modeling
• Probability calculations
• Complex multi-leg order types

For beginners buying calls and puts, Robinhood works fine. For sophisticated strategies, look elsewhere.

Options Approval Levels

Brokers require approval to trade options, typically in levels based on your experience and financial situation:

Typical Approval Levels

• Level 1: Covered calls, cash-secured puts
• Level 2: Buying calls and puts
• Level 3: Spreads (debit and credit)
• Level 4: Naked calls and puts (high risk)

Easiest Approval

Robinhood and Webull are known for relatively easy options approval—sometimes too easy, critics argue, given the risks. You can often get Level 2-3 approval quickly based on self-reported experience.

Stricter Approval

Fidelity and Schwab have more thorough approval processes. They want to see actual trading experience and financial resources before approving advanced strategies. This is arguably better for protecting inexperienced traders, but frustrating if you're experienced and switching brokers.

Best Broker by Strategy

Selling Premium (Covered Calls, Cash-Secured Puts, Spreads)

Winner: Tastytrade

Tastytrade's platform is designed for premium sellers. The $1 to open, $0 to close structure rewards high-volume traders. The curve analysis tools help identify high-probability trades. Educational content focuses heavily on selling strategies.

Active Day Trading Options

Winner: Interactive Brokers

For high-frequency options trading, IBKR's Pro platform offers the fastest execution and lowest costs at scale. Volume-based pricing can bring per-contract costs under $0.25. Direct market access and sophisticated order types give you an edge.

Casual Options Buying

Winner: Robinhood

If you're buying the occasional call or put to speculate on a stock move, Robinhood's free options and simple interface work well. You're not paying $0.65 per contract for something you do a few times a month.

Learning Options

Winner: Schwab (thinkorswim)

The paper trading feature lets you practice with fake money using real market data. The educational resources are comprehensive. And when you're ready for real trading, you're already on a professional-grade platform.

Options Assignment and Exercise

Different brokers handle assignment fees and exercise differently:

• Fidelity: No assignment or exercise fee
• Schwab: No assignment or exercise fee
• Interactive Brokers: $0 exercise, $0 assignment
• Robinhood: No fee, but auto-exercise can be confusing for beginners
• Tastytrade: No fee

Most brokers now offer free exercise and assignment. If your broker still charges, that's a red flag.

Options on Futures

If you trade options on futures (like /ES, /NQ, or /CL options), your broker choices narrow:

• Tastytrade: $2.50/contract for futures options, excellent platform
• Interactive Brokers: Competitive rates, global futures access
• Schwab: thinkorswim handles futures options well

Robinhood, Webull, and Public don't offer futures options. If you need them, you need a broker that supports them.

Our Recommendations

Best Overall: Tastytrade

The combination of options-focused platform, reasonable pricing ($1 to open, $0 to close, capped at $10/leg), and extensive education makes Tastytrade the best choice for serious options traders. The platform is fast, intuitive, and designed specifically for how options traders think.

Best Platform: Schwab (thinkorswim)

If platform capability is your priority, thinkorswim remains unmatched. The $0.65 per contract cost is reasonable, and you get the most powerful analysis tools available. Ideal for traders who want to deeply analyze positions.

Best Free: Robinhood

For occasional options trades where you don't need sophisticated tools, Robinhood's $0 pricing can't be beat. Just understand you're trading platform quality for cost savings.

Best Execution: Fidelity

Fidelity's no-PFOF model means your orders aren't being sold to market makers. For larger orders where execution quality matters, Fidelity often delivers better fills that offset the $0.65 per-contract fee.

The Bottom Line

The best options broker depends on your trading style, volume, and needs. For most options traders, Tastytrade offers the best combination of platform quality and reasonable pricing. Beginners can start with Robinhood's free options, then graduate to more sophisticated platforms as they develop.

Whatever broker you choose, remember that platform and execution quality matter more than saving a few cents per contract. A powerful platform helps you find better trades; good execution helps you enter and exit at better prices. Don't sacrifice either for minimal fee savings.