TradeStation (Best Low-Cost Options Brokerage)
Options Per-trade plan: $5 base + $0.50 per contract.
Options Per-contract plan: $0 base + $1.00 per contract.
Minimum to open: $5,000 for non-daytraders; $25,000 for daytraders; $5,500 for IRA accounts.
TradeStation is one of the
Barron's top 5 brokers in the category "Best for Options Traders". The broker offers low options
trading cost in two different pricing plans - per-contract and per-trade - which traders can switch between.
TradeStation's trading platform is highly customizable and is rated one of the best in the industry. It includes very fast and
intuitive options trading platform, called OptionStation Pro. The OptionStation Pro is designed by options traders, offers numerous
powerful scanning and search tools, analysis features for the options market, tools for fast order executions, and even advanced
real-time risk management capabilities.
TradeStation Advantages
- Great commissions for frequent traders
- Excellent education amenities
- Powerful trading platform and research tools
- A diverse array of investments
- Trader community
- Virtual trading
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Ally Invest (Top Low-Cost Options Brokerage)
Options commissions: $3.95 + $0.50 per contract for anyone making 30 trades in the last 90 days or $100K account balance ($4.95 + $0.65 per contract for others)
Minimum to open: $0 for a cash account, $0 for an IRA.
Ally Invest is another company from the Barron's "Best for Options Traders" category.
"Ally Invest offers great value, especially for those who trade options spreads,"
Barron's said in its review.
The firm provides one of the lowest options commissions among major online brokers in the country.
Ally Invest Live is a customizable trading platform offered by the broker. It allows investors to trade complex options.
Extensive educational materials - articles, charts, videos, tutorials and even live events - are available at no charge for options
traders of all levels. Access to a free third-party research is another great advantage of low-priced Ally Invest.
Ally Invest Advantages
- Very low commissions
- Excellent customer support via email, phone and chat
- Customizable trading platform
- Free dividend reinvestment plans (whole and fractional shares)
- Free real time streaming quotes for active traders
- Free access to MarketGrader's research reports
- Extensive educational resources
- Great online banking rates
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The Basic Concept of the Options Trading
The lack of understanding of the idea of leverage often creates a strong belief for many investors that options are riskier
investments than stocks. However, if used wisely, options are less risky than a similar position in a stock. After all,
options were originally created as a risk management tool, but it can also be used as a speculation and an income tool.
There are plenty of options strategies. Some of them are more conservative than others and can even be used by investors
in their retirement accounts.
Types Of Options and Basic Options Strategies
Options are sold in contracts, and the price of an options contract is called the premium. Options are also priced
at a fraction of the price of the stock. There are two kinds of options - calls and puts.
Call options act very much like a stock. If a stock goes up, the value of the call will generally increase with the price
of the stock. If investors think that prices are going to drop, there are put options, which generally move in the opposite
direction of the price of a stock. Usually, when a trader buys a call or a put, he is speculating on a stock price.
It allows investors to potentially profit from a stock price movement with a small initial investment for the options contract.
Income-oriented traders can use options to create an income as options allow investors to trade in any market conditions -
up, down and even sideways markets.
Trading Options Requires Approval
Trading options requires a brokerage firm's approval. There are different approval levels in trading options.
The higher the level the more complex the strategy and the higher the risk that it carries. Investors can apply for options
trading privilege or ask for an upgrade of a current options approval level through their online account by providing
their financial information, options investment objectives and level of experience in trading options.
Lowest Price Options Trading
Low-cost options commissions do not always mean poor trading tools or low quality service. All brokerages above offer cheapest fees
for options traders and at the same time provide sophisticated trading platforms and numerous powerful trading tools designed
specifically for options traders.
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