Choosing the best option trading platform is essential for options traders. The three best-rated platforms are TastyWorks, Interactive Brokers, and TD Ameritrade. All three platforms offer high-quality features, but there are some key differences.
So if you are looking to trade options and looking for the best platform you want to ask some key questions.
How financially stable is the brokerage and will it still be around during a crisis or market collapse?
What are the commissions and fees? Are they competitive with the industry?
Does the brokerage offer training and education?
What tools are available and are they easy to use?
Are the trades filled fast at good prices?
Is customer service responsive?
One way to figure out which platform is best for you is to try them all out! Or you can stay tuned for the comparisons we are going to cover to see which one might be best for you.
So let’s start with discussing the financial stability of the brokerages.
When it comes to financial stability, Tastyworks is a member of the Securities Investor Protection Corporation (“SIPC”). Therefore, funds are available to meet customer claims up to $500,000, which includes a maximum of $250,000 for cash claims.
Tastyworks is also TastyWorks is regulated by Financial Industry Regulatory Authority (FINRA) regulatory bodies.
Regulated brokers are highly unlikely to manipulate market prices due to the regulations imposed. When you send in a withdrawal request to Tastyworks, this will be honored. If TastyWorks violate any regulatory rules their regulated status could be stripped.
Interactive Brokers is also financially stable, FINRA and SIPC insured, and regulated. They are a large company with over $10 billion in assets.
TD Ameritrade is also financially stable and insured through SIPC. They are one of the largest online brokerages with over 13 million customers and client assets worth over $1.3 trillion.
What are the commissions and fees?
When it comes to commissions and fees all three platforms are competitive.
Tastyworks charges $1 per contract and $0 to close.
Interactive Brokers charges a flat rate of $0.005 per share with a $1 minimum and no commission on closing trades.
TD Ameritrade charges $0.75 per contract with a $3 minimum or you can buy and sell stocks and ETF’s for free.
All 3 brokerages are competitive. However, Tastyworks does stand out above the others as the number of trade lots is increased.
Does the brokerage offer training and education?
All three brokerages offer a variety of training and education. Tastyworks has a sister website Tastytrade.com which has live shows all day from before the market opens until after the market closes. Tastytrade has a Learn Center where educational videos are categorized by topic.
Interactive Brokers offers Trader TV, which is a video content library with interviews, analysis, and features of interest to active traders. They also have an extensive education center with their Traders Academy that goes into great detail on topics related to trading.
TD Ameritrade offers one of the most comprehensive trading academies in the business. They have video courses, articles, webinars, and a practice trading platform.
Are the trades filled fast at good prices?
These are the “Big Guys” so all three brokerages offer good prices on their trades.
Tastyworks will get your order filled as soon as it is available. They route your order to the exchange that will provide the best price. They claim to be the fastest although I believe the others do as well.
Interactive Brokers fill orders immediately and guarantee the best possible price.
TD Ameritrade also routes your order to get you the best possible price and they guarantee it.
What tools are available and are they easy to use?
All three brokerages offer streaming quotes, watchlists, charting, and news. They all offer the ability to trade options, stocks, ETF’s, and futures.
With Tastyworks, you can customize the platform to fit your trading style. You can also trade from pre-defined layouts or create your own. The layout is very easy to use and makes trading very simple.
Interactive Brokers offers a customizable platform as well. You can drag and drop the tools you want on to the platform and change the colors to fit your preference.
TD Ameritrade has 3 platforms to choose from and they are all very user-friendly. The most popular is the thinkorswim platform, which was designed for active traders.
Overall, all three brokerages offer great tools that are easy to use.
How are the brokerages customer service and support?
All three brokerages have excellent customer service and support. They are available by phone, email, or chat.
Interactive Brokers and TD Ameritrade offer 24/7 customer service while Tastyworks is available from 8am to 4pm CST.
Unbelievably, the owner Tom Sosnoff is open to emails and always responds right away within 24 hours. I have personally emailed him several times and he has gotten right back to me. As Tastyworks grows I don’t know that he will be able to keep this up.
In Conclusion
So there you have it. When it comes to the best option trading platform, Tastyworks comes out on top. They offer low commissions, a customizable trading platform, and a variety of educational resources. Interactive Brokers and TD Ameritrade are close behind, with Interactive Brokers offering more features for experienced traders and TD Ameritrade being better for traders who want a more traditional brokerage. All three brokerages offer excellent customer service and support.
However, the very personalized live trading that one can watch on Trastytrade.com is a huge benefit with Tastyworks. The training and feel that you receive from watching them daily is irreplaceable. You can also even duplicate their trades if they seem like a good trade for you!
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Let me know which platform you are using and why in the comments!