A Quick Guide to Buying Stock Options

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What are the Best Stock Trading Apps? Reviews and Comparisons

Years ago, investors would need to call a stockbroker over the phone to buy or sell stocks — with costly fees. Luckily, times have changed. You can still buy stocks with a phone, but instead of a call you can place trades yourself through an app. Due to a competitive environment, most fees have been slashed too. In this guide, we go over the best stock trading apps of 2020.

The Tokenist aims to bring you the most accurate, up-to-date, and helpful information when it comes to your finance. You work hard for your money — and we work hard for you. Some of the products and services we review are from our affiliate partners. Robinhood is one of our affiliate partners. In order to operate, The Tokenist may receive financial compensation from our affiliate partners when you purchase products, services, or create accounts through affiliate links on our website — even if that link takes you outside our website to Robinhood.com or their mobile app. Partnerships do not influence what we write, as all opinions are our own. Click here for an in-depth explanation on how we get paid.

Whether you decide to play the market as a bull or just want to buy and hold, stock trading apps have made investing extremely popular.

Over the past few years, online brokers have gone through a reboot, and now most of them have stock trading apps that cater to young, tech-savvy investors. There are also some new mobile-first stock trading apps that help you invest passively and set up a nest egg for you.

As more people get into investing online, it’s clear that firms want to be more mobile-friendly and cater to digital investor interests. The best stock trading apps offer easy-to-use features that make it quick and painless to start investing with your phone.

As the reliance on intuitive software and AI becomes more apparent in stock trading, it’s also imperative that traders pick an app that has the latest tools for assessing risk and real-time research data. Larry Hite, who built the first computerized trading system with commodities trader Ed Seykota, once said, “Throughout my financial career, I have continually witnessed examples of other people that I have known being ruined by a failure to respect risk. If you don’t take a hard look at risk, it will take you.”

In increasing numbers, online brokers want to streamline the experience for investors from mobile apps to desktop. Tools typically cater to placing orders, tracking stock trends, stock screeners, and alerts. Now that real-time streaming data has made it to mobile apps, investors also get access to charts and analytical data to make important decisions.

The Best Stock Trading Apps – My Reviews

Our guide walks you through the best stock trading apps based on usability, features, fees (or lack thereof), and trading technology. Here’s an overview:

  1. Robinhood – Best Free Stock Trading App
  2. Acorns – Best for Hands-Off Beginner Investors
  3. Stash – Best for Learning How to Invest
  4. TD Ameritrade – Most Comprehensive
  5. E*Trade – Best Large Firm with Simplicity

1. Robinhood – Best Free Stock Trading App

Robinhood launched in 2020, as a true pioneer of commission-free trading. That’s right — you can trade stocks on Robinhood without paying any fees at all.

The platform boasts over 10 million users and is valued at $7.6 billion. It’s known for a very simplified trading experience, without the hassle or the fees. Here are some Robinhood pros and cons:

Pros

  • Commission-free trades on stocks, options, and ETFs
  • No account minimum
  • Easy to use interface
  • Access to popular cryptocurrencies

Cons

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  • Lack of investment types — no retirement accounts, mutual funds, or bonds
  • Limited customer support

To demonstrate how committed Robinhood is to its app, the company actually launched its stock trading app prior to its own website. In becoming one of the first platforms to offer commission-free trading, Robinhood has disrupted the trading industry since it entered the market.

A complete Robinhood review shows more than just free stock trading, however. The app offers free ETF and options trading, too.

While Robinhood doesn’t offer as many investment types as some of the other apps on our list, it does offer cryptocurrencies. Investors can buy and sell seven major cryptocurrencies — including Bitcoin and Ethereum — and can track price movements of ten others.

Robinhood also facilitates fractional investing, meaning users can purchase a fraction of a share. In the case of a single stock trading at $325 for example, Robinhood investors can get a piece of the action with as little as $1.

The only other downfall with Robinhood is its limited customer support. There are no physical locations, and the primary form of ‘help’ is an automated chat bot. This became a big problem in March of 2020, when Robinhood suffered serious outages and is now facing a class-action lawsuit.

2. Acorns (“Invest Spare Change”): Best for Hands-Off Beginner Investors

Acorns is built for investors who don’t want to get too active and haven’t ever invested before. Together with round-up savings and robo-advisors, Acorns presents a very mobile-friendly option for investing your money into a nest egg that grows gradually.

Pros

  • Easy-to-use app with very little investment costs
  • $0 account minimum
  • Robo-advisor model made for beginners with no investment experience
  • Automatically invests spare change to grow your savings
  • Free management available for college students

Cons

  • Account fees ranging from $1 to $3 monthly
  • Small investment portfolio based on automated mutual funds

If you want hassle-free savings that simply invests your change, then Acorns is the right tool for you. You can easily open an account using your bank account, and Acorns tracks your purchases, investing your spare change every day into a low-risk portfolio.

Acorns charges $1 month for taxable investment accounts and $2 a month to add an IRA. If you get an Acorns checking account or Acorns Spend account, you’ll be charged $3 a month, which also includes an investment and IRA account.

Acorns is a great tool for college students and those who don’t want to actively look at their portfolio and make trades. It’s also a good idea for those who like to save.

One thing to understand is that your accounts are taxable, so if you receive dividends from your portfolio, you could have to pay taxes on your earnings, which isn’t the case if you get a tax exempt investment account. However, the automated approach is quite easy for those who simply want to grow their spare change.

The app – called “Invest Spare Change” – is available on both Android and iOS.

3. Stash – Best for Learning How to Invest

Stash is a great investing app for beginners. There is no account minimum, though monthly fees will range from $1 – $9 depending on the package you select. Here are the primary Stash pros and cons:

Pros

  • No account minimum
  • Fantastic automated guidance and educational offerings
  • Fractional shares, round-up investing, automated investing
  • Valued-based offerings for socially conscious investors

Cons

  • Lack of investment management and human guidance
  • No tax-loss harvesting
  • Fee ratio is relatively high when investing small amounts

The mission of Stash CEO Brandon Krieg was to build an educational investment app which made financial services accessible to all. No financial background or expertise was to be required.

We say they’ve done a pretty good job. Stash helps you understand what you’re investing in and how to implement various investing strategies.

The platform offers 60 different exchange-traded funds (ETFs). The service will prompt you to complete a questionnaire to get an idea of your “investment personality type”. Based on your answers, it will then categorize you as a conservative, moderate, or aggressive investor. You’ll then be able to choose from a number of investments which correspond to your investment personality type.

Through Stash, you can also build a custom portfolio with value-based investment options. For example, if you value renewable energy, you can invest in companies that are leading the developments in that sector. For socially conscious investors, it’s a win-win.

4. TD Ameritrade (thinkorswim) – Great Overall Stock Trading App

Since eliminating commission fees on trades, TD Ameritrade is hard to beat when it comes to stock trading apps and general brokerage features. With a variety of free education tools, options for active and passive traders, and a $0 account minimum, TD Ameritrade is winning over investors one free trade at a time.

Pros

  • No commissions on stocks, ETFs, and options trades
  • Free research and analytics tools
  • High-quality trading platform for mobile
  • Great customer support
  • Access to most investment products

Cons

  • Pushes you to get a live broker for an additional cost
  • High short-term fees for ETFs
  • High margin interest rates

While TD Ameritrade does not require a minimum investment to get started, it’s best known for being the first brokerage to eliminate all commission fees on stocks and ETFs in October 2020.

After doing so, most of the other brokerages had to do the same, including E*Trade and Fidelity. TD Ameritrade has built its name on providing market research and analysis tools with lots of advanced investment options for active traders.

With so many mobile apps, you will have to download multiple apps to get the full benefits of being a TD client. There are several mobile apps to choose from, but the standard TD Ameritrade app offers you the ability to conduct research and set up alerts, while the Mobile Trader app is for those who want to the powerful ‘thinkorswim’ platform. You can track and plan complex trades, and there’s a ton of functionality for iOS and Android users.

5. E*Trade – Easiest Broker App to Use for Trading

E*Trade was the first in the online investing platform market. With their roots in Silicon Valley and online exchange technology, the firm made a name for itself by offering online trading when there weren’t any other options.

Now, E*Trade has a mobile trading app and leads the pack in terms of advanced features. Since removing commission fees for stocks and ETFs, E*Trade is the easiest app to view your investments and seamlessly trade stocks on your phone.

Pros

  • No commissions for stocks and ETFs
  • Streaming strategy options chains is a great tool to make smart trades
  • For futures traders, E*Trade provides a mobile futures ladder tool
  • Assess your risk with performance tools that let you test your portfolio or just a single asset

Cons

  • Some features are not available in the regular mobile app, such as Power E*Trade app which provides more research tools
  • Fees slightly higher with certain investment products, and you have to have a higher trading frequency to qualify for lower commissions
  • Higher margin rates
  • Does not integrate with your bank

E*Trade has led the charge for faster, online trading tools with a host of educational features, too. The whole point is that it’s easier to use than traditional investment methods.

The truth is that E*Trade does have a pretty streamlined mobile app with most features available. Once logged in on your phone, you can access all of your investments or trade stocks, ETFs, mutual funds, and options. There are some more complex trade options if you are familiar with placing buy and sell orders yourself.

Most of E*Trade’s tools are easy to use, and you get high execution speeds for greater accuracy. However, price improvement statistics put them below the industry average.

In addition, there are some research tools not available on the regular E*Trade mobile app, so you may have to download their “Power E*Trade” app or the OptionsHouse app. There’s also a lack of customization options on the mobile app, but you can set up your own dashboard on desktop.

You cannot access the forex or international exchanges either, but you can build bond ladders and look for debt issued by a different firm. Options trading is better on Power E*Trade and E*Trade Pro, and there are 4,500 no-fee mutual funds available and 12 ETFs you can trade through the app. Charts and educational tools can be analyzed using TradeLab, which is a visual tool that helps you analyze different stocks.

E*Trade’s mobile trading apps are available on both Android (via Google Play) and iOS on the App Store.

How To Use Stock Trading Apps (Without Losing Your Shirt)

Ideally, when you’re looking at a stock trading app, you gain access to all investment assets available, but there are other features you should look out for including:

  • Access on all iOS and Android devices
  • Easy-to-use functionality
  • Management of all investments on your mobile phone
  • Access to buying and selling orders on your phone
  • Investment and banking account management via your phone
  • Fast and accurate trade execution
  • Mobile accessible research and education tools

How Much Money Do You Need to Get Started?

Most mobile apps like Acorns, Stash, and Robinhood require very little to get started. You typically have no account minimum to start investing.

However, the amount of money generally depends on what investment assets you want to buy. If you plan on trading in mutual funds, for example, you’ll need to have a minimum of $1,000 or more. However, ETFs can be purchased for much less.

You also want to consider the commission costs based on the brokerage firm you choose. While most of the major broker apps no longer charge commissions for stock trading and ETFs, some start at $5 per trade and go up from there.

Choose a Trading App Based on Your Investment Personality

How do you like to invest? If you want to bank and invest all in one, then you can look at apps like Charles Schwab to offer more advantages. However, active traders may be more interested in TradeStation or Interactive Brokers.

E*Trade and TD Ameritrade offer the most educational tools and have access to the most investment asset options. Both of these companies also have robust mobile trading apps and research tools. If you plan to make solid investments and like to follow trends, these apps have a lot of extras for the value.

Use an App with Virtual Money First

If you aren’t sure how stock trading works, you may want to check out TradeHero or Stash to get started. These apps help you learn with a fake portfolio so you aren’t spending money to test out strategies.

These are simulators who use real-time data to show you whether your investments will earn a profit and give you confidence in your investing without spending any money.

Don’t Buy Too Many Shares Your First Time — No Matter What They “Recommend”

It’s best to start slowly and build your risk. If you get too gung-ho when buying stocks, you will likely experience unnecessary losses. Instead, you can trade with a small position and work your way up to buying more shares as your position gets better.

Warren Buffett also said that it was better for individual investors to passively invest through the “buy and hold” strategy instead of trying to trade stocks on their own. It also cuts down on your trading costs.

Security Problems with Stock Trading Apps

A report came out in 2020 that many stock trading apps have security holes. Many vulnerabilities were found that exposed accounts to hackers who could steal money, sell off stocks, and get into personal details of the user’s accounts.

About 19 percent of the stock trading apps also exposed user passwords in clear text. Other apps did not even verify the SSL certificate (the little ��lock icon in your browser that tells you a website is safe and secure).. It’s best to check the app’s security beforehand by checking customer reviews, looking at any “data breach” news, and checking if they have two-factor authentication.

Call Customer Service Before Investing

Most mobile applications today have terrible customer service. Yes, things have gotten a lot better since the days of waiting on hold for several hours, but the truth is that we have a long way to go.

And that couldn’t be more true when it comes to customer support people running the show at investing and trading apps.

While reviewing each of the above apps, I asked myself the following questions:

  • How easy was it to talk to someone when I had a problem? Some apps do not have phone support, while others have chat support but it’s only available on the desktop application instead.
  • When I called the customer service phone support number, were they quick to help me?
  • How long does it take to speak to a representative?

Mobile trading apps should make it easy for you to get help with their app, check on your account, and security services even if they do not provide you with a live broker.

Wrapping Up: Which is the Best Stock Trading App For You?

Once you decide what investment style you want to go with, there are a number of stock trading apps on the market.

Whether you want all of the options available or you want a totally hands-off stock investment experience, you should consider costs, fees, security, mobile experience, and customer service before opening a brokerage account via your mobile phone.

For those who want a wide range of options, we like Acorns, Robinhood, and Stash for their ease of use, simplicity, and low or lack of fees. TD Ameritrade and E*Trade are also great options, with a wide range of investment types offered.

About Author

Tim Fries Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim is also the co-founder of Protective Technologies Capital ( protechcap . com ).

A Quick Guide to Buying Land

Whether you crave the seclusion of country acres or a quaint residential lot in a subdivision, buying a piece of land is a bit different than buying a house.

Whether you’re buying land as an investment or for residential use, ask yourself the following questions before making any decisions.

What are the zoning rules and long-term plans?

Nothing bulldozes plans like zoning issues, so before you buy land, pay a visit to the county zoning and planning office.

Look at the long-range general use plan for the area surrounding the lot, which will outline permissible use of the land and what the future holds for the immediate area.

If you intend to build a home, look for things such as a future plans for a landfill or power plant in the area that may affect your home’s value and your family’s lifestyle.

Have you ever driven down a major highway and wondered why anyone would build a home so close to it? Chances are the house was built before the highway, and the homeowners had no idea it was in their future.

If you can’t decipher the general use plan enough to tell whether road improvements or highways are planned, ask one of the county planners for assistance.

Are there deed restrictions?

If a homeowners association governs the land, you’ll need to follow their restrictions in addition to whatever zoning rules apply. Read the Covenants, Conditions and Restrictions (CC&Rs) carefully. These documents outline what you can and can’t do with your property. If you have any questions about the CC&Rs, consult your attorney, as it’s vital that you understand everything in them.

Are you buying land with easy access?

How will you get to the property? If it’s on a main public road, you’ll likely have no problem.

Many times, especially in rural areas, the only access to a piece of land is over someone else’s property. Without what is known as an “easement,” your property is considered landlocked. Ensure that a right-of-way easement is granted, in writing, before you agree to buy the land.

Additionally, if there is no existing road to the property, you’ll need to factor the cost of building one into the purchase price.

Are there utilities?

In larger planned developments, the builder generally brings utilities, such as water, natural gas and electricity, to the lots. With country property, however, buyers may need to secure the utilities and sewage system, which sometimes requires taking on the cost of drilling a well or installing a septic system.

Get bids on any work that needs to be performed before you sign a purchase agreement, or have your real estate agent make your agreement contingent upon your acceptance of the bids.

How will you finance your land purchase?

If you’re buying raw land — without any utilities or streets — the lender will generally ask for a 20% to 50% down payment, and you will likely have a higher interest rate.

Not all lenders handle vacant land loans, so it may be a bit of a challenge to finance your purchase. Many sellers offer financing. If not, try local banks or credit unions.

One of the biggest mistakes residential land buyers make is failing to consider the cost of developing the land when applying for a loan. So get all the bids required in advance of seeing a lender.

How to Trade Options

Melissa Brock
Contributor, Benzinga

Invest With TD Ameritrade – Now Commission Free

Invest With TD Ameritrade – Now Commission Free

Open an account with Benzinga’s best online broker, TD Ameritrade. $0 commissions on online stock, ETF, and option trades plus award-winning platform and customer service.

What are Options?

An option is a contract to buy or sell a stock, usually 100 shares of the stock per contract, at a pre-negotiated price (also called the “strike price”) and by a certain date (also called the “exercise date”). Read on to learn how to trade options.

Table of contents [ Hide ]

Elements in Options Trades

You must decide, in an options trade, the following:

  • Which direction is the stock going to move?
  • How high or low will the stock price move from its current price?
  • How will the stock move during a particular time frame?

Types of Options Trades

There are two types of options you can buy or sell: call option and a put option.

Call option

This option allows the buyer to buy the contract at the specified price on or before the expiry date and is exercised by the buyer when the market goes above the strike price. Within the call option, there are two possibilities:

  • Buy call: The buyer will buy the contract as it would yield maximum profits and limited loss, which is equivalent to the premium paid to the seller initially.
  • Sell call: It is the obligation of the seller to sell when the buyer exercises his/her call option.

Put option

The buyer can sell the contract at the specified price when the market price moves below the strike price. Within the put option, there are a couple of possibilities:

  • Buy put: The buyer has the right to sell the contract when he/she thinks the prices will fall. He/she can sell the contract at his/her own will.
  • Sell put: The seller has the obligation to buy the contract. The seller enters in such a contract anticipating earnings.
Options

Understand the Risks of Options Trading

Options can be purchased speculatively or as a hedge against losses. Speculative purchases allow for the potential to make a lot of money, but only if traders can correctly predict the magnitude, timing and direction of the underlying securities’ price movement. Doing this incorrectly can result in large losses and high trade commissions. Novice traders, beware.

Options Trading Terminology

If you’re a new options trader, you’ll quickly realize there are lots of new, potentially bewildering terms. These terms also include some already covered (it’s important to review!):

  • Holder: A trader who has bought an option.
  • Writer: A trader who has sold an option.
  • Strike price: The price at which the asset will be bought or sold.
  • Expiration date: The already-agreed upon date by which the option owner must exercise his right to buy or sell the underlying security. After this date, the option expires.
  • In the money: The market price of the asset is higher than the strike price (in the case of a call) or lower than the strike price (in the case of a put).
  • Out of the money: The market price of the asset is lower than the strike price (in the case of a call) or higher than the strike (in the case of a put).

Choose a Broker

Low commissions are just the tip of the iceberg when it comes to choosing the best broker for options. Traders need to consider hidden fees, such as platform fees and data fees. Different traders have different skill levels, trading strategies and needs.

Options trading can be complicated, and beginners need to make sure to find a platform with plenty of educational resources and guidance. Advanced traders need to look for professional-grade features and research. Check out some of our favorite online stock brokers below.

eOption
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1 Minute Review

eOption is a stock, fund and option trading platform that focuses on low-cost options trading. Its options trading is very affordable at just $0.10 per contract and $1.99 per transaction. The broker also offers a comprehensive options trading course that’s free and educational for both novice investors and advanced traders alike. eOption’s platform is less usable than its competitors, especially for new traders.

Futures and forex trades aren’t currently available, daily market updates are full of jargon and the platform includes very few intuitive features and explainers. Customer service options are also lackluster, and mutual fund transactions are expensive. While eOption might be a great choice for options traders, we recommend other platforms for beginner traders primarily interested in stock and ETF investing.

Best For
  • Options traders looking for low-cost options contracts
  • Beginner and advanced traders looking for options education
  • Advanced traders who don’t need a lot of platform guidance
  • Unbeatable options contracts pricing
  • Mobile app that mirrors capabilities of desktop app
  • Free and comprehensive options education
  • Confusing platform has limited assistance tools
  • Expensive mutual funds and bond trading
  • Limited stock and general investing education
  • Lackluster customer service options
eTrade
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1 Minute Review

E*TRADE is an online discount trading house that offers brokerage and banking services to individuals and businesses. One of the first brokers to embrace online trading, E*TRADE not only survived both the dot-com bubble and Recession — it thrived. You can choose from two different platforms (one basic, one advanced). E*TRADE is a suitable broker for traders of most skill levels, whether you want to buy mutual funds and hold them for decades or dabble in options swing trading. E*TRADE offers a library of research and education materials to help you out.

Best For
  • Active traders
  • Derivatives traders
  • Retirement savers
  • Sophisticated trading platforms
  • Wide range of tradable assets
  • Exceptional customer service
  • Limited currency trading
  • Higher margin rates than competitors
  • No paper trading on its standard platform
TD Ameritrade
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1 Minute Review

This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.

Best For
  • Novice investors
  • Retirement savers
  • Day traders
  • World-class trading platforms
  • Detailed research reports and Education Center
  • Assets ranging from stocks and ETFs to derivatives like futures and options
  • Thinkorswim can be overwhelming to inexperienced traders
  • Derivatives trading more costly than some competitors
  • Expensive margin rates
TradeStation
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1 Minute Review

TradeStation is for advanced traders who need a comprehensive platform. The brokerage offers an impressive range of investable assets as frequent and professional traders appreciate its wide range of analysis tools. TradeStation’s app is also equally effective, offering full platform capabilities.

Best For
  • Advanced traders
  • Options and futures traders
  • Active stock traders
  • Comprehensive trading platform and professional-grade tools
  • Wide range of tradable securities
  • Fully-operational mobile app
  • Confusing pricing structure to leave new traders with a weak understanding of what they pay
  • Cluttered layout to make navigating TradeStation’s platform more difficult than it should be
Robinhood
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1 Minute Review

Robinhood is the broker for traders who want a simple, easy-to-understand layout without all the bells and whistles other brokers offer. Though its trading options and account types are limited, even an absolute beginner can quickly master Robinhood’s intuitive and streamlined platform. On the other hand, more advanced traders might be frustrated by Robinhood’s lack of technical analysis tools, a feature that’s now nearly universal across other platforms.

Best For
  • Beginner traders
  • Mobile traders
  • Streamlined, easy-to-understand interface
  • Mobile app with full capabilities
  • Can buy and sell cryptocurrency
  • Almost no trading analysis tools available
  • Only taxable brokerage accounts available
  • No option to open a retirement account
  • No access to mutual funds, forex or futures trading
  • Limited customer service
Firstrade
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1 Minute Review

Easy-to-use and quick to master, Firstrade offers new and veteran traders alike a simple way to start investing with rock-bottom pricing. Firstrade’s platform is simple and streamlined, and it extends this convenience to its mobile app. The company’s $0 commissions on stocks, ETFs, mutual funds and even options make Firstrade especially appealing for frequent traders. Firstrade also offers margin trading, though rates are a bit more expensive than some competitors. Firstrade also currently doesn’t offer access to futures or forex trading, and some more advanced traders may dislike the broker’s simple platform.

Best For
  • New traders looking for a simple platform layout
  • Native Chinese speakers seeking research and education tools in Chinese
  • Mobile traders who needs a secure and well-designed app
  • Simple platform easy enough for even complete novices
  • Quick Bar tool for easy trading throughout the day
  • Free access to Morningstar trading reports and other news in both English and Chinese
  • Secure mobile app with enhanced security and trading features
  • Simple brokerage platform doesn’t include as many charting tools as competitors
  • No access to futures or forex markets
Interactive Brokers
Commissions
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Commissions
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1 Minute Review

Interactive Brokers (IBKR) is a comprehensive trading platform that gives you access to a massive range of securities at affordable prices. With access to over 125 global markets, you can buy assets from all around the world from the comfort of your home or office. Options, futures, forex and fund trading are also available — and most traders won’t pay a commission on any purchase or sale. IBKR is geared primarily toward experienced investors. The platform offers limited assistance and can be a challenge for new users to become acclimated to. The broker’s tiered pricing strategy can also be frustrating for traders who focus on hourly or daily price movements.

Best For
  • Access to foreign markets
  • Comprehensive mobile app that makes trading simple
  • Wide range of available account types and tradable assets
  • Comprehensive, quick desktop platform
  • Mobile app mirrors full capabilities of desktop version
  • Access to massive range of tradable assets
  • Frustrating and confusing tiered pricing
  • Bloated website that makes finding information a challenge

Before choosing the right broker , each trader needs to consider his or her trading style and which features are most important in maximizing profitability. In addition, be sure to avoid scam trading sites and platforms.

Getting approval from your broker

Brokerage houses will have to give you permission to trade options; they set limits based on how much money and experience you have before they’ll allow you to trade.

Paper Trading for Options

Paper trading is an important step for anyone serious about making a profit in the options market. It’s a way for beginning traders to perfect a trading plan before trading with real money.

That said, paper trading cannot be approached lightly! It’s possible for new options traders to not take fake money seriously, so they experiment in ways they might not with real money. Therefore, it’s possible for two things to happen:

  • They win irresponsibly, believe the market is easy, throw in real money and lose it all.
  • They lose irresponsibly, believe the market is a scam, and never try again.

It’s important to treat paper trading as if it’s real money, but some traders argue that paper trading can never replace the emotions you’ll experience when you’re using your own money.

Advanced Trading Options

Once you’re familiar with the ins and outs of limit orders and execution prices, you’ll likely be ready for advanced trading options. In addition, you’ll be experienced enough to know to reevaluate your strategy periodically, learn from your mistakes and also, your successes. There are other, more advanced trading strategies you can look into, including:

  • Straddle options: These provide equal profit potential on either side of an underlying price movement.
  • Strip options: These are a market neutral bearish strategy and it provides double the profit potential on downward price movement compared to equivalent upward price move.
  • The Greeks: Metrics, including delta, gamma, theta and vega, that advanced options traders use. These are only a few advanced terms; there are so many more that encapsulate all there is to the complex world of trading options.

Learn More About Options Trading

More complex than trading stocks, it’s necessary to educate yourself. Take classes, pay attention to forums and blogs, watch tutorial videos and download books on trading.

Track the news and know what’s going on in the world economy, and finally, talk to a real trader and ask him/her for guidance.

Seek a mentor through your brokerage firm for guidance if you’re a beginner options trader. It’ll be instrumental to your success as a trader, as there is lots of misinformation online. Many brokers have thorough education on options education. It’s complicated, so you shouldn’t go it alone. For more information and further education, visit the official website of the Options Clearing Corporation , or OCC.

If you want to take a deeper dive into options trading and strategy, we always recommend reading a great options book or taking a class from the pros – like Market Rebellion’s professional trading courses.

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