Best options trading platforms and brokers in 2022

tastyworks is a young, up-and-coming US broker focusing on options trading. It is regulated by the top-tier Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and the Australian Securities and Investments Commission (ASIC) for Australian clients.

The people behind tastyworks are the same experts who built the thinkorswim trading platform, now operated by TD Ameritrade. tastyworks is privately owned; it was established in 2017 and is headquartered in Chicago.

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#1 tastyworks
Options fees

3.8

The options fees at tastyworks are generally low.

#1 tastyworks
Options market coverage

tastyworks provides access to 8 options markets.

#1 tastyworks
Desktop trading platform

3.9

The desktop platform is very similar to the web trading platform and has extra features such as good customizability. On the other hand, it is likewise not well suited for beginners.

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#1 tastyworks
Research

5.0

tastyworks's research tools include trading ideas, a great desktop charting tool and high-quality news. However, it's all very options-focused, and offers only limited fundamental data.

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Interactive Brokers, one of the biggest US-based discount brokers, was founded in 1977. The broker is regulated by several financial authorities globally, including top-tier ones like the UK's Financial Conduct Authority (FCA) and the US Securities and Exchange Commission (SEC).

Given that the broker has licenses from multiple top-tier regulators, has a long track record and publicly disclosed financials while being listed on a stock exchange; it all points towards IB being a safe service provider.

Interactive Brokers recently launched a new app for global stock trading: read our review of IBKR GlobalTrader.

In addition, Interactive Brokers also has an app you can use for ESG investing: read our review of IMPACT by Interactive Brokers.

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#2 Interactive Brokers
Options fees

3.4

The options fees at Interactive Brokers are generally average.

#2 Interactive Brokers
Options market coverage

Interactive Brokers provides access to 34 options markets.

#2 Interactive Brokers
Desktop trading platform

3.8

IB's desktop platform, TWS comes with great customizability and advanced order execution, but it's not user-friendly and caters more to advanced traders.

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#2 Interactive Brokers
Research

4.3

Interactive Brokers has almost limitless research possibilities, but the user interface is not the most user-friendly.

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Fidelity is a US stockbroker founded in 1946. It is regulated by top-tier authorities like the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Fidelity is considered safe because it has a long track record and is regulated by top-tier financial authorities.

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#3 Fidelity
Options fees

3.6

The options fees at Fidelity are generally low.

#3 Fidelity
Options market coverage

Fidelity provides access to 9 options markets.

#3 Fidelity
Desktop trading platform

4.3

Fidelity's desktop platform is highly customizable, offers many order types and has a clear fee report.

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#3 Fidelity
Research

4.4

Fidelity has great research tools with a large variety of services, including trading ideas, detailed fundamental data and great screeners. However, the quality of the news flow could be better.

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If you are an experienced trader looking for solid research and a well-equipped desktop trading platform, we definitely recommend TD Ameritrade.

Founded in 1975, TD is one of the biggest US-based stockbrokers and is regulated by top-tier authorities like the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and the Commodity Futures Trading Commission (CFTC).

This online broker is considered safe as it has a long track record, is listed on a stock exchange, has a banking background, discloses its financials and is overseen by top-tier regulators.

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#4 TD Ameritrade
Options fees

3.6

The options fees at TD Ameritrade are generally low.

#4 TD Ameritrade
Options market coverage

TD Ameritrade provides access to 8 options markets.

#4 TD Ameritrade
Desktop trading platform

4.5

The 'thinkorswim' desktop platform is one of the best on the market, we really liked it. The only feature we missed was two-step authentication.

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#4 TD Ameritrade
Research

5.0

TD Ameritrade has great research tools, including trading ideas and detailed fundamental data.

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Webull is a US-based fintech startup offering zero-fee or discount brokerage services. Founded in 2017, the company is regulated by the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) as well as the Hong Kong Securities and Futures Commission (SFC).

Check out our Webull review tailored to the needs of beginner investors and traders.

Webull is regulated by top-tier financial authorities and provides a maximum of $500,000 in investor protection, including a $250,000 limit for cash under the Securities Investor Protection Corporation's (SIPC) protection scheme, which are all great signs for its safety.

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#5 Webull
Options fees

5.0

The options fees at Webull are generally low.

#5 Webull
Options market coverage

Webull provides access to 6 options markets.

#5 Webull
Desktop trading platform

5.0

Webull's desktop trading platform has the exact same functionalities and design as the web trading platform.

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#5 Webull
Research

4.5

Webull offers easy-to-use research tools, including great recommendations and fundamental data. We would have loved to see more analytic tools, such as an economic calendar.

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Trading with options may seem like a difficult task, but knowing a few key points can help you to better understand how it works. Choosing an options trading platform based on the most important criteria will also help you to gain some crucial trading experience.

How did we pick the best options trading platforms?

When selecting the best options trading platforms in 2022, we ranked brokers along more than 300 criteria. In order not to overwhelm you, here are just the four most important criteria we considered.

Brokerage fees for options trading

How can I trade while wasting as little money as possible on fees? We bet this is on your mind most when selecting the best options broker. Let's see how we checked the fees of the various brokers.

It's tough to compare options trading platform fees, but we're here to help. You need to look at two types of fees: trading-related fees and non-trading fees.

Usually, brokers charge a per-contract commission for each trade. To show you how this works for each broker, we calculated all fees for some real-life scenarios. This way, you can compare the fees for different brokers. We looked at:

• US stock index options

• UK stock index options

• German stock index options

Our calculations were based on the commission fees for 10 contracts traded. We also used this formula to make the brokers comparable.

What are options?

Options belong to a group of products called derivatives. A derivative's price is dependent on or derived from the price of something else. You can buy options contracts in various asset classes, such as equities, indexes, bonds and commodities, among others.

A financial option is a contractual agreement between two parties. An option gives the buyer the right to buy (in the case of a call option) or sell (put option) the underlying asset at a specific price when or before the option expires. Options grant the owner rights, and create the seller obligations. Here are the key definitions to understand the different option types:

• Call option: This gives the owner the right to buy a specific amount of the underlying asset at a specific price by a predetermined date. A call option provides the opportunity to profit from price gains at a fraction of the cost of owning the asset. This also creates the seller the obligation to give you the asset at the pre-agreed price.
• Put option: This gives the owner the right to sell a specific amount of the underlying asset at a given price by a specific date. Here, the entity you bought the option from has the obligation to buy the underlying asset at the agreed price. For example, if you own put options on Apple shares that you own, and the price of the stock is going down, the put option is increasing in value. So, if the specific price agreed in the option is e.g. $450, but Apple shares are now worth $400, then you are in a winning position of $50 per share.

Options differ from real assets in that they don't grant you ownership of a given asset. Options trading is speculative in nature and carries substantial risk of loss.

How options work

The price of options depends on 3 factors:

• The future price of the underlying asset
• Their expiration date
• The volatility of the underlying asset

The value of option contracts depends on the probabilities of future price events. Prices usually increase when an event from which an option would profit is likely to happen. For example, a call value goes up as the price of the underlying asset increases.

Options are also characterized as a wasting asset. As the expiration date of your options nears, their value decreases. This happens because of the lower probability for price movements in the underlying stock. Since time is a component in the price of an option, a one-month option is less valuable than a three-month option for the same product. This is because a longer time frame allows for a higher probability of a price move in your favor, and vice versa. This also means that options with a more distant expiry date will be more expensive.

Volatility in the price of the underlying asset also increases the price of an option because uncertainty pushes up the odds of a positive outcome for you. Bigger price swings will increase the chances of an event occurring. So the more volatility, the higher the price of the option.

You saw the details, now let's zoom out. Here are once again the best options trading platforms in 2022:

tastyworks is our winner, the best options trading platform in 2022.

All the above listed trading platforms are a great choice. Don't forget that trading options carries risk. Pick the one that works best for you and take the next step in your trading journey. Let us know what you think in the comment section.

Still unsure? Use our broker finder to find the best broker for you.