Best options trading platforms and brokers in 2020

To find the best options trading platform in 2020, we went ahead and did the research for you. We tested, analyzed and compared 62 quality online brokers, and 5 made it to the top. We give you our list, you pick your winner. And now, without further ado...

The top 5 picks for the best options trading platform in 2020:

1. TD Ameritrade is the best options trading platform in 2020.
2. Fidelity is the runner up.
3. Charles Schwab is third.
4. Tastyworks, at number four.
5. In the fifth position is Interactive Brokers..

What makes a trading platform good for options? First of all, it needs to offer fair options trading and withdrawal fees. A high quality desktop trading platform and research tools are also essential. And finally, the options product offering is an important factor.

Easy to list, but hard to figure it out. We are testing brokers based on more than 200 criteria with real accounts and real money. We know what's up. You can find all the ranking criteria in our methodology.

Not sure which trading platform? For a tailored recommendation, check out the broker finder tool. You can enter your country and it will show only the relevant brokers. Want more details? Compare brokers with this detailed comparison table.

And now, let's see the best options trading platforms in 2020 one by one. Starting with the winner, TD Ameritrade.

TD Ameritrade was founded in 1978 and it is one of the biggest US-based stockbrokers. It is regulated by top-tier regulators like the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA) and the Commodity Futures Trading Commission (CFTC).

TD Ameritrade is considered a safe broker since it has a long track record, is listed on a stock exchange, has a banking background, discloses its financials, and is regulated by top-tier regulators.

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#1 TD Ameritrade
Options fees

3.8

The options fees at TD Ameritrade are generally low.

#1 TD Ameritrade
Options market coverage

#1 TD Ameritrade
Desktop trading platform

4.8

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

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#1 TD Ameritrade
Research

4.8

TD Ameritrade has great research tools. You can use many tools, including trading ideas and detailed fundamental data.

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Fidelity is a US stockbroker, founded in 1946. It is regulated by top-tier regulators 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 regulators.

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#2 Fidelity
Options fees

3.8

The options fees at Fidelity are generally low.

#2 Fidelity
Options market coverage

#2 Fidelity
Desktop trading platform

3.8

Fidelity's desktop platform is highly customizable, offers a lot of order type, and has a clear fee report. However, two-step login is not provided and in some cases, the platform loaded slowly.

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#2 Fidelity
Research

4.8

Fidelity has great research tools. You can use many tools, including trading ideas, detailed fundamental data, and great screeners.

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Charles Schwab was founded in 1971 and it is a US discount broker listed on the New York Stock Exchange.

It is regulated by several top-tier financial authorities, such as the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and the Financial Conduct Authority (FCA).

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#3 Charles Schwab
Options fees

3.8

The options fees at Charles Schwab are generally low.

#3 Charles Schwab
Options market coverage

#3 Charles Schwab
Desktop trading platform

4.0

Charles Schwab has a great desktop trading platform. It is highly customizable, offers many order types, and has a clear fee report. On the negative side, it is available only for Windows.

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#3 Charles Schwab
Research

4.3

Charles Schwab has great research tools including trading ideas and detailed fundamental data but it's hard to navigate on the web trading platform due to the diversity of research tools.

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Tastyworks is a young, up-and-coming US broker focusing on options trading.

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

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#4 Tastyworks
Options fees

2.6

The options fees at Tastyworks are generally average.

#4 Tastyworks
Options market coverage

#4 Tastyworks
Desktop trading platform

4.4

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

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#4 Tastyworks
Research

4.5

Tastyworks's research tools include trading ideas, a great charting tool on the desktop platform, and a high-quality news flow. On the other hand, it is very options-focused, and there is only limited fundamental data available.

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Interactive Brokers was founded in 1978 and is one of the biggest US-based discount brokers. 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).

As it has licenses from multiple top-tier regulators, the broker is considered safe. Also, having a long track record and publicly disclosed financials while being listed on a stock exchange are also great signs for its safety.

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#5 Interactive Brokers
Options fees

3.6

The options fees at Interactive Brokers are generally low.

#5 Interactive Brokers
Options market coverage

#5 Interactive Brokers
Desktop trading platform

3.0

Interactive Brokers provides a desktop platform for IBKR PRO accounts with many customizable options and advanced execution functions. However, the platform is not user-friendly and is more suited for advanced traders.

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#5 Interactive Brokers
Research

3.5

Interactive Brokers has almost limitless research possibilities, but the user interface is overly complicated, hard to follow and not well designed.

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Trading with options may seem like a difficult task, but knowing a few key points can help understanding them. Choosing an options trading platform based on the most important criteria will also help you get a good trading experience.

How did we pick the best options trading platforms?

When we selected the best options trading platform in 2020, we ranked brokers along more than 200 criteria. Not to overwhelm you, we list the four most important criteria.

The 4 most important criteria for the best options trading platforms are:

Brokerage fees for options trading

How can I trade with wasting the least money on fees? We bet this is on top of your mind when you want to select the best options broker. Let's see how we checked.

It is tough to compare options trading platform fees, but we are here to help. You need to calculate with two fee categories: 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 real-life scenarios. So, you can compare the fees. We took

• 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 the group of derivatives. A derivative's price is dependent on or derived from the price of something else. You can buy options contracts on multiple asset classes such as equities, indexes, bonds, 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) or sell (in the case of a put) the underlying asset at a specific price on or before the option expires. Options give the owner rights and the seller obligations. Here are the key definitions to understand them:

• Call options: 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 gives the seller the obligation to give you the asset at the pre-agreed price.
• Put options: They give 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 an Apple stock that you own, and the price of the stock is falling, the put option is gaining in value. So, if the specific price agreed in the option is $450 but the Apple shares are now worth $400 you are in a profiting position.

Options are different to real assets because 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
• 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 grows.

Options are also characterised as a wasting asset. As the expiration date of your options looms closer, their value decreases. This happens because of the lower probability for price movements in the underlying stock. Since time is a component to the price of an option, the same  one-month option is less valuable than the three-month option. 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 time will be more expensive.

Volatility of the price of the underlying asset also increases the price of an option because uncertainty pushes the odds of a good outcome grow. Bigger price swings will increase the chances of an event occurring. So, the more volatility, the greater the price of the option.

You saw the details, now let's zoom out. Here are the best options trading platforms in 2020:

TD Ameritrade is our winner, the best options trading platform in 2020.

All listed trading platforms are a great choice. Don't forget, that trading options carries risk. Pick your winner and take the next step in your trading journey. Let us know what you think in the comments section.

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