Options trading conditions at Interactive Brokers explained

Options trading is increasingly popular, but it's still something of a niche product aimed at more experienced traders, so not all brokers offer it and trading conditions can differ widely.

We have good news: Interactive Brokers offers options trading, under good conditions and with access to many options markets. Click to open your Interactive Brokers account or read on for details and comparisons.

Interactive Brokers is great for options trading

[Broker name] is great for options trading

Adam Nasli

Trading • Safety • Market Analysis

I bring extensive financial expertise as one of BrokerChooser's earliest team members. Personally, I tested nearly all 100+ brokers on our site, opening real-money accounts, executing trades, assessing customer services, and providing firsthand assessment. My professional background includes roles in the banking sector and a degree from Central European University, where I teach finance. My passions lies in in-depth research of the financial industry, building trading algorithms, and managing long-term investments.

Learn about our methodology

Adam Nasli

Trading • Safety • Market Analysis

I've tested dozens of brokers in recent years, including their options trading features. Interactive Brokers impressed me overall; here's why:

• It has an above-average options trading score based on fees, products and UX.
• Interactive Brokers offers access to 34 options markets.
• Options trading fees at Interactive Brokers are low.
• Trading platform and research quality make a difference.
• See how Interactive Brokers compares to the best in class.

Before we begin, let's see if Interactive Brokers is available in your country:

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To assess whether Interactive Brokers is a great place to trade options, we calculated a comprehensive options score that takes into account options trading fees, the potential number of options products available, and the quality of the broker's trading platform (including charting and other research tools).

Interactive Brokers's overall options score of 4.7 stars is considered above average among the brokers we cover that offer options trading. Here's how Interactive Brokers scored against some close rivals:

Need a refresher course on options trading? Here's a high-level overview of all you need to know about trading options. If you're already familiar with the basics, you can dive right into options trading strategies or the niceties of options pricing.

Still lacking options trading mileage? We suggest you start with our introduction to options trading for beginners.

As with other product types, Interactive Brokers offers an extremely wide range of options markets. You can access the biggest ones, like the Chicago Board Options Exchange (CBOE) or the CME Group, as well as smaller markets, such as the Korea Stock Exchange (KSE) and the Mexican Derivatives Exchange (MEXDER).

Interactive Brokers offers several tools to assist with options trading. While most of these tools are accessible through the TWS platform, some basic tools are also available via the Client Portal.

Master options trading with Options Wizard

One of the simplest tools, called the Options Wizard, can be found in the Client Portal by clicking 'Trade,' then 'Option Chains,' searching for and selecting the underlying symbol, and finally clicking 'Options Wizard.'

The Options Wizard helps you choose an options trading strategy based on your expectations for the price or volatility of the underlying asset.

For example, if you anticipate that stock X's price will rise within a specific time frame, you can input these details into the Options Wizard, and Interactive Brokers will provide you with options trading strategies that align with your view.

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You pay options fees depending on the number of contracts you traded in the given month.

If you choose the IBKR Pro tiered plan and use limit orders when trading US listed options, you'll often find that fees will be lower than 65 cents/contract or might be even negative. That's because IBKR's SmartRouting uses many exchanges and some of them give you a rebate for adding liquidity to the market.

If you trade option spreads, IBKR Pro's SmartRouting is very beneficial for you as this order type submits each leg at the best possible venue for execution.

In the table below, we listed options trading fees (calculated in USD terms) at Interactive Brokers and some of its competitors for trading 10 options contracts.

Please note that some brokers don't charge a separate fee for closing an options trade. In these cases, in order to represent this discount properly, we calculated with just half of the opening fee, because most other brokers charge for both the opening and closing transactions.

So what's all the fuss about fees? Aren't they just a tiny fraction of the value of a typical trade? Well, they may be, but differences in fees among brokers can still be substantial. Of the 100+ brokers we cover, the cheapest one charges $5 for trading 10 US stock index options contracts, while the most expensive one charges $35. Even if you're just a casual trader who does one or two options deals a month, the difference in trading fees can add up to hundreds of dollars a year. Just think of all the goodies you can buy with that money!

Trading fees and product selection are only part of the story when it comes to options trading.

• A great trading interface (especially on desktop) with user-friendly search and order functions, good charting capabilities and quality research material is an option trader's best friend.
• Costs don't stop at trading fees; if you trade often and want access to your trading profits, withdrawal fees can sting.

In the table below, you can check how Interactive Brokers compares to some close competitors in trading platform quality and other features.

Interactive Brokers is great for options trading, but can you go one better? See for yourself by browsing our top ten list of the best options brokers in your country.

Alternatively, if you want a broader comparison or have some specific other brokers in mind, you can use our broker comparison tool to size up options brokers along many different criteria.

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