I'm very new to options (like 2 weeks in). I'm using Robinhood just because I already had a account with them that I wasn't really using but it seems fast, easy. no fees etc. The more I hang out on Reddit the more horror stories I keep hearing especially today when people want to make quick trades. I have a small amount of capital to trade with right now (around $10k).
Posted Dec 12, 2018, 7:13 PM UTC
Interactive Brokers may also be worth researching
I use IB... Not sure I'd be recommend them to a new trader!
I use Robinhood with no problem. But my longest broker relationship has been with TradeStation. Always have loved them, great response and support. Commissions can be a bit unreasonable however they have programs that some people qualify for, I believe if you have served or are serving in the military at some point you get Free Commissions. Their platform is great and their iPhone app is decent as well.
Tastyworks. Cheap, and works well, has mobile and computer.
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So, TDAmeritrade/Thinkorswim usually has a promotion of X amount of free trades based on your initial deposit. I would go for that and learn the Thinkorswim platform. Even if you decide to move away from the platform after your free trades are up, Thinkorswim has incredibly powerful tools for analysis/charting. You'll want to make use of their tools even if you have $0 in it.
After your free trades are up, if you're being profitable, actively trade for a month with their commissions and after the month is up, call them up and ask for reduced commission fees and cite Tastyworks as a competitive broker that you are looking to move your money to. TDA should definitely budge their commissions down, but do not expect them to match Tastyworks. Try to take them down to $0 base and 0.75-1.00/contract
Tastyworks isnt bad for the fees. If you want a better platform and don’t mind paying a little more optionshouse is an option.
TOS is widely considered to be the best options platform. A number of new traders have reported getting $1 per contract commissions with zero ticket fees right away, even with smaller accounts, although I have heard some are getting 300 commissions free trades as I think they want to sort out who will really be trading or not. I'm at .75 per contract with no ticket fee, and know people who are at .55. Note that they have a 24-hour trade desk, in-house market makers and a direct connection to the exchanges, so fills are fast and at the best prices.
TW is OK. Their platform is a tad quirky but usable. It has been stagnant for some time now without any updates or major improvements. They certainly have a following. They use a 3rd party to make trades and who pays them to send trades their way, this means slower fills at worse pricing. Fills often sit for some time before completing.
RH is the MOST EXPENSIVE of these all! You don't see all the way they make money from you, but they do. They also use a 3rd party for fills, that costs money and fills are super slow. They take more collateral for trades and it takes longer to give and get money out of them. Their interface is pretty basic so lacks power, and has limited strategies you can trade, but the biggest thing is all the problems. Just check out r/Robinhood as they are listed there by the dozens. Reports of a ton of money being lost for various reasons.
If you are serious about trading options you will make more money with quicker fills, the ability to see where your positions are, the features to analyze and put on any strategy with TOS. If you want to do a great job then use the best tools!
I have not used some of the other platforms, so they may be worth a look.
Thanks!
They use a 3rd party to make trades and who pays them to send trades their way, this means slower fills at worse pricing.
For what it's worth, TD sells order flow as well: https://www.tdameritrade.com/retail-en_us/resources/pdf/AMTD2054.pdf
Tastyworks is the best option for options, hands down.
In TDAmeritrade, TOS, you should negotiate your prices. I negotiated $4.95 per trade and $.50 per contract. When my free trades runs out, I will renegotiate to $.75 per contract and no trade fee. Many others have done this.
I recommend against RobinHood. Their "free" platform involves non-response to urgent client requests and information, and there will come a time when prompt response is worth hundreds or thousands of dollars to you. You can check out the r/RobinHood subreddit for a couple of examples a week of the importance of having a responsive broker.
Think or Swim / TDAmeritrade and also TastyTrade are well regarded for having a great platform oriented towards the retail trader, for a price.
There are dozens of other good brokers that have good platforms, for a price, and good service, and may be oriented towards different kinds of clients, whether high asset value, high volume, high quality execution, or platforms that can be programmed by third parties, or oriented towards individuals affiliated via other kinds of accounts, such as retirement accounts, and the like. .
Thank you. You are the second person to tell me to get away from RH. I wasn't effected by the shitstorm that happened today but I have definitely been following it all day on Reddit.
TastyTrade seems good as far as fees go and I have been watching their live streams and videos and trust like the information there. But when I look at reviews on the app store there are a lot of negative reviews. I'll probably move to Thinkorswim and deal with commissions there since they seem to have the best suite of tools and best interface
The Tastyworks reviews are mainly for the mobile app... Their desktop application is great
I love TastyWorks. Their customer service is excellent