This is not investment advice. The information provided is for educational and informational purposes only and does not constitute a recommendation to buy or sell any financial product.
Options trading platforms are a subset of stock trading platforms that are designed for the specific needs of the options trader. The options trader needs a platform that supports multi-leg orders (vertical spreads, iron condors, butterflies, calendar spreads), that shows the Greeks (delta, gamma, theta, vega) in real time, that provides the implied volatility data and the options chain with live pricing, and that executes the order quickly and reliably.
A platform that is excellent for stock trading may be poor for options trading, because the platform does not support the options-specific features. The options trader should evaluate the platform on the options features, not on the stock features.
The essential options features
The options chain is the most important feature. The chain should show the call and put prices for each strike and expiry, with the bid, the ask, the last, the volume, and the open interest. The chain should update in real time, and the chain should allow the trader to filter by expiry, by strike range, and by moneyness.
The Greeks are the second most important feature. The platform should show the delta, gamma, theta, and vega for each option, and the platform should update the Greeks in real time as the stock price and the time change. The Greeks are the tools for understanding the option's risk profile, and the trader who does not see the Greeks is trading blind.
The multi-leg order entry is the third most important feature. The platform should allow the trader to build a multi-leg order from the options chain, to see the net premium, the maximum loss, the maximum gain, and the Greeks of the combined position. The platform should execute the multi-leg order as a single trade, not as a series of individual orders.
The platforms for different trader types
The professional options trader uses a platform like ThinkorSwim (TD Ameritrade), Interactive Brokers' Trader Workstation, or TradeStation. The platforms offer the full options chain, the real-time Greeks, the multi-leg order builder, the probability analysis, and the volatility data. The platforms also offer the API for automated options trading.
The semi-professional options trader uses a platform like ETRADE's Power ETRADE, Fidelity's Active Trader Pro, or Schwab's StreetSmart Edge. The platforms offer the core options features (the chain, the Greeks, the multi-leg orders), but the features are less sophisticated than the professional platforms.
The retail options trader uses the broker's web interface or the broker's mobile app. The platforms offer basic options features (the chain, the Greeks, the single-leg orders), and the platforms may not support the multi-leg orders or the complex strategies. The retail platforms are suitable for a beginner who is buying single-leg calls and puts.
The data you need
The options trader needs the same market data as the stock trader (Level 1 and Level 2 data for the underlying stock), plus the options data (the chain data and the Greeks). The options data is provided by the Options Clearing Corporation (OCC) in the US and by the relevant exchange in other jurisdictions.
The options data is more expensive than the stock data. A retail trader in the US pays $10-$20 per month for the options data from the US exchanges, and the data cost is on top of the stock data cost and the platform cost. The total data cost for an options trader is $50-$200 per month.
The execution quality
The execution quality on an options platform is determined by the platform's routing and the platform's reliability. The platform should route the options order to the exchange with the best price and the highest liquidity, and the platform should execute the order in milliseconds. The platform should also support the options-specific order types (limit on the net premium, stop on the net premium, trailing stop on the net premium).
The reliability is the platform's uptime and the platform's performance during high-volatility sessions. An options platform that goes offline during a Fed meeting or an earnings session is a platform that cannot be used for the purpose the trader needs it for.
Common questions about options platforms
Do I need a margin account for options trading? A margin account is required for multi-leg strategies that involve short options (spreads, iron condors, butterflies). A cash account is sufficient for single-leg option purchases.
Can I trade options on a mobile app? Most mobile apps offer basic options features (the chain, the Greeks, single-leg orders). A desktop platform is recommended for complex strategies.
What is the best options platform for a beginner? A platform with a simple interface, clear Greeks display, and good educational content (thinkorswim, Interactive Brokers' web interface) is the best starting point.
Related resources
Where to start
If you are evaluating options trading platforms, the most useful first step is to compare the options chain display, the Greeks display, the multi-leg order builder, the data cost, and the execution quality. Our broker comparison lists the options traders and the platform features, which together tell you what the platform looks like before you open your first options trade.