What is Options Trading? Options Trading in the United States
An option is simply a contract whether to buy or sell stock at a certain price that has been pre negotiated within a certain time limit referred to as the expiration date. Traders and investors sometimes prefer trading options which are more flexible and help them manage any risks that they may incur.
Option traders working in the US should be registered by the Securities and Exchange Commission as a way of regulating the market of option contracts. Options trading also require traders to collaborate with brokers such as Australian traders who assess their experience in trading while at the same time helping them, understand the risks involved in opening option trading account.
Options trading help to predict outcome using the power of leverage while at the same time saving on capital. It offers a wide selection of option contracts for underlying securities such as stock and indexes thus increasing flexibility. It also increases the power to act on new market niches that are more likely to have higher potential.
Some of the Options brokers that forex etx traders go for in the US are discussed as follows:
1. E* Trade
Options such as equities, indexes and futures are provided at E*Trade. They also provide a 50₵ equity per contract by placing 30+ stock or option trades per quarter. It allows placing a multileg trades through single order placements possible.
E*trade provides a program known as the Dime Buy pack Program. This is cheaper for short options. It provides commission free options. To buy – to – close for 10 ₵ or less is quite convenient. Management of risks such as pro is possible since commissions are free here.
2. TD Ameritrade
Ameritrade options do not require year to year maintenance. It offers free platforms with no subscription fees. This account also avails mobile apps and integrated option strategies that are useful for online trading. They charge $ 9.99 per option contract.
This platform charges $ 7.95 and $ 0.75 per contract.It also provides features and tools to monitor how prices fluctuate within the global market.
This has support options such as IQ Edge and IQ web to choose from. The IQ Edge option provides traders with multileg option trades. $ 0.75 is charged per every contract.
Unique trade option strategies are available here. Some of the strategies implemented by Scottrade include income, growth and speculative strategies. Its charges are $ 1.25 per option and a brokerage charge of $ 7. It also offers option exercises and assignments for traders to familiarize themselves with options trading at $ 17.
6. Charles Schwab
Options trading with Charles Schwab comes at less prices due to discounts offered. Base charges go for $ 8.95 per trade while each contract goes for $ 0.75. Option chains and option charting are also common here. An option screener is also provided to trader’s selection. Single order placements for straddles and spread are also supported here.
7. Interactive Brokers
This offers a tiered structure based on contracts traded against an option premium value. The more option contracts traded, the lower the brokerage charge per a contract. One option contract goes for a minimum of $ 0.25. It also has detailed reporting features for options of risk management.
8. Trade King
This provides security classes as well as tools such as option chain display, option scanners and option valuation calculators necessary for option trading. A base fee of $ 4.95 is required in addition to $ 0.65 as charges for one contract.
The Option Station Pro is an option platform introduced by TradeStation incorporating new improved features and tools for quantitative analysis. These tools for options trading include spread management, graphs that are three dimensional and data analysis. They charge $ 0.20 per contract and a brokerage fee for multiple packages at $ 4.99.
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