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Affiliate programm Forex Binary => Forex and binary option affiliate => Topic started by: Affiliate on Aug 15, 2022, 08:10 am

Title: Best Options Trading Platforms & Brokers Compared For 2022
Post by: Affiliate on Aug 15, 2022, 08:10 am
Best Options Trading Platforms & Options Brokers.
Options brokers let you speculate on financial markets through buying and selling call and put options. We have ranked, compared and reviewed some of the best options brokers in the UK to help you choose the most appropriate account for your trading strategy.
Best Options Brokers Compared.
Our picks for the best options brokers are based on over 7,000 votes in our annual awards, our own experiences testing the accounts as well as an in-depth comparison of the features that make them stand out compared to alternatives.
City Index Options Trading.
Best for CFD & spread bet options.
City Index offer options trading via spread bets and CFDs, the benefit of the course of trading options as a spread bet for UK customers is that profits are free from capital gains tax. Phone trading is one feature that sets City Index apart from other retail options brokers. They provide personal service and can assist with complex options execution strategies.
CFDs, Spread Betting, Forex.
69% of retail investor accounts lose money when trading CFDs with this provider.
Interactive Brokers Options Trading.
Best overall options broker 2022.
IBKR offers one of the most, if not the most advanced options trading platform for private clients, both for derivatives markets (indices, commodities and forex) and stocks and shares. They provide access to a huge amount of UK and international stock options, but where they really win business is by their execution capabilities.
10,000+
CFDs, Forex, DMA, Investing.
60% of retail investor accounts lose money when trading CFDs with this provider.
Saxo Markets Options Trading.
Best for on-exchange stock options trading.
Saxo is one of the better value brokers for larger traders where you can trade stock options from USD 0.85, EUR 1 or GBP 1. Saxo Markets provides access to 1,200+ listed options from 23 exchanges worldwide, across equities, indices, interest rates, energy, and metals.
CFDs, Forex, DMA, Investing.
70% of retail investor accounts lose money when trading CFDs with this provider.
IG Options Trading.
Widest range of options for CFDs and spread betting.
IG offers options trading via financial spread betting or CFDs as daily, weekly, monthly and quarterly markets. If you have a professional account you can trade short term limited risk options as well, with time-frames as low as 1 minute.
CFDs, Spread Betting, Forex, DMA, Investing.
73% of retail investor accounts lose money when trading CFDs with this provider.
Spreadex Options Trading.
Good for options on major indices.
With Spreadex you can trade options as a CFD of spread bet and spreads for UK 100 and Germany 30 start from 4 points with a minimum stake of £2. Whilst you are limited on what you can trade online, Spreadex will let you.
CFDs, Spread Betting, Forex.
69% of retail investor accounts lose money when trading CFDs with this provider.
What is an options broker?
An options broker is a financial services firm that enables it's clients to trade options to speculate on the price of financial markets. There are two types of options broker, DMA options brokers that connect their clients direct to exchange to buy and sell options and OTC options broker where clients take an options position against the firm.
What is options trading?
Options trading allows you to speculate on whether the price of a financial market or instrument will go up, down or stay the same.
Buying options is one of the most versatile and low-risk ways to speculate on the financial markets. However, as well as being low risk when buying, if you are shorting, options can be incredibly risky (more so than futures).
How does Options Trading Work?
There are four things to consider when trading options:
What is a call option?
A call option gives you the right to buy a certain amount of something at a certain date in the future and are bought when you think the underlying asset will rise.
What is a put option?
A put option gives you the right to sell a certain amount of something at a certain point in the future and are bought when you think the price of an underlying asset will fall.
What is an option strike price?
A strike price is a price at which you can buy or sell an underlying asset at a certain point in the future. If you buy a call, you are "in the money" if the strike price is below the underlying market price. You are "out of the money" if the price is above. And vice versa; you are "in the money" if you buy a put and the strike price is above the market price and out of the money if the price is below it.
What is an option premium?
The premium is the price you pay when you buy an option or what you receive when you sell an option. It is a combination of time and intrinsic value. Time value is determined by how close the option is to its settlement date or expiry. Intrinsic value is based on how far away the price is from the strike price.
What is an option date?
The date of an option is the date at which the option settles or expires. If you have bought an option, you have two choices at the expiry date. You can either let the option expire worthless if it is out of the money or exercise it if you are in the money.
Where are options traded?
There are two types of traded options - OTC (over the counter) and on exchange:
OTC options are options traded via CFDs, financial spread betting or forex. They are more common for trading than most liquid indices, commodities and forex pairs. On-exchange options are options traded on an exchange like the London Stock Exchange, CME (Chicago Mercantile Exchange) or COBE (Chicago Board Options Exchange). On-exchange options cover a much wider spectrum of instruments like small to large-cap stocks and treasuries.
Title: Re: Best Options Trading Platforms & Brokers Compared For 2022
Post by: Affiliate on Aug 15, 2022, 08:10 am
What are options contracts?
An option contract gives you the right, but not the obligation, to buy or sell something in the future.
There are two types of options contracts: puts, and calls.
Puts give you the right to sell an asset. You buy them if you think the market will go down and sell them if you think the market will go up. Calls give you the right to sell an asset. You buy them if you think the market will go up and sell them if you think the market will go down.
Here is how to trade options for more on the specifics of options trading.
What can you trade options on?
Options can be traded on almost any market. However, some are more liquid than others. In some cases, you can trade options online on major instruments. Other less liquid assets will require a specialist options broker and a market maker to price an option based on the underlying asset price.
The main markets for options trading are:
What are Equity options?
Equity options are options traded on company shares. You can find equity traded option prices and trade them on the London Stock Exchange. For more information on equity traded options, here is more information on equity options trading.
What are index options?
Index options are traded on major stock market indices such as the FTSE, DAX, DOW, S&P and Nikkei.
What are commodity options?
Commodities options are trading options on gold, silver, oil, natural gas, corn, wheat and soybeans.
What are forex currency options?
Forex options are currency options that can be traded for speculation or to hedge currency exposure. If you want to buy a currency option to protect a price for an upcoming physical conversion, you need a currency broker that offers OTC FX options. However, if you are more interested in speculating on currency prices with options, most forex brokers have forex options trading on major forex pairs.
Trading stock options as a UK resident.
London-based brokers provide some of the most robust trading infrastructure and regulation globally and provide access to global markets. Most London-based brokers will have offices in different countries, so if you are trading overnight markets, there will be dealer support available.
How is options trading managed in the UK?
The two different types of options broker in the UK are DMA and OTC (over the counter).
DMA options trading would generally be more appropriate for sophisticated investors as you can buy and sell options. When you sell an option, losses are potentially unlimited so they are very high risk. DMA options through popular brokers like Saxo Markets and Interactive Brokers also allow their clients to trade on more illiquid assets, which would not be appropriate for inexperienced investors as they may not be able to close their positions. OTC options via spread bets and CFDs through popular brokers like IG or CMC Markets are more common for retail private investors as trading platforms will provide a selection of options on the most liquid and less volatile markets such as large-cap stocks and major indices. They may also have higher margin requirements than on exchange options, which reduces the risk for investors but still enables them to buy and sell options online.
Who regulates options trading brokers in the UK?
Whether a broker is offering OTC or DMA options trading, they need to be regulated by the FCA. Any broker claiming to offer options trading that is not regulated by the FCA is breaking the law and may well be a scam.
All options brokers regulated by the FCA are listed on the FCA register. We also only include brokers in our options broker comparison table that are regulated by the FCA.
The pros and cons of options trading.
Options trading is both a high and low-risk way to trade the financial markets. Here we list the main pros and cons of trading options with an options broker.
Advantages of trading options:
They are very cheap to trade They are available on or off-exchange Risk is limited to premium (if you are a buyer) Very high potential returns versus risk Lots of strategies to speculate on volatility and price movement.
Disadvantages of trading options:
They can be illiquid Quickly become worthless Risk is potentially unlimited (if you are a seller)
How to start options trading.
We have produced a comprehensive guide on how options work and how to trade options but essentially, you need to have the below to start trading options:
An account with an options broker Funds to trade with An idea of how much risk you want to take A full understanding of the risks and rewards of trading options.
How to compare options trading brokers in the UK.
If you are looking for a broker to trade options and want to compare options trading brokers in the UK, here are the main things to look out for:
Are they FCA regulated? You can check the FCA register here. What is the commission per lot? Will the options broker allow you to sell options as well as buy? Are options cross-margined with other products (so you don't double up on margin)? How experienced are the brokers you are dealing with? Does the options broker allow options strategies or just one-off trades? What market coverage does the broker offer, i.e., stock, forex, commodity or index, etc.
What makes one options broker better than another?
The key differences between options brokers are:
Types of options offered - does a broker offer DMA and/or OTC options? Costs of options trading - how much does it cost to trade options? Market access - what stocks, indices, commodities, and currency pairs can you trade? Dealer experience - are they capable of helping with strategy creation and execution?
Where can you find genuine reviews of options brokers?
You can read reviews of options brokers in the UK by clicking on the relevant links below or in our option brokers comparison table. Our options broker reviews cover client testimonials, regulation, market coverage, trading platforms and customer service.
For a list of DMA and futures brokers that offer options to institutional clients based in the UK that are regulated by the FCA, see our specific comparison tables. Here's where you'll find all expert & client broker reviews featured on Good Money Guide.
You can read reviews of the best options broker we cover here:
Best options trading platform for beginners.
The best options trading platform for beginners is Saxo Markets based on our matrix and criteria.
It's important that if you are a complete beginner to investing, you should accept that options may not be for you. Options can be quite simple and quite complex, and in many cases, there is the risk of losing your entire premium. If you do not fully understand the risks involved in options trading an options broker should not allow you to open an options trading account.
So, if you are a beginner options trader and looking for a platform, make sure you have significant experience in trading and investing. And most importantly, make sure your broker understands that you are a beginner to options trading.
Many options brokers can provide advice on strategy and execution (although not on what to buy or sell). Options brokers also understand the market well, so don't be afraid to trade over the phone to make sure that you explain exactly what you want to do.
For beginners, it may be more appropriate to trade options where you are limited to buying equity options and have your risk limited to the premium you pay for an option.
Best options brokers for sophisticated investors.
Saxo Markets is the best options broker for sophisticated investors as it offers DMA on exchange options, and robust trading platform as well as CFD option products with algo and API trading.
For experienced traders, it would be more appropriate to trade on exchange options with a DMA broker, where you can work bid/offers inside the spread as well as utilise strategies for more complex options trading.
Title: Re: Best Options Trading Platforms & Brokers Compared For 2022
Post by: Affiliate on Aug 15, 2022, 08:11 am
Cheapest options brokers for trading.
There are two types of spread when trading options which need to be considered when looking for the best spread when options trading:
Options spread - this is the name of an options strategy, the most common being straddles, strangles, condors and butterflies. Some of these can be traded online, but the majority need to be traded over the phone with a dealer. The better relationships your dealers have with market makers, the better the price of your spreads will be. OTC spreads - unlike DMA options trading where you are charged a commission per lot, if you are trading OTC options via a CFD or spread bet, the commission will be built into the premium (also known as the bid-offer spread).
Best equity options broker.
In the UK Saxo Markets is the best options broker for buying stock options as they provide access to 26 exchanges and fees per options contract are as low as $1.25 on FTSE 250 and NASDAQ stocks. Interactive Brokers, does offer cheaper charges on US option contracts, however, Saxo has more of a base in the UK.
Best index options broker.
Saxo Markets is the best options broker for trading index options in the UK as based on our matrix, they offer more index options trading types than any other broker including DMA index options and CFD options on indices.
Best commodity options broker.
Saxo Markets is the best commodity options broker as they offer DMA and CFD options on commodity markets. Other brokers like IG do offer commodities options, but the range of commodities to trade them on is small and they can only be executed as a CFD.
Best forex options broker.
Saxo Markets is the best forex options broker as they have one of the widest range of currency pairs to trade options on a DMA and CFD basis. If you are looking for.
Options Trading FAQ:
Why is options trading more popular in the US than in the UK?
US traders are not allowed to trade on leverage through products like CFDs of financial spread betting. There is some form of margin trading permitted through margin loans and ETFs. If a US trader wants to increase their leverage on a position, options are one of the only ways to do it. In the UK, margin trading is readily accessible, so options markets are not as liquid and are therefore more expensive.
How are options trading profits taxed in the UK?
All options trading except for financial spread betting is subject to capital gains tax. Financial spread betting is unique to the UK and is free of capital gains tax as trades are structured as a bet. However, it is important to speak to an independent financial advisor or tax specialist as tax can be different based on individual circumstances and is subject to change.
Which UK companies can you trade options on?
You can trade options on most large-cap shares listed on the London Stock Exchange. The smaller the market cap of a listed company, the less likely there will be liquidity or a market maker making prices for smaller-cap shares.
Is options trading available in the UK?
Options trading is available for clients in most countries and in most markets around the world. UK investors can trade options with brokers based anywhere in the world.
Will you be able to trade options in US companies as a UK resident?
Yes you can trade US company options as a UK resident. Restrictions on trading tend to focus on US citizens trying to trade UK products such as CFDs or other OTC derivatives, which are basically off-limits to most US citizens or residents. However, there are not very many restrictions for UK traders wishing to trade US instruments, in this case, options.
To trade US company options as a UK resident you will need an account with an options broker that offers options on US markets which one you choose will likely be influenced by several factors.
Firstly, whether you want to trade on exchange options in the USA or are happy to trade CFDs on US options?
That's a subtle distinction but it can be an important one if, for example, you are intending to pursue buy-write strategies, where you are hoping to take in or deliver the underlying stock on exercise. If so you will need to trade on-exchange options.
However, If you are just looking for economic exposure via options, and have no designs on ownership of the underlying, then CFDs on options could work for you too.
The size of your account may also be relevant, simply because it may limit what you can trade in. Exchange-traded options are only traded in whole lots or multiples thereof.
Whilst CFDs on options (or indeed Spread bets on the same) allow you to trade in fractions of an options lot.
Remember that options are complex products and you will need to demonstrate an understanding of how they work and the risks involved in trading them.
You need to demonstrate a working knowledge of geared derivatives to open a CFD or Spread Betting account, and you have to pass a suitability quiz to do so.
If you are not familiar with these subjects you will need to read up on them in our guide on how to trade options.
As to where you can trade options, if you are going to be trading on exchange then Interactive Brokers are worth investigating. They are a US firm with UK operations and are options specialists who offer competitive commission rates.
As an alternative, you could look at Saxo Markets who offer options on more than 1200 listed instruments worldwide. Charges at Saxo are tiered, based on levels of client activity and account size, so the more you do the less you will ultimately pay.
Finally, you should also consider IG they offer a wide range of OTC options (CFDs over options) and have done that for more than 20 years. However they also recently acquired a US options broker and educator and are likely to roll out on-exchange options trading to UK clients as a result.
Can you trade stock options as a US resident?
US residents are only allowed to trade options with a US regulated options broker. UK brokers will not open an account for a US resident.
How do you get the best pricing and commissions from options brokers?
Just ask. All commissions with brokers (especially options brokers) are negotiable. So, if you are trading a significant volume, ask for a reduction in your options commission.
Where to compare options trading brokers in the UK?
Most options brokers find that clients will trade options as part of an overall portfolio for hedging or speculation. You can compare options brokers in the UK here. Choose the options broker offers additional services that are required for your overall investment objectives.
Where can I find a list of options brokers in the UK?
Trading UK equity options are one of the most popular ways to protect and hedge an overall long equity portfolio. We provide a list of UK equity options brokers in our options broker comparison table.
Can you make money trading options?
Yes, you can if you call the market right. Options are a tool for investing or trading and there is an opportunity to make a profit and lose money. As with all investing, you can make money trading options if you call the market correctly, but in equal measure, you can lose it. Relative to other forms of investing, options trading should be considered high risk and only suitable for experienced and sophisticated investors.
Can you trade American stock options in the UK?
Yes, you can although you need an options brokers that provides access to US stock markets like Saxo Markets.
What is the difference between American and European Options?
American options can be exercised at any time whereas European options can only be exercised on expiry.