Choosing a broker is the first decision every new options trader agonizes over — and it's the one that matters far less than you think.
Here's the truth most "best broker" listicles won't tell you (because they're paid by the brokers they rank): online brokers are a commodity. In 2026, every legitimate major broker offers $0 stock commissions and low options pricing. My results would be essentially the same at any of them — and so would yours. What actually matters is the strategy you run, plus two or three account settings most beginners never think to request.
I'm David Jaffee, a former Wall Street investment banker and full-time options trader. I have no incentive to steer you anywhere except one disclosed referral below. So do about 20 minutes of research, use this guide, and then simply get started.
Quick Summary:
- Accounts under ~$20,000: Tastytrade — mainly because it's the easiest place to get approved for selling naked options, which most brokers gatekeep from smaller accounts.
- Accounts $20,000+: E*TRADE (what I use) or whichever major broker offers you the best signup promotion — Schwab and Fidelity are equally credible.
- Non-US residents: Interactive Brokers.
- Whatever you choose: call and request approval to sell options (naked calls and puts), and if your account is $150,000+, request portfolio margin and negotiate your commissions. Those two phone calls are worth more than any broker-vs-broker comparison.
Which Broker Do I Actually Use?
I've used E*TRADE for many years, and I place every trade from the Power E*TRADE app on my phone. I can't recall ever placing a trade from their website or desktop software. I've never used advanced charts, analyst research, or any premium research product — because I believe technical analysis doesn't work, and when you sell option premium on the largest companies, all public information is already priced in.
Over the years, I negotiated my commissions with E*TRADE down to $0 base commission and 10 cents per contract, and I pay nothing to close options trading under 10 cents. That's the single most useful thing to know about brokers: with a meaningful account, commissions are negotiable — all it takes is a phone call.
Before settling on E*TRADE, I tried Interactive Brokers (powerful, but I found it difficult to use and kept getting charged small monthly fees) and Fidelity (decent, but it felt less flexible when I used it — though that was years ago). Both are legitimate choices; my clients use virtually every major brokerage, and their returns are not impacted by the choice.
Broker Comparison for Options Traders (2026)
Broker | Best for | Options pricing (approx.) | Notes |
|---|---|---|---|
E*TRADE (Morgan Stanley) | Accounts $20K+; my choice | Standard ~$0.50–$0.65/contract — negotiable with account size | Excellent mobile app; commissions and rates are negotiable by phone |
Smaller accounts; easiest naked-option approval | ~$1/contract to open (capped per leg), $0 to close, plus exchange fees | Built by options traders for options traders; interface is visual and slower for order entry — see my full Tastytrade review | |
Charles Schwab (incl. thinkorswim) | Beginners wanting robust tools + paper trading | ~$0.65/contract | Absorbed TD Ameritrade — thinkorswim and its paperMoney practice account now live at Schwab |
Fidelity | Long-term investors who also trade options | ~$0.65/contract | Rock-solid custodian; options tooling is adequate rather than exceptional |
Interactive Brokers | Non-US residents; professionals | Tiered, very low | The default choice outside the US; steeper learning curve |
| Casual beginners buying stock/ETFs | $0/contract | Does not permit selling naked options — read my full answer on whether Robinhood is safe and who it's right for |
Pricing changes and promotions rotate constantly, so verify current rates when you open your account — and remember that any US broker can be checked for free on FINRA's BrokerCheck database before you deposit a dollar.
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Why "Broker Education" Won't Make You Money
Many broker reviews rank platforms by their educational content and research reports. My honest opinion: if you're reading analyst research reports, you probably aren't making money. Profitable trading is not about accumulating knowledge — when you sell option premium on the largest companies, every piece of public research is already reflected in the price. Most broker "education" should be viewed as entertainment.
The one exception worth mentioning: Tastytrade's tastylive network produces genuinely useful content for beginners learning the mechanics of options. I disagree with parts of their trading philosophy — and I don't believe their approach maximizes profitability, which I explain in my Tastytrade review — but as free education on how options work, it's among the best available.
The Tastytrade Referral: Small Accounts Start Here
If you're starting with a smaller account, Tastytrade is my recommendation — primarily because it allows users to get approved for selling naked options far more easily than legacy brokers, and selling naked options is one of the most capital-efficient strategies a retail trader can run.
Fair warning from my own use: the Tastytrade interface is visual-first and noticeably slower for entering orders than E*TRADE — and at roughly $1 per contract to open plus pass-through exchange fees, it costs more than the negotiated rate I pay. But for getting started with a small account, the naked-options approval outweighs both drawbacks.
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The Two Phone Calls That Matter More Than Your Broker Choice
Call #1 — request full options approval. When you open your account, call and request the ability to sell options, including naked calls and puts. Some brokers make you answer a questionnaire or take a short quiz; answer honestly but completely. Without this approval, the most profitable side of the options market is closed to you.
Call #2 — for accounts of $150,000+, request portfolio margin and negotiate commissions. Portfolio margin can give you roughly 3x–5x more buying-power efficiency than standard Regulation T margin (minimums vary by broker — sometimes as high as $175,000). And at that account size, virtually every broker will negotiate your per-contract rate — but only if you ask. I explain exactly how margin types affect your buying power in my guide to margin accounts vs. cash accounts.
What About Robinhood?
Robinhood is the broker beginners ask about most, and my answer hasn't changed: your money is safe there, but it's the wrong tool for anyone serious about options income, because it doesn't permit selling naked options and its entire design nudges you toward buying them — the low-probability side of the market. A few of my students have also reported positions being closed out automatically without being contacted first. I cover the full picture — the SIPC protections, the regulatory fines, and who Robinhood is actually right for — in my complete review: Is Robinhood Safe?
Conclusion: Pick One and Get Started
The best online broker for options trading is, honestly, the one you'll feel comfortable enough with to actually begin. Don't get overwhelmed: open the account, request options approval, place a few small trades, and build from there toward a realistic target of roughly 2–3% per month.
- Under $20,000: Tastytrade (easiest naked-options approval).
- $20,000+: E*TRADE, or whichever major broker offers the best new-account promotion — always do a quick search for current signup bonuses before you commit.
- $150,000+: request portfolio margin and negotiate your commissions.
- Non-US: Interactive Brokers.
And remember the bigger point: the broker is the vehicle, not the engine. What I do — and teach — is selling option premium with debit-spread hedging (the Financed Bull), targeting a realistic few percent per month with defined risk. My returns of approximately +78% and +67% over the past year are backed by real E*TRADE statements on my verified results page, and the full approach is in my guide to making a living selling options.
Frequently Asked Questions (FAQs)
What is the best broker for options trading?
For most US traders: Tastytrade if your account is under ~$20,000 (easiest approval for selling naked options), and E*TRADE or another major broker if you're above that — ideally whichever offers the best signup promotion. The differences between legitimate major brokers are small; your strategy matters far more than your broker.
What brokerage should a beginner use?
A beginner serious about options should start with Tastytrade (small accounts) or E*TRADE/Schwab (larger accounts). Whichever you choose, call and request options approval on day one, and practice in a paper-trading account before risking real money.
Which online broker is easiest to use?
E*TRADE is the easiest I've used — I place every trade from the Power E*TRADE mobile app. In fairness, most major brokers are now similarly user-friendly.
What happened to TD Ameritrade and thinkorswim?
TD Ameritrade no longer exists as a separate broker — it was fully absorbed by Charles Schwab. Its well-known thinkorswim platform (including the paperMoney practice account) now lives at Schwab, so if you're comparing "Tastytrade vs. TD Ameritrade," the modern comparison is Tastytrade vs. Schwab.
Is Schwab good for beginners?
Yes — Schwab is very good for beginners, especially now that it includes thinkorswim and its free paperMoney practice account. There isn't much difference between the established major brokers.
What's the best broker for trading options spreads?
Any broker in my comparison table handles vertical spreads well. What matters more is your approval level (spreads usually require a mid-tier options approval) and your account type — spreads are especially capital-efficient in a margin account, which I explain in my margin vs. cash account guide.
What's the best online broker for non-US residents?
Interactive Brokers — it has the widest international availability and very low costs, at the price of a steeper learning curve.
Can I really negotiate my brokerage commissions?
Yes. With a meaningful account (roughly $100,000+), most brokers will negotiate your per-contract rate or offer a cash incentive — but only if you call and ask. I negotiated E*TRADE down to $0 base and 10 cents per contract this way.
Do I need approval to sell naked options?
Yes — selling naked options requires the highest options approval level at every broker, and some will ask you a questionnaire first. Request it when you open the account. Tastytrade is generally the easiest place for smaller accounts to get approved.
Is Robinhood good for options trading?
Not if you're serious about it. Robinhood doesn't permit selling naked options and its design encourages buying them — the low-probability side of the market. Read my full breakdown: Is Robinhood Safe?
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