Broker Recommendation for Beginner Options Trader

Discussion in 'Prop Firms' started by frcrilly, Dec 30, 2009.

  1. frcrilly


    Hi All,

    I’m starting out in options trading (specifically Bear Call and Bull Put Spreads) and I’m looking for a broker that meets certain requirements (see below). I have no idea where to start in relation to a broker and would appreciate being pointed in the right direction by people experienced in this area.

    Any help would be greatly appreciated.

    Thanks In Advance for all responses


    1.Low commission for small traders

    I envisage that I’ll be starting out with capital for trades of as little of €1000. For this reason I’ll want a broker who targets to facilitate the small trader and has small commissions to go with it.

    2. Small out of the money trading strategies

    I envisage I’ll be trading options where the current stock price is considerably distant and out of the money from the option strike price, hence the options may have very low values. I will want a broker who allows one as best as possible to partake in these low value option opportunities.

    3. Ability to input large “Order Cancels Order” texts.

    I envisage that on any one day I will want to incept one trade from a large list of potential trades. For this reason I would like to be able to place a sizable “Order Cancels Order” (eg consisting of 20 Bear Call Spreads for 20 different stocks. At the point at which one order fills, I will want the other 19 to cancel).
  2. First, you're in the wrong forum - should be in retail broker or options section (Don't repost; Mod may move thread for you).

    Second, thinkorswim (tos) or interactivebrokers (IB) may serve you well (you didn't specify if you were US-based?).

    tos has slightly higher commish than IB, but tos will hold your hand for you as you get started. With IB you will be on your own.

    Both brokers will do #1, #2, and #3 for you. However on #3, I wouldn't try to fire off 20 OCO orders. Sometimes the orders fill so fast I've had 2 (out of 2 or 3) OCO's get taken (too fast to get cancel off on other order(s) - read the fine print - it's your postiion when this happens).

    I'd HIGHLY recommend STARTING with tos (I've used both).

    Good luck, trade small (and not naked), and shoot for breakeven at first.
  3. korvus


    I agree with tos. I've used them for years, and even though I feel like I have enough experience that I don't need their hand-holding anymore, I stick with them because of their stellar support (technical and trading) and their focus on education and risk-management. I'd really recommend them to anyone but the most hard-core traders.