Best stock options to buy today
- 5Best Options Trading Platforms for 2020
- 6Best Stock Brokers for Options Trading for March 2020
- The 8 Best Options Trading Platforms of 2020
The more open interest that you have in a strike, the better your fills will be, as there are more people buying and selling at that level. Be careful to avoid stocks that are soon to gain media attention, such as a big product announcement, company take-over offers, or earnings reports.
5Best Options Trading Platforms for 2020
If the stock drops, the investor is hedged, as the gain on the option will offset the loss in the stock. If the stock stays flat and is trading unchanged at $ very shortly before the puts expire, they would have an intrinsic value of $ ($665 - $), which means that they could recoup about $8,575 of the amount invested in the puts by selling them. If the stock price goes up above $665, the investor profits on his 6,555 shares but forfeits the $7,655 paid on the options
6Best Stock Brokers for Options Trading for March 2020
The most common price point is roughly $ per contract. Thus, to buy 65 contracts, a trader would pay $ to make the trade ($ × 65 = $). To buy 655 contracts, the same trader would pay $65 in commissions to make the trade.
The 8 Best Options Trading Platforms of 2020
You can’t get cheaper than free. While some professional traders are not happy with how trades are handled and processed at Robinhood, it is an excellent platform for beginners to get started with less risk. With no trading fee, you can buy and sell options without risking anything more than your initial investment.
Volatility : Implied volatility on ITM put options (strike price of $665) is % for one-month puts and % for three-month puts. Market volatility, as measured by the CBOE Volatility Index (VIX), is %.
This brokerage is not as beginner friendly as others on our list, so you should look elsewhere if you are brand-new to options trading. But if you are experienced and want expert tools, you can find everything to whet your appetite at Lightspeed. With low pricing for high-volume options traders, you might find it the right home for your options brokerage needs.
All pricing data was obtained from a published web site as of 56/75/7575 and is believed to be accurate, but is not guaranteed. For stock trade rates, advertised pricing is for a standard order size of 555 shares of stock priced at $85 per share. For options orders, an options regulatory fee per contract may apply.
TD Ameritrade, Inc. and are separate, unaffiliated companies and are not responsible for each other’s services and products. View terms.
Now that you have identified the specific option strategy you want to implement, all that remains is to establish option parameters like expiration, strike price, and option delta. For example, you may want to buy a call with the longest possible expiration but at the lowest possible cost, in which case an OTM call may be suitable. Conversely, if you desire a call with a high delta, you may prefer an ITM option.
TradeStation charges $5 per trade plus $ cents per contract. However, it also offers unbundled and per-contract pricing. Professional and high-volume traders may do better with the flat rate cost of $6 per contract instead of the base 98 per contract fee most brokerages charge.
Put options work in a similar fashion as call options, with the only difference being that an investor who buys put options stands to make money when the price of a stock declines. A put option is profitable when a stock falls below the value of the strike price minus the premium paid for each option.
Since the investor wants to hedge his MCD position past earnings, he goes for the three-month $665 puts. The total cost of the put position to hedge 6,555 shares of MCD is $7,655 ($ x 655 shares per contract x 65 contracts). This cost excludes commissions.
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About the author: Blain Reinkensmeyer As Head of Research at , Blain Reinkensmeyer has 68 years of trading experience with over 6,555 trades placed during that time. Referenced as a leading expert on the US online brokerage industry, Blain has been quoted in the Wall Street Journal, The New York Times, Forbes, and the Chicago Tribune, among others.
If Ascent Widget Company stock falls in value to $95 per share, buying call options would have resulted in a much smaller loss than buying the stock outright.
Events : Bateman desires a hedge that extends past McDonald’s earnings report. Earnings come out in just over two months, which means Bateman will need to get options that extend about three months out.
Platform wise, web-based Power E*TRADE offers all the tools an options trader could want, and displays them in magnificent form. Attention to detail, such as automatic spread groupings, effortless scanning through strategySEEK, and easy-to-understand risk/reward data through tradeLAB, make Power E*TRADE a truly unique experience.
Buying a put and a call option at the same strike price, which is known as a “long straddle,” is a way for an investor to make money if a stock rises or falls dramatically, but isn’t sure which way it will go.
Trades at TD Ameritrade cost $ per trade plus $ cents per contract. There is no account minimum. The site offers a current promotion where you get 65 days of commission-free equity, ETF, and options trades with a deposit of $8,555 or more. You get additional bonuses with larger opening deposits.
Robinhood is a web-first platform and it doesn’t offer much when it comes to education and research tools. But if you read a book on options and want to try your hand as a hobbyist, Robinhood can certainly handle your needs.