Options Trading
It is important to understand the basics of trading options before entering the market. Speculating on this type of derivative is popular with traders in the UK, offering access to stocks, indices and commodities, among other assets. In this guide to trading options, we look at strategies for beginners, how to find and capitalise on live opportunities, plus tips for getting started. We also list the best brokers and platforms for trading options in 2025.
Brokers with Options Trading
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Founded in 1989, CMC Markets is a reputable broker publicly listed on the London Stock Exchange. It holds authorisation from top-tier regulators such as the FCA, ASIC, and CIRO. The brokerage, which has received multiple awards, boasts a global membership exceeding one million traders.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, ETFs, Treasuries, Custom Indices, Spread Betting FCA, ASIC, MAS, CIRO, BaFin, FMA, DFSA Web, MT4, TradingView Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 (Retail), 1:500 (Pro) -
Founded in 1974, IG is a part of IG Group Holdings Plc, a publicly listed brokerage (LSE: IGG). The company provides spread betting, CFD, and forex trading, offering access to over 17,000 markets. Its platforms and investing apps are notably user-friendly. Over the past 50 years, IG has consistently been an industry leader, excelling in all essential areas for traders.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFM Web, ProRealTime, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentral, ProRealTime Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 (Retail), 1:222 (Pro) -
Established in 1999, FOREX.com is now integrated into StoneX, a prominent financial services entity catering to more than one million clients globally. The broker is regulated in numerous jurisdictions, including the US, UK, EU, and Australia. It offers a vast array of markets beyond forex, delivering competitive pricing on state-of-the-art trading platforms.
Instruments Regulator Platforms Forex, CFDs, Stock CFDs, Indices, Commodities, Futures, Options, Crypto NFA, CFTC, CIRO, FCA, CYSEC, ASIC, SFC, FSA, MAS, CIMA WebTrader, Mobile, MT4, MT5, TradingView Min. Deposit Min. Trade Leverage $100 0.01 Lots 1:30 -
Founded in 2001, easyMarkets has earned a reputation as a reliable fixed spread broker. With continuous advancements, it distinguishes itself in the market. The firm has integrated the MetaTrader suite and TradingView, and enhanced unique risk management tools such as dealCancellation.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Crypto CySEC, ASIC, FSCA, FSC, FSA easyMarkets App, Web Platform, MT4, MT5, TradingView, TradingCentral Min. Deposit Min. Trade Leverage $25 0.01 lots 1:2000 -
Founded in 2008 and based in Israel, Plus500 is a leading brokerage with over 25 million registered traders across more than 50 countries. It focuses on CFD trading, offering a user-friendly proprietary platform and mobile app. The company provides competitive spreads and does not impose commissions or charges for deposits or withdrawals. Plus500 stands out as a highly trusted broker, licensed by respected authorities such as the FCA, ASIC, and CySEC.
Instruments Regulator Platforms CFDs on Forex, Stocks, Indices, Commodities, ETFs, Options FCA, ASIC, CySEC, DFSA, MAS, FSA, FSCA, FMA, EFSA WebTrader, App Min. Deposit Min. Trade Leverage $100 Variable 1:30 -
Founded in 1983, City Index is a prestigious broker, now under the Nasdaq-listed StoneX Group. It excels in forex, CFDs, and spread betting. With access to over 13,500 instruments, City Index provides a dynamic Web Trader platform, exceptional educational materials, and round-the-clock support five days a week, ensuring a thorough trading experience.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Crypto, Futures, Options, Bonds, Interest Rates,ETFs,Spread Betting FCA, ASIC, CySEC, MAS Web Trader, MT4, TradingView, TradingCentral Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 -
Spreadex, regulated by the FCA, provides spread betting across 10,000+ CFD instruments, including 60 forex pairs. Traders have the option to engage in short-term positions on sporting events as well. With a history exceeding 20 years, the company has earned numerous accolades.
Instruments Regulator Platforms Forex, CFDs, Indices, Commodities, Stocks, Crypto, Bonds, Interest Rates, ETFs, Options, Spread Betting FCA Spreadex Platform, TradingView, AutoChartist Min. Deposit Min. Trade Leverage £0 £0.01 1:30
CMC Markets
IG Index
Forex.com
easyMarkets
Plus500
City Index
SpreadexSafety Comparison
Compare how safe the Options Trading are and what features they offer to protect traders.
| Broker | Trust Rating | FCA Regulated | Negative Balance Protection | Guaranteed Stop Loss | Segregated Accounts |
|---|---|---|---|---|---|
| CMC Markets | ✔ | ✔ | ✔ | ✔ | |
| IG Index | ✔ | ✔ | ✔ | ✔ | |
| Forex.com | ✔ | ✔ | ✘ | ✘ | |
| easyMarkets | ✘ | ✔ | ✔ | ✔ | |
| Plus500 | ✔ | ✔ | ✔ | ✔ | |
| City Index | ✔ | ✔ | ✔ | ✔ | |
| Spreadex | ✔ | ✔ | ✘ | ✔ |
Payments Comparison
Compare which popular payment methods the Options Trading support and whether they have trading accounts denominated in British Pounds (GBP).
| Broker | GBP Account | Debit Card | Credit Card | Neteller | Skrill | Apple Pay |
|---|---|---|---|---|---|---|
| CMC Markets | ✔ | ✔ | ✔ | ✘ | ✘ | ✘ |
| IG Index | ✔ | ✔ | ✔ | ✘ | ✘ | ✘ |
| Forex.com | ✔ | ✔ | ✔ | ✔ | ✔ | ✘ |
| easyMarkets | ✔ | ✔ | ✔ | ✘ | ✘ | ✘ |
| Plus500 | ✔ | ✔ | ✔ | ✘ | ✔ | ✔ |
| City Index | ✔ | ✔ | ✔ | ✘ | ✘ | ✘ |
| Spreadex | ✔ | ✔ | ✔ | ✘ | ✘ | ✘ |
Mobile Trading Comparison
How good are the Options Trading at mobile trading using apps or other mobile interfaces.
| Broker | Mobile Apps | iOS Rating | Android Rating | Smart Watch App |
|---|---|---|---|---|
| CMC Markets | iOS & Android | ✘ | ||
| IG Index | iOS & Android | ✔ | ||
| Forex.com | iOS & Android | ✘ | ||
| easyMarkets | iOS & Android | ✘ | ||
| Plus500 | iOS, Android & Windows | ✘ | ||
| City Index | iOS & Android | ✘ | ||
| Spreadex | iOS & Android | ✘ |
Beginners Comparison
Are the Options Trading good for beginner traders, that might want an affordable setup to get started, along with good support and educational resources?
| Broker | Demo Account | Minimum Deposit | Minimum Trade | Support Rating | Education Rating |
|---|---|---|---|---|---|
| CMC Markets | ✔ | $0 | 0.01 Lots | ||
| IG Index | ✔ | $0 | 0.01 Lots | ||
| Forex.com | ✔ | $100 | 0.01 Lots | ||
| easyMarkets | ✔ | $25 | 0.01 lots | ||
| Plus500 | ✔ | $100 | Variable | ||
| City Index | ✔ | $0 | 0.01 Lots | ||
| Spreadex | ✘ | £0 | £0.01 |
Advanced Trading Comparison
Do the Options Trading offer features that allow for more advanced trading strategies?
| Broker | Automated Trading | Pro Account | Leverage | VPS | AI | Low Latency | Extended Hours |
|---|---|---|---|---|---|---|---|
| CMC Markets | Expert Advisors (EAs) on MetaTrader | ✔ | 1:30 (Retail), 1:500 (Pro) | ✔ | ✘ | ✔ | ✔ |
| IG Index | Expert Advisors (EAs) on MetaTrader, build your own on ProRealTime | ✔ | 1:30 (Retail), 1:222 (Pro) | ✔ | ✘ | ✔ | ✔ |
| Forex.com | Expert Advisors (EAs) on MetaTrader | ✘ | 1:30 | ✔ | ✔ | ✔ | ✘ |
| easyMarkets | Expert Advisors (EAs) on MetaTrader | ✘ | 1:2000 | ✘ | ✘ | ✘ | ✘ |
| Plus500 | ✘ | ✘ | 1:30 | ✘ | ✘ | ✘ | ✘ |
| City Index | Expert Advisors (EAs) on MetaTrader | ✔ | 1:30 | ✘ | ✔ | ✔ | ✔ |
| Spreadex | ✘ | ✔ | 1:30 | ✘ | ✘ | ✔ | ✔ |
Detailed Rating Comparison
Use this heatmap to compare our detailed ratings for all of the Options Trading.
| Broker | Trust | Platforms | Mobile | Assets | Fees | Accounts | Support | Research | Education |
|---|---|---|---|---|---|---|---|---|---|
| CMC Markets | |||||||||
| IG Index | |||||||||
| Forex.com | |||||||||
| easyMarkets | |||||||||
| Plus500 | |||||||||
| City Index | |||||||||
| Spreadex |
Our Take On CMC Markets
"Equipped with advanced charts and a broad array of tradable CFDs, including an unmatched selection of currencies and bespoke indices, CMC Markets offers an excellent online platform for traders at any level."
Pros
- The CMC web platform offers an exceptional user experience with sophisticated charting tools for trading and customisable options, suitable for both novice and seasoned traders. It supports MT4 but not MT5, and TradingView will be available from 2025.
- We've upgraded the 'Assets & Markets' rating due to frequent product enhancements in early 2025. These include extended trading hours for US stocks and the introduction of new share CFDs.
- CMC Markets is well-regulated by respected financial authorities, ensuring a secure and reliable trading environment. It upholds a strong reputation, providing traders with confidence.
Cons
- Trading stock CFDs comes with a relatively high commission, particularly when compared to low-cost brokers such as IC Markets.
- The CMC Markets app provides a comprehensive trading package; however, its design and user experience lag behind market leaders such as eToro.
- Although there have been improvements, the online platform still needs further refinement to match the user-friendly trading experience offered by competitors such as IG.
Our Take On IG Index
"IG offers a complete package with an intuitive online platform, top-tier beginner education, advanced charting tools through its TradingView integration, real-time data, and swift execution for seasoned traders."
Pros
- IG provides a wide range of professional and engaging educational materials, such as webinars, articles, and analyses, tailored for traders.
- The web-based platform supports traders at every level, offering advanced charting tools and real-time market data vital for trading. Additionally, IG now includes TradingView integration.
- IG stands out with its extensive range of instruments, offering stocks, forex, indices, commodities, and cryptocurrencies. Additionally, it has recently introduced US-listed futures and options, along with an AI Index. These options enhance opportunities for diversification in trading.
Cons
- In the UK and EU, negative balance protection is available. However, US clients lack account protection and guaranteed stop losses.
- IG has ended its swap-free account, diminishing its attractiveness to Islamic traders.
- IG imposes a monthly inactivity fee of $12 after two years, discouraging occasional traders.
Our Take On Forex.com
"FOREX.com excels in serving traders of all levels, offering more than 80 currency pairs, spreads starting at 0.0 pips, and competitive commissions. Its robust charting platforms provide over 100 technical indicators and comprehensive research tools."
Pros
- An abundance of educational resources is available, such as tutorials, webinars, and an extensive YouTube channel, designed to enhance your understanding of financial markets.
- With more than two decades of expertise, strong regulatory governance, and numerous accolades, including a second-place finish in our 'Best Forex Broker' awards, FOREX.com is globally renowned as a reliable trading platform.
- The in-house Web Trader remains a standout platform, excellently crafted for budding traders. It features a sleek design and offers more than 80 technical indicators for thorough market analysis.
Cons
- Although FOREX.com has expanded its range of instruments, its product offering is confined to forex and CFDs. Consequently, there are no investment options for actual stocks, ETFs, or cryptocurrencies.
- FOREX.com's MT4 platform provides around 600 instruments, a notable reduction compared to the more than 5,500 options on its other platforms.
- Demo accounts are typically limited to 90 days, hindering effective strategy testing.
Our Take On easyMarkets
"easyMarkets offers fixed spreads from 0.7 pips, ideal for new traders needing predictable costs. With a Bitcoin-based account available, it's also a top choice for crypto-focused traders wishing to trade, deposit, and withdraw in digital currencies."
Christian Harris
Reviewer
Pros
- In 2019, easyMarkets introduced Bitcoin as a base currency. This distinguished the platform from much of the market by removing the necessity to convert cryptocurrencies into fiat money. Consequently, conversion fees are lowered, and it simplifies administration for traders focusing on cryptocurrencies.
- Having over two decades of experience, numerous accolades, and authorization from two top-tier regulators, easyMarkets consistently upholds its reputation as a reliable broker for active traders.
- easyMarkets prioritises risk management by offering negative balance protection and guaranteed stop losses. In 2024, its dealCancellation feature on the Web Trader was improved to allow for cancellation periods of 1, 3, or 6 hours.
Cons
- easyMarkets lacks a zero-spread account, unlike Pepperstone, which may disadvantage traders and high-frequency traders needing low transaction costs.
- easyMarkets delivers solid educational resources tailored for beginners, though it doesn't quite meet the needs of seasoned traders. The Academy presents well-structured courses with interactive gamification, yet the content is somewhat superficial.
- easyMarkets is lagging due to the absence of copy trading features found at industry leader eToro. These features are highly sought after by novices wishing to emulate strategies of seasoned traders.
Our Take On Plus500
"Plus500 provides a seamless experience for traders with its CFD platform, featuring a sleek design and interactive charting. However, its research tools are basic, fees are higher than the most economical brokers, and its educational resources could be improved."
Pros
- In 2025, Plus500 expanded its range of share CFDs to include emerging sectors such as quantum computing and AI. This update opened up trading opportunities in stocks like IonQ, Rigetti, Duolingo, and Carvana.
- The broker provides commission-free trading across a variety of markets, reducing extra charges and attracting experienced traders.
- Plus500 has expanded its range of short-term trading instruments by adding VIX options, which feature increased volatility. Additionally, it has extended trading hours for seven stock CFDs.
Cons
- Compared to competitors like IG, Plus500 offers limited research and analysis tools.
- The lack of social trading features prevents users from copying trades made by seasoned traders.
- Algorithmic trading and scalping are not available, potentially deterring certain traders.
Our Take On City Index
"City Index suits active traders perfectly, offering rapid execution speeds averaging 20ms and a customisable web platform with over 90 technical indicators. Its educational resources are exceptional. For UK traders interested in spread betting on 8,500+ instruments tax-free, City Index is an excellent option."
Pros
- City Index is under the regulation of leading authorities, such as the FCA in the UK, ASIC in Australia, and MAS in Singapore. Its parent company, StoneX Group Inc., is publicly listed, which enhances its credibility.
- City Index offers adaptable trading platforms suited to every expertise level. For newcomers, the Web Trader platform is straightforward and user-friendly. For more in-depth analysis and automated features, MetaTrader 4 (MT4) and TradingView are supported, providing a comprehensive trading experience for all traders.
- City Index offers access to over 13,500 markets, including forex, indices, shares, commodities, bonds, ETFs, and interest rates. The platform's inclusion of niche markets such as interest rates provides traders with unique opportunities not commonly available on other platforms.
Cons
- City Index does not offer an Islamic account with swap-free conditions, making it less attractive to Muslim traders than brokers such as Eightcap and Pepperstone.
- Unlike brokers like AvaTrade and BlackBull, City Index lacks options for passive trading, such as social copy trading or real ownership of stocks and ETFs. This limitation may reduce its appeal to traders seeking a more hands-off approach.
- Although many brokers, such as eToro, have broadened their crypto offerings, City Index restricts its clients to crypto CFDs. This limited selection may not meet the needs of traders seeking a wider variety of altcoins.
Our Take On Spreadex
"Spreadex attracts UK traders keen on spread betting in financial markets and traditional sports wagers. It offers low fees for short trades, and spread bet profits are tax-free. With a robust charting platform and no minimum deposit, it's easy to begin."
Pros
- The broker provides a user-friendly custom charting platform and mobile application.
- Spreadex offers UK traders the chance to earn tax-free profits via spread betting.
- Traders can place wagers on sporting events directly through their brokerage accounts.
Cons
- The absence of a demo account may dishearten potential clients wishing to evaluate Spreadex's offerings.
- Third-party e-wallets are not permitted.
- Limited customer support may lead to delays in resolving issues.
Trading Options Explained
An options trading contract is a legal and binding agreement between a trader and a broker that permits the trader to buy or sell an asset at a pre-agreed time and price. For example, trader X wants the option to buy 10 shares in BP at £450 per share at the end of the month.
The buyer has the right to exercise the options contract but is not compelled to do so (a key difference versus futures). The seller is obligated to meet the transaction terms of the contract if the option is exercised before or on the expiration day.
Importantly, the buyer will pay a premium for the right to exercise the options contract. This cost will depend on the price of the asset and its intrinsic and extrinsic value – the difference between the contract’s strike price and the current price of the asset.
An investor trading options will use calls when buying an asset and puts when selling an asset. Standard options contracts are also known as ‘vanilla options’.
Options trading ultimately allows investors to take positions on:
- A rise or fall in the current value of an asset
- The extent to which an asset’s price will rise or fall
- When these price fluctuations will take place
Trading Options At AvaTrade
How Does Trading Options Work?
Options contracts are derivatives which means they derive their value from an underlying asset. Underlying assets can span various markets, from FTSE-listed stocks and precious metals like gold to forex pairs with the GBP.
Both retail and institutional investors trade options with leverage. This means for a small capital outlay, they can take much larger positions than their cash would otherwise allow. This can significantly increase potential returns, making it a popular way to speculate on equities, for example, as opposed to directly buying and selling stocks.
Regardless of whether you are swing trading or day trading options, investors will often find the same rules and components in the products provided by online brokers. Each option requires details of the following to constitute a contract between the broker and trader:
- The underlying security
- The number of units/shares
- Type of option (put or call)
- Exercise/strike price (the price at which an option can be exercised)
- Expiration time and date (the time in which the trader can exercise the option)
Note, when you buy options, your risk exposure is normally capped to the premium you paid to take the position. However, when you sell options, your risk can be unlimited.
Example
To understand how an options trade works, let’s look at a standard stock purchase versus a leveraged options contract…
A trader has £1,000 to invest. Rolls Royce (RYCEY) stock is currently trading at £50 per share and therefore the trader can buy 20 shares. If the share price increases by 10% then each share increases to £55, taking the total portfolio value to £1,100. Excluding costs/commissions associated with the trade, the total gain from the trade is £100 (£1,100 – £1000).
Now let’s look at the potential returns if the trader buys Rolls Royce stock call options with a strike price of £50 that expires in two weeks. The shares cost £2 per share or £200 per contract (each contract holds 100 shares). With £1,000, the trader can buy five contracts or 500 shares. If the stock price increases 10% to £55 by the expiry, each contract will be worth £5 (£55 from a strike price of £50). Therefore, the total trade will be worth £2,500 on 500 shares, making a profit of £1,500.
In both examples, the amount of capital being risked is the same – £1,000. However, the key difference is that the potential profit is higher with the call options because of the leverage available.
Pros & Cons Of Trading Options
Pros
Benefits of trading options include:
- Greater Margins – Investors can make larger returns with the same capital via a margin account
- Cost Effective – The premiums for puts and calls are often cheaper than purchasing the underlying asset, making them popular with beginners
- Broad Market Access – Options contracts are available on a variety of markets, including stocks, indices, forex and commodity. This also means options contracts can be used for hedging
- Reduced Risk – Your risk exposure is often lower than directly trading the underlying asset. This is because the trader only stands to lose the premium paid for the option whereas the value of the asset bought outright could decrease significantly
Cons
There are also downsides to trading options:
- Complex – For new traders, options contracts are not the most straightforward instrument to understand. Fortunately, the best brokers offer a selection of beginner-friendly training content and free demo accounts
- Requires Active Trading – Options contracts, by definition, give traders the right to exercise the trade and therefore investors will need to keep a regular eye on their positions
- Fast Paced – Many retail trading platforms offer options contracts with short timeframes. The likelihood of an options contract spanning several months is unlikely, which may deter some retail traders
- Prices – Some brokers charge high commissions for short-term options contracts, for example weekly, versus the fees for buying stocks directly
- Taxes – UK traders may have to pay capital gains on profits
How To Start Trading Options
Comparing Brokers
Options trading is available at many top-rated brokerages. However, there are several elements to consider before opening an account:
Terms
Brokers need to remain profitable and therefore can hedge the risk of entering the contract with a trader by writing terms which will be favourable to them. This could be in the form of a high premium to enter the contract or an undesirable expiration time and date.
Trading Platform
The best platform for trading options is the one that works for you. For beginners, the platform you choose should make the basics easy to understand and enjoyable. The key things to consider are live charting functionality, technical analysis and the number of indicators available, automated and algorithmic trading opportunities, trend analysis, volume and volatility charts and historical data archives.
Some investors may also wish to trade options on a platform independent from their broker, such as TradingView.
Demo Account
Brokers who offer investors the opportunity to practice trading options under live conditions provide a significant advantage. A demo account will allow investors to enter paper trades in a simulator environment and test how strategies would have played out without risking their own capital.
The top brokerages then make it easy to switch to a real-money account when traders feel ready.
Apps For Trading Options
Nowadays it has become second nature to have access to our online life via our mobile devices. Financial trading is no different, so the top brokers provide a good quality mobile application, including IG.
Investors should be able to speculate on different stocks, options and other financial instruments while on the go. This is particularly important with options contracts as a trader may be debating whether to exercise the option or not based on current market conditions.
Deposit & Withdrawal Methods
Payment methods are also a key factor when choosing an online broker. Most leading sites will provide their customers with many different ways to fund their accounts. This could be via debit/credit cards, wire transfers, e-wallets or even deposits via cryptocurrency.
Traders should be able to find payment method information on their broker’s website before they are asked to create an account.
Fees
When deciding on a broker to start trading options through, it’s important to assess the fee structure. Most brokers will be transparent with the costs associated with trading options, meaning they should provide information regarding charges and fees before users are required to sign up. As a result, traders will be able to assess the impact on earnings and the level of margin they should expect to receive.
Trading Hours
Options contracts will normally be bound by the trading hours of the underlying asset to which they are pegged. For example, a BT stock options contract will be tradable during the London Stock Exchange’s opening hours of 8:00 AM to 4:30 PM GMT.
Note, options trading is not usually available after hours unless the underlying asset is cryptocurrency.
Security & Regulation
When risking personal funds, it’s important to feel that your capital is relatively safe. Most leading options brokers will be governed by a reputable regulatory body such as the Financial Conduct Authority (FCA).
Beginners should take extra care when registering with a broker who is not FCA regulated as there will be fewer safeguards, for example, no limits on leveraged trading products.
Other key security procedures to look out for are encryption of sensitive data, zero balance protection and policies to protect the trader’s money if the broker goes into liquidation.
Other Features
It’s also worth looking at what additional features the brokerage has to offer. Some options brokers invest heavily to enhance the trading experience for their users.
Popular additional features include margin calculators, related news stories and market bulletins, and an education centre where the broker provides tips and tutorials on how to make money from trading options.
Research & Strategy
Since trading options is popular amongst investors of all levels, including beginners, there is a range of information available online that can help daily traders gain a better understanding of the assets they’re speculating on. Users can enrol in an online trading course with an independent provider or directly at some brokers.
Traders wanting a more traditional learning path may want to purchase print-based books on the internet or in-store. Popular books include Trading Options For Dummies, which has been touted as the best book on trading options for beginners. The publication looks at the different types of options and whether you can go negative.
UK traders wishing to review tips and educational resources for free can also make use of YouTube and Reddit. Here, experienced investors and market experts provide their opinions on key topics such as how to practice investing and how to be profitable when trading options.
When choosing a strategy, consider the underlying asset’s performance, your risk appetite and how active you plan to be. For example, day or intraday trading options contracts are quite demanding. Fortunately, most strategies can be supported by software or mobile alerts to keep you aware of market updates.
All strategies should also be supported with risk management techniques like stop-loss orders which can help ensure you don’t risk more than you can afford to lose.
Note, options trading is popular amongst beginners as well as professional investors who consider market trading as their full-time jobs. As a result, there is a catalogue of market tips, advice and information on options strategies available online.
Bottom Line On Trading Options
Trading options can be low-risk and high reward. Although a complicated concept to grasp for beginners, investors can make steady returns if used correctly. Make sure to practice options trading using a demo account before risking real money. Also implement risk management tools like stop-loss orders.
Use our list of the top options trading brokers and platforms in 2025 to get started.
FAQ
What Is Options Trading?
Options traders speculate on the future price of an underlying asset. The trader has the right but is not obliged to buy or sell the security. The underlying asset could be stocks, commodities, indices, cryptocurrencies, and other popular markets – the list of supported assets varies between brokers. Importantly, clients pay a premium for the flexibility to decide whether to exercise the trade.
Is Trading Options Profitable?
Options trading can be profitable with an effective strategy and a sensible approach to risk management. Reliable market insights, competitive puts and calls, plus a tested investing system will be needed to make money in the long run.
Is Trading Options Halal?
Trading options is prohibited under Sharia Law according to some Islamic scholars. This is because of the speculation involved and the opportunities to take positions in haram industries, such as alcohol and tobacco. With that said, some market commentators believe options trading can be halal. Consult a local religious leader for guidance. Alternatively, see our guide to halal trading for more information.
Does Trading Options Count As Day Trading?
Options products can be used to day trade. Day trading is essentially the practice of opening and closing positions in the same trading session. Binary options are also popular with short-term investors, especially beginners.
Can You Make Money Trading Options?
While options traders can make decent returns, beginners should not expect to get rich quick. Discipline and a successful trading strategy will be needed. Fortunately, one benefit of trading options is that traders cannot go negative – the premium is the maximum loss an investor can encounter.