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The All-time
Options Trading Platforms
in Canada 2022
-
Craig Sebastiano
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July 5, 2022
Many consider options to be a more advanced investment strategy without requiring the utilize of as much money. Nonetheless, they’re not suitable for investing rookies or those that have only bought common funds.
Investors volition desire the best options trading platform to brand their trades, and there are several brokerage choices.
In this Wealth Rocket article, we’ll provide a review of the best options trading platforms in Canada and a primer on options and the basics of trading them.
Table of Contents
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The All-time
Options Trading Brokerages
in Canada for 2022
Looking for the best options brokerage? These are six brokerages we consider to offer the all-time options trading platforms.
1. Questrade
Questrade offers trading on its four platforms: Questrade Trading (its website, besides called a desktop platform), the Questrade app, Questrade IQ Edge, and Questrade Global. Beginners should probably stick to Questrade Trading and the app because they’re less complicated.
It’s very easy to make a trade on the website. However, the Questrade app doesn’t have the best reviews. Information technology has ane.nine stars out of five on the App Store and 2.three stars out of v on Google Play. Users have complained about the app being buggy, slow, or freezing on them.
Options trading commissions are $9.95 per trade plus $1 per contract. Active traders pay $four.95 per trade plus $0.75 per contract if they choose a stock-still plan or $vi.95 per trade plus $0.75 per contract if they choose a variable plan.
However, you lot need to become an advanced data package that costs $89.95 a month to authorize for active trader pricing. Trading commissions on American exchanges price the same, simply they’re in U.S. dollars.
If you want to trade options (or stocks for that thing), you lot demand at to the lowest degree $1,000 in your account before yous can make any trades. This might be a deterrent to some beginner investors. But there is the pick to get a practice business relationship.
Outset investing today with a costless $l in gratis trades for whatsoever account activation of $one,000 or more.
2. CIBC Investor’southward Edge
CIBC Investor’s Edge has simply two trading platforms: the Investor’s Border website and the CIBC Mobile Wealth app. At that place are no avant-garde trading platforms.
The site is easy to use, while the app has somewhat average reviews. Information technology has 3.3 stars out of 5 on the App Store and 3.5 stars out of 5 on Google Play. The app is also for those with Wood Gundy, Imperial Investor Services, or Private Investment Counsel accounts.
Options trading commissions are $vi.95 per trade plus $1.25 per contract. For students (who demand to have a CIBC Smart Account for students), commissions are $v.95 per trade plus $ane.25 per contract. And active traders (who make 150 or more trades every quarter) pay $4.95 per trade plus $1.25 per contract. Commissions for trades on American exchanges are the aforementioned but in U.Southward. dollars.
There aren’t any business relationship minimums to begin trading, and CIBC provides easy-to-follow instructions on making an options merchandise.
iii. Interactive Brokers
Interactive Brokers has three trading platforms: Client Portal (its website), Trader Workstation, and IBKR Mobile (its app). Beginners should utilize the Interactive Brokers Customer Portal or the app.
The website isn’t hard to employ, and making a merchandise is quite simple. The app has fairly good reviews, with 3.eight out of 5 stars on the App Store and three.5 out of 5 stars on Google Play.
Commissions are quite low compared to its competitors. They start at $1.25 per contract with a minimum $1.50 charge per guild for less than 10,000 trades per month. The commission is $1.15 per contract for 10,001 to 50,000 trades a month, $i.05 per contract for 50,001 to 100,000 trades per month, and $1 per contract when you make more than 100,000 trades a month. But there’s notwithstanding a minimum accuse of $i.50.
For trading on American exchanges, the commissions are USD $0.25 to $0.65 per contract, depending on the choice’southward price for less than 10,000 trades a month. The minimum charge is USD $i. The more contracts you trade, the lower the commissions. They can be as depression as $0.xv when you trade more than than 100,000 contracts a month.
There isn’t an account minimum to begin trading.
four. Qtrade
Not to be dislocated with Questrade, Qtrade has two trading platforms: its website and the mobile app. It doesn’t offer an advanced trading platform.
The website is intuitive, and it’s easy to brand a merchandise. However, the app has below-average reviews with 2.4 out of 5 stars on both the App Store and Google Play. Some of the reviewers annotation that the app is slow, has a clumsy interface, and has trouble logging in.
Regular investors have to pay a trading committee of $8.75 plus $1.25 per contract. Those who make at to the lowest degree 150 trades every quarter or take $500,000 or more in assets pay $vi.95 per trade plus $1.25 per contract. The commission for trades on an American substitution is in U.S. dollars.
There isn’t a minimum corporeality required to start investing, and yous can sign up for a practice account.
Almost $500 in commission costless trades. Atmospheric condition apply. Offering ends August 31st, 2022
five. Scotia iTrade
Scotia iTrade offers 4 different trading platforms: Scotia OnLine, Scotia iTrade Trading Desk, Scotia iTrade FlightDesk, and the Scotia iTrade mobile app. Scotia OnLine and the app are all-time for beginners.
The site is easy to use and making a merchandise is straightforward. The app is only for trading, but the reviews aren’t very good. It has 1.iv out of 5 stars on the App Shop and 1.6 out of 5 stars on Google Play. Users have complained almost not existence able to log in and that the app is slow or that information technology tends to crash.
The regular commission for options trades is $9.99 per trade plus $1.25 per contract. For those that make 150 or more trades each quarter, the commission is $4.99 per trade plus $1.25 per contract. For trades on American exchanges, the commissions are the aforementioned but in U.S. dollars.
In that location’s no minimum to invest, and at that place are several investment education resource offered through iTrade U. Yous don’t fifty-fifty demand to take an account. But if you want to trade for free, you tin can sign up for a practice business relationship.
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6. TD Straight Investing
TD Straight Investing offers options trading on four unlike platforms: WebBroker (the regular website), the TD app, Advanced Dashboard, and thinkorswim. For beginners, WebBroker and the app are probably the easiest manner to get started. The thinkorswim platform is for U.S. options trading only.
The website is simple to use, and trading is a breeze. The app is for both trading and banking, and has fairly practiced reviews on both the App Store (four.v out of v stars) and Google Play (four.3 out of five stars). Since the app is for more than but trading, it’southward difficult to tell how many good reviews are specifically for its trading features.
The standard commission for options trading is $ix.99 per merchandise plus $i.25 per contract. Active traders (150 or more trades per quarter) pay $seven per merchandise plus $one.25 per contract. Commissions are the same for trades made on American exchanges, except they’re in U.Due south. dollars.
There’s no minimum to invest. At that place are too investment education resources equally well as live and on-demand webinars, which are available for gratis—even if y’all’re not a client.
Comparing
Options Trading Brokerages
| Account Minimum | Fees | Account Types | |
|---|---|---|---|
| Questrade |
|
special pricing bachelor |
RIF, LIF, LIRA, Individual Margin, Joint Margin, RESP, Family RESP, Private Forex and CFDs, Joint Forex and CFDs, Corporate Entity, Individual Informal Trust, Joint Informal Trust |
| CIBC Investor’s Edge |
|
special pricing available |
LIRA, LRIF, PRIF, Cash Account, Margin Account, Corporate or Partnership Account, Investment Club, Formal Trust, Estate |
| Interactive Brokers |
|
|
Individual, Joint, Breezy Trust, Formal Trust, RRSP, Spousal RRSP, TFSA, Advisor Accounts |
| Qtrade |
|
special pricing for frequent traders |
|
| Scotia iTrade |
|
with discounted rates for frequent traders |
|
| TD Direct Investing |
|
agile traders become discounted rates |
RDSP, President’s Account |
What are
Options?
Options are contracts that requite the owner the right—but not the obligation—to buy or sell an underlying nugget at a stock-still price for a specific time. While at that place are options for various types of assets, such as currencies and oil, we will focus on equity options.
Options tin can be bought and sold just like stocks, and an equity choice contract is typically equal to 100 shares. Options are generally used to increment leverage, generate income, improve flexibility, or reduce gamble.
In Canada, options trading occurs on the Montreal Substitution. In the United States, options trading happens on many different exchanges.
Virtually online brokers volition allow you to trade options listed on both Canadian and American exchanges.
What is an
Options Trading Platform?
An options trading platform is operated by an online brokerage. It’s similar to a stock trading platform, except it’south for trading options. Online brokers offer various trading tools to the regular options trader too as active traders who might exist involved in solar day trading. Some brokers may offer higher levels of customer service depending on the trading platform you utilise or the amount of assets you lot accept. Some may also offer free trading for stocks and lower commissions on both stock trades and options. To become started, you lot must open an account.
How Do
Options
Work?
An option is a contract between a heir-apparent (known equally the holder) and a seller (known as the writer). The holder pays a premium (the price of the option) to the writer in club to enter the contract. Nether the terms of the contract, the holder has the correct to buy or sell the shares at a predetermined price (known as the strike price).
There are 2 types of disinterestedness options: call and put options. With a telephone call option, the holder has the right to buy the stock at the strike toll and expects the value of the stock to rise. The author, who expects the value of the stock to stay the same or decline, must sell the stock at the strike price if the holder wants to exercise their right to buy.
With a put selection, the holder has the correct to sell the stock at the strike price and expects the value of the stock to decline. The writer, who expects the value of the stock to stay the same or to rise, must buy the stock at the strike cost if the holder wants to practise their right to sell.
Allow’s use an instance to illustrate how a merchandise works:
On December ane, Company Ten is trading at $67 and the premium for a Feb lxx call is $3.xv.
February is when the selection expires (options typically expire on the third Friday of the month) and 70 is the strike price, which is $70.
If you purchase one call option contract, the full cost is $315 ($3.15 x 100). For this case, we’ll ignore commissions, just it’southward something to keep in heed when trading.
The stock must trade above $70 before the choice is worth annihilation, but your breakeven price is $73.15 because you paid $three.15.
Let’s assume that by Dec. 22, the stock has jumped to $78. That ways the value of the choice has also increased. Information technology’s now trading at $viii.25 and the option contract is now worth $825 ($8.25 10 100). Since you paid $315 ($3.15 10 100), you now have a turn a profit of $510 [($viii.25 – $3.fifteen) x 100].
At this point, you tin sell the option and accept the profit, which is called closing your position. Or yous can promise the stock will keep rising and hold on.
The adjacent day, the stock starts dropping and eventually falls below $lxx. Information technology stays below that level right up to the expiration date. Now the option is worthless because it’s below the $70 strike price and y’all didn’t sell. That means you’ve lost your entire investment of $315.
What’south the Departure Between
Options Trading
and
Stock Trading?
When you lot buy a stock, you lot’re buying a piece of a company. When you merchandise options, you take the right to buy or sell that company’south stock. With options, you as well take the opportunity to make a college render with a smaller corporeality of money.
Let’southward assume you lot purchase 100 shares of Company X for $67. Your full cost before commissions is $six,700. If the stock rises to $78 and yous sell at that price, yous accept a total profit of $1,100 or a return of 16.4%.
Returning to the example above, you can besides buy one Feb 70 call selection for $315 ($3.15 x 100). If the option rises to $eight.25 as a result of the stock hitting $78, you can sell the option and accept a total profit of $510 [($8.25 – $3.fifteen) ten 100]. That’s a return of 161.9%. While you don’t make as much of a profit, you make a greater percent return with a much smaller investment.
The one thing that is common between options and stock trading is that you need to have a brokerage account.
How To Compare
Options Trading Platforms
Before you choose an options trader, y’all should accept a close await at fees, committee structures, and specific features. As y’all know, options trading is an advanced form of investments, so if you’re new you’ll want to choose a platform that offers aplenty customer back up and an in-depth resource library. Ultimately, choosing an options trader comes down to a personal preference, so if you discover an interface you like, that’south as adept of a reason as any to brand your selection.
Our Final Thoughts
Each of the brokerages offers something different for everyone. The all-time options trading platform is likely the one that yous’re the most comfortable with in terms of user experience, reliability, and, most of all, pricing and commission rates.
Oft Asked
Questions
It depends. Investing in stocks or options each take their own risks. Buying one stock is riskier than buying a number of stocks in a multifariousness of industries.
Options are more complicated than stocks and there are diverse options strategies that are riskier than others. If you know what you lot’re doing, options can sometimes be safer than investing in stocks.
Information technology’s possible to go a higher per centum return with options.
For example, if you buy 100 shares of Company Ten at $67 each (for an investment of $6,700) and the stock toll increases to $78, that’s a gain of $ane,100 or xvi.4%.
But if you buy one Visitor X call option for $3.15 and the value of the selection increases to $8.25 (because the stock rose to $78), that’south a gain of $510 or 161.9%.
The all-time trading platform for beginners will depend on what y’all’re looking for in an online brokerage.
The brokerage that offers the lowest commissions doesn’t e’er hateful it’s the best platform.
What you lot will want is a platform that’s piece of cake to utilise and brokerage that doesn’t charge loftier commissions. Many of the brokerages that are reviewed in this article offer a combination of both.
Related
Round Upwardly
Reviews
Source: https://www.wealthrocket.com/investing/best-options-trading-platforms-canada/
