Online Stock Options Trading

| December 29, 2011 | 0 Comments

online stock options tradingThere’s no question about it… the financial world has been simplified by the integration of electronic trading.  And one of the newest innovations is the ability to trade stock options online.  It’s something that has revolutionized the options trading world.

Here’s why…

Long before computer trading became the norm, stock options were left to the world of pro traders.  Back then, floor traders screamed out numbers and used hand signals in an open-outcry system to trade stock options.

What a nightmare!

To place a trade from outside the options floor was quite difficult to say the least.    Thankfully, technical innovations have truly simplified the process.

These days, the majority of options exchanges use a blend of an open-outcry and electronic systems.  This combination of electronic exchanges and online stock option brokers enables individuals to directly interact with either the traders on the floor, or electronically.

ll you need is an online stock options brokerage account and you’re ready to go.  Here’s how an online stock option trade would be executed…

Of course, you initially log into your account.  Depending on your system, you enter your underlying stock on which you want to trade options.  You then enter the price, quantity and expiration into the appropriate boxes.  You hit send, and when your price hits, the order is electronically filled.

You’ll receive a confirmation on your computer, and maybe even email if you set your account up that way.  The whole process takes seconds…

If you’re not sure if your online broker allows options trading, you can either check out the website, or give them a quick call.

Now, if you need an online stock options broker, you can find rankings and reviews of the top brokers at Barron’s.  Here are some the brokers they gave high marks…

TradeStation (www.tradestation.com)

MB Trading (www.mbtrading.com)

Interactive Brokers (www.interactivebrokers.com)

TD Ameritrade (www.tdameritrade.com)

OptionsHouse (www.optionshouse.com)

TradeMonster (www.trademonster.com)

OptionsXpress (www.optionsxpress.com)

TradeKing (www.tradeking.com)

Category: Options Trading Basics

About the Author ()

Marcus Haber is the co-editor of Options Trading Research and boasts well over a decade of real-life options experience. Learning from some of the biggest names in the business, Marcus has served as an Options Strategist for a number of firms and was also appointed to the Options Advsiory Board with Pershing, a branch of the Bank of New York.

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