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The Best Options Trading Platforms in Canada 2022

Craig Sebastiano
May 2, 2022

Many consider options to be a more avant-garde investment strategy without requiring the apply of every bit much money. Nonetheless, they're not suitable for investing rookies or those that have but bought common funds.

Investors will want the all-time options trading platform to make their trades, and in that location are several brokerage choices.

In this Wealth Rocket article, nosotros'll provide a review of the best options trading platforms in Canada and a primer on options and the basics of trading them.

Start investing today with a complimentary $l in free trades for any account activation of $1,000 or more than.

The Best Options Trading Brokerages in Canada for 2022

Looking for the all-time options brokerage? These are six brokerages we consider to offer the best options trading platforms.

one. Questrade

Questrade offers trading on its four platforms: Questrade Trading (its website, also called a desktop platform), the Questrade app, Questrade IQ Border, and Questrade Global. Beginners should probably stick to Questrade Trading and the app because they're less complicated.

It's very easy to brand a trade on the website. Even so, the Questrade app doesn't take the best reviews. Information technology has ane.9 stars out of 5 on the App Store and ii.3 stars out of five on Google Play. Users have complained about the app being buggy, tiresome, or freezing on them.

Options trading commissions are $ix.95 per merchandise plus $1 per contract. Active traders pay $4.95 per trade plus $0.75 per contract if they cull a stock-still plan or $6.95 per trade plus $0.75 per contract if they cull a variable plan.

However, you need to get an advanced data package that costs $89.95 a month to qualify for agile trader pricing. Trading commissions on American exchanges toll the same, only they're in U.Due south. dollars.

If you want to merchandise options (or stocks for that matter), you need at least $1,000 in your account before you can brand whatsoever trades. This might be a deterrent to some beginner investors. Only there is the option to get a practice business relationship.

Beginning investing today with a complimentary $50 in free trades for any account activation of $1,000 or more.

2. CIBC Investor's Edge

CIBC Investor's Border has just two trading platforms: the Investor'southward Edge website and the CIBC Mobile Wealth app. In that location are no advanced trading platforms.

The site is easy to utilise, while the app has somewhat average reviews. It has 3.3 stars out of v on the App Store and 3.5 stars out of five on Google Play. The app is also for those with Wood Gundy, Majestic Investor Services, or Private Investment Counsel accounts.

Options trading commissions are $6.95 per trade plus $i.25 per contract. For students (who demand to have a CIBC Smart Business relationship for students), commissions are $5.95 per trade plus $1.25 per contract. And active traders (who make 150 or more trades every quarter) pay $iv.95 per merchandise plus $one.25 per contract. Commissions for trades on American exchanges are the aforementioned but in U.S. dollars.

There aren't any account minimums to begin trading, and CIBC provides piece of cake-to-follow instructions on making an options trade.

3. Interactive Brokers

Interactive Brokers has iii trading platforms: Client Portal (its website), Trader Workstation, and IBKR Mobile (its app). Beginners should apply the Interactive Brokers Client Portal or the app.

The website isn't hard to use, and making a trade is quite elementary. The app has fairly expert reviews, with 3.viii out of v stars on the App Store and 3.5 out of v stars on Google Play.

Commissions are quite low compared to its competitors. They beginning at $1.25 per contract with a minimum $1.50 charge per order for less than 10,000 trades per month. The commission is $ane.fifteen per contract for 10,001 to 50,000 trades a month, $1.05 per contract for 50,001 to 100,000 trades per calendar month, and $i per contract when you make more than 100,000 trades a month. Just in that location's still a minimum charge of $1.fifty.

For trading on American exchanges, the commissions are USD $0.25 to $0.65 per contract, depending on the option's price for less than 10,000 trades a month. The minimum charge is USD $ane. The more contracts you lot trade, the lower the commissions. They can be as low as $0.15 when you trade more than 100,000 contracts a month.

In that location isn't an business relationship minimum to begin trading.

4. 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 make a trade. Withal, the app has beneath-boilerplate reviews with 2.iv out of five 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 commission of $viii.75 plus $1.25 per contract. Those who make at least 150 trades every quarter or take $500,000 or more in avails pay $6.95 per trade plus $1.25 per contract. The committee for trades on an American exchange is in U.S. dollars.

There isn't a minimum amount required to start investing, and y'all tin can sign up for a do business relationship.

5. Scotia iTrade

Scotia iTrade offers four dissimilar trading platforms: Scotia OnLine, Scotia iTrade Trading Desk, Scotia iTrade FlightDesk, and the Scotia iTrade mobile app. Scotia OnLine and the app are best for beginners.

The site is easy to apply and making a trade is straightforward. The app is merely for trading, but the reviews aren't very good. It has 1.4 out of 5 stars on the App Store and 1.half dozen out of five stars on Google Play. Users take complained nearly non being able to log in and that the app is slow or that it 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 $iv.99 per trade plus $1.25 per contract. For trades on American exchanges, the commissions are the same but in U.S. dollars.

There'due south no minimum to invest, and there are several investment educational activity resources offered through iTrade U. You lot don't fifty-fifty need to take an account. Simply if you want to trade for free, you tin can sign up for a exercise account.

6. TD Direct Investing

TD Direct Investing offers options trading on iv different platforms: WebBroker (the regular website), the TD app, Advanced Dashboard, and thinkorswim. For beginners, WebBroker and the app are probably the easiest way to go started. The thinkorswim platform is for U.South. options trading only.

The website is elementary to use, and trading is a breeze. The app is for both trading and banking, and has fairly expert reviews on both the App Store (4.5 out of five stars) and Google Play (four.3 out of 5 stars). Since the app is for more than just trading, it'due south difficult to tell how many good reviews are specifically for its trading features.

The standard commission for options trading is $ix.99 per trade plus $one.25 per contract. Agile traders (150 or more trades per quarter) pay $vii per trade plus $one.25 per contract. Commissions are the same for trades made on American exchanges, except they're in U.S. dollars.

There'due south no minimum to invest. There are also investment education resources as well as live and on-demand webinars, which are available for free—even if you lot're not a client.

What are Options?

Options are contracts that give the owner the right—but not the obligation—to buy or sell an underlying asset at a stock-still toll for a specific time. While there are options for diverse types of avails, such as currencies and oil, nosotros will focus on disinterestedness options.

Options can be bought and sold just like stocks, and an disinterestedness pick contract is typically equal to 100 shares. Options are generally used to increment leverage, generate income, improve flexibility, or reduce risk.

In Canada, options trading occurs on the Montreal Exchange. In the United States, options trading happens on many unlike exchanges.

Most online brokers will allow yous 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'south similar to a stock trading platform, except information technology's for trading options. Online brokers offer various trading tools to the regular options trader as well equally active traders who might be involved in day trading. Some brokers may offering higher levels of customer service depending on the trading platform you use or the amount of assets you have. Some may also offer free trading for stocks and lower commissions on both stock trades and options. To go started, you must open an business relationship.

How Do Options Work?

An pick is a contract betwixt a heir-apparent (known every bit the holder) and a seller (known every bit the writer). The holder pays a premium (the price of the option) to the author in order to enter the contract. Under the terms of the contract, the holder has the right to buy or sell the shares at a predetermined price (known as the strike cost).

There are two types of equity options: call and put options. With a call option, the holder has the correct to buy the stock at the strike price and expects the value of the stock to rise. The writer, who expects the value of the stock to stay the same or pass up, must sell the stock at the strike price if the holder wants to exercise their right to buy.

With a put pick, the holder has the right to sell the stock at the strike price and expects the value of the stock to turn down. The writer, who expects the value of the stock to stay the same or to rise, must purchase the stock at the strike cost if the holder wants to exercise their right to sell.

Let's use an example to illustrate how a trade works:

On December i, Company X is trading at $67 and the premium for a February lxx phone call is $three.15.

February is when the option expires (options typically expire on the third Fri of the month) and 70 is the strike price, which is $70.

If you buy i telephone call option contract, the full cost is $315 ($3.15 x 100). For this case, we'll ignore commissions, but it's something to go along in heed when trading.

The stock must trade above $lxx before the choice is worth anything, but your breakeven price is $73.15 considering y'all paid $3.fifteen.

Let's assume that by Dec. 22, the stock has jumped to $78. That means the value of the option has also increased. Information technology'southward at present trading at $8.25 and the pick contract is now worth $825 ($eight.25 10 100). Since you paid $315 ($iii.15 x 100), yous at present accept a profit of $510 [($8.25 - $three.15) x 100].

At this point, you tin can sell the selection and take the profit, which is called closing your position. Or you tin hope the stock volition keep ascent and hold on.

The adjacent twenty-four hours, the stock starts dropping and eventually falls below $70. It stays below that level correct upwardly to the expiration appointment. At present the option is worthless because it'due south below the $70 strike price and you lot didn't sell. That means you've lost your entire investment of $315.

What'due south the Difference Between Options Trading and Stock Trading?

When you buy a stock, you're buying a piece of a visitor. When y'all trade options, you have the right to buy or sell that company'southward stock. With options, you also have the opportunity to make a college return with a smaller amount of coin.

Let's assume you buy 100 shares of Visitor 10 for $67. Your total price earlier commissions is $half dozen,700. If the stock rises to $78 and you sell at that price, you have a total profit of $ane,100 or a return of xvi.4%.

Returning to the example above, you can as well buy one February 70 call option for $315 ($3.fifteen ten 100). If the option rises to $8.25 every bit a outcome of the stock striking $78, you lot tin sell the option and have a total turn a profit of $510 [($8.25 – $3.15) x 100]. That's a render of 161.ix%. While you don't make as much of a turn a profit, y'all brand a greater percentage return with a much smaller investment.

The one thing that is mutual betwixt options and stock trading is that you demand to take a brokerage business relationship.

Our Final Thoughts

Each of the brokerages offers something unlike for everyone. The best options trading platform is probable the one that you're the most comfortable with in terms of user experience, reliability, and, most of all, pricing and commission rates.

Ofttimes Asked Questions

It depends. Investing in stocks or options each accept their ain risks. Buying 1 stock is riskier than buying a number of stocks in a diverseness of industries.

Options are more complicated than stocks and there are diverse options strategies that are riskier than others. If you lot know what you're doing, options tin can sometimes be safer than investing in stocks.

It's possible to get a higher percent return with options.

For case, if yous buy 100 shares of Company Ten at $67 each (for an investment of $half dozen,700) and the stock price increases to $78, that'south a proceeds of $1,100 or 16.four%.

But if you purchase one Company 10 telephone call option for $3.xv and the value of the option increases to $8.25 (considering the stock rose to $78), that's a gain of $510 or 161.9%.

The best trading platform for beginners volition depend on what yous're looking for in an online brokerage.

The brokerage that offers the lowest commissions doesn't ever mean information technology'due south the all-time platform.

What y'all will desire is a platform that'south easy to utilise and brokerage that doesn't charge high commissions. Many of the brokerages that are reviewed in this commodity offer a combination of both.

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