PROS / This platform has a comprehensive list of tools and features for analyzing and trading stock options.
CONS / The advanced thinkorswim platform may be overly complicated if you are a first-time options trader.
VERDICT / TD Ameritrade's thinkorswim is a stellar platform if you are an experienced trader or if you are ready to get more serious about options trading.
If you are looking for more than the basic options trading platform – something with advanced tools for researching and analyzing potential options trades – TD Ameritrade's thinkorswim platform can provide just that. With customizable tools to analyze risk and probability, scan stocks by price and strategy, and view the market from different perspectives, thinkorswim provides a powerful platform for options trading. TD Ameritrade’s prices are competitive with the industry. For these reasons, this broker receives our Top Ten Reviews Bronze Award.
Fees & Commissions
When trading options, commissions and fees are among the most important considerations. Prices have fallen industry wide, and the options base fee for TD Ameritrade is now $6.95 and the per-contract fee is $0.75. The cost for 10 contracts is $11.45, which is slightly lower than our lineup’s average of $12.90.
Other fees, however, are pricier. For an option exercise or assignment, you pay $19.99 each time, the highest fee of the services we reviewed. The fee for broker-assisted trades is one of the highest, costing $44.99 plus each per-contract fee. Finally, the margin rates start at 9.50% for balances under $10,000 and drop to only 6.75% for balances of $1 million or above. Rates are calculated from TD Ameritrade's established base rate, which is subject to change. You do not need to maintain an account minimum to trade with this service.
Platform & Tools
Options traders will find the technology offered by TD Ameritrade’s thinkorswim platform helpful when evaluating potential trades. Our reviewers found it to have the most complete analytical offerings, with over 300 different technical indicators. Other tools are available to help you forecast future performance and gauge the risk and reward of an investment.
When using option chains, you can choose from a number of preprogrammed strategies, including vertical, butterfly and iron condor, and the spread book includes complex orders such as straddle and strangle orders. TD Ameritrade’s platform is one of the easiest to use. Setting up option chains is easy, and trades can be executed from watchlists, option chains or a standard trade ticket.
The platform is customizable, so you can add and remove widgets to your liking. Alerts can be set for multiple scenarios and price ranges, something particularly useful for options traders.
The mobile app is also particularly useful, working as an extension of the main trading platform. You can use your watchlist, place trades and set up alerts through the app. You can also use charts to evaluate potential investments, something not all apps offer.
Education & Resources
TD Ameritrade offers a wide range of educational resources that investors of all skill levels can use. The investor resources, which include webinars, the Ticker Tape blog and a portfolio management course, are all worth investigating, even if you’re active veteran trader. Industry experts and professional investors contribute to these, and they are all archived so you can look at content created before you signed up.
Training material for the platform includes video tutorials and illustrated manuals. Even if you’re familiar with the basics of an online trading platform, looking through these can help you get up to speed quickly, especially when making complex options trades.
You can also gain access to a paper money account to make simulated trades. If you’re relatively new to options trading, this is something we recommend, as it can help you learn the ins and outs of the platform and test your trading strategies before putting up your own money.
TD Ameritrade's fees are slightly higher than the average for the industry. However, the thinkorswim platform provides a powerful platform for serious traders, with a huge suite of tools for in-depth stock analysis, basic or complex options trading, and portfolio management and assessment.