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The Lowest Options Trading Fees Brokers in 2025
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$0 per contract and $0 base
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Webull is one of the cheapest brokerage firms to trade options. Their pricing is impossible to beat:
there is no base commission, no per-contract fees, and no assignment or exercise fees. Can’t get
much better than that. This low pricing is a huge advantage for those clients who don’t want their
profits eaten up by commissions.
Another huge plus of Webull are low margin rates: from 4.99% for very large debits to 8.99% for balances under
$25k. That’s between 2 and 4 points below most other brokers and this low rate allows you to use leverage to
amplify returns more successfully.
It’s possible to add options trading using the mobile app.
On the lower menu on the Webull app, tap on the center icon (the bull’s horns) and then tap on the
icon with a circle and three dots inside (labeled as “More”). On the next page, tap on “Options Trading”
under the “Account” menu. Just follow the instructions and you’ll be ready to trade within a day.
Read full Webull options trading review »
Up to 40 FREE fractional shares when you make a deposit at Webull.
Visit Webull Website
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$0 per contract and $0 base
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Firstrade is the lowest priced online broker in the industry. Their options commission is $0 base charge
and $0 per contract.
There are three ways options can be traded on Firstrade’s user-friendly website. The first is to click on the “Trading” tab in the top menu and then select “Options” in the lower menu. Doing so creates an order ticket. There are no other tools on this page; so you really need to know what you’re doing before you try to fill out the order ticket. Fields that need to be completed include strike price, number of contracts, buy or sell to open or close, and call or put. On this page, there are links to chains and a helpful options expiration calendar.
The next place derivative orders can be submitted is through the broker’s trade bar. It appears at the bottom of the screen. Clicking on the two blue arrows on the right side enlarges the trade bar so that the order form will be shown. On the left side, you’ll want to click on “Option” instead of “Stock.”
Option chains can be expanded above the trade bar for an overview of current prices of contracts. Besides calls and puts, there are selections for spreads and straddles. Greek values are automatically calculated as well. Clicking on a hyperlinked bid or ask price automatically populates the order ticket below.
The third and final method of trading options on the website is with OptionsPlay. This is a very useful piece of software that offers derivative traders many great features. There are trade ideas presented on any entered company. Clicking on a green “I’m Bullish” button generates one set of trade ideas, while a red “I’m Bearish” button will produce a different set. Profit-loss diagrams are included. Clicking on one of these trade ideas produces an order ticket.
During our research, we found OptionsPlay to be the best method of trading derivatives at Firstrade. To access the software, you need to click on “Options Wizard” within the chains window.
Trading Options on the Mobile App
Although there is no desktop program or browser platform at Firstrade, the broker-dealer does have a mobile app where options can be bought and sold. On a stock’s profile page, there are two buttons at the bottom of the screen: “Trade Options” and “Trade Stock.” Tapping on the first choice generates a list of expiration dates. Tapping on a date generates calls and puts with bid and ask prices. Tapping on a bid or ask price creates a trade ticket with some data filled, but other data, such as order type, not filled. There are no multi-leg strategies on the mobile system.
Get up to $250 in transfer fee rebate.
Visit Firstrade Website
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How to Trade Options Before Earnings or News Release
Finding a simple option strategy before an earnings release can be difficult for traders. Most investors trying to benefit from an earnings increase or decrease just buy calls or puts. Some experienced traders even buy both a call and a put (straddle/strangle), thinking that if the stock moves a lot in either direction, they will make some profit.
Limited Risk – High Reward
The advantage of only buying calls and/or puts is that a trader knows their maximum risk when they make the trade. If a call on Apple costs $100, then $100 is the most you can lose, and you have the chance to earn more if Apple moves a lot before the option expires.
This is the problem with most buying option strategies before earnings announcements...since no one knows what the earnings report will say or how the stock will react; the demand for options increases a lot before the announcement. Both traders and investors wanting to protect against price changes are buying options, which greatly increases the premiums, making puts and calls more expensive.
Being the Bookie
Everyone knows that taking bets is more profitable over time than making bets. Especially if the bet has very good odds for the house. This is exactly what expensive options are for the seller – a game that favors the seller over the buyer. Usually, right after earnings are released, the demand for and the price premium on calls and puts, decreases. Even those that have both potential gains and losses covered find it hard to make a profit once the "premium of the unknown" is gone from their option.
So the obvious solution seems to be: become a seller of options. If only it were that easy! Unless you have unlimited money like a big bank, the unlimited risk of being a naked option seller will be too much for you and your broker to handle.
Credit Spreads
To take advantage of the high premiums in the option market before an earnings announcement, while reducing the risk of selling uncovered (naked) puts/calls, the common strategies are "bull put credit" and "bear call credit" spreads.
Instead of explaining how to set up the option spreads for a stock like XYZ trading at $50, I suggest searching online for those who want the details. The main point here is how to get the most profit from these spreads, which is done by unwinding them.
Unwound
Once the earnings report is released and the market is processing the numbers, option prices return to a more realistic view of future expectations.
This allows the options trader to close their pre-earnings position and profit from the uncertainty
that was present before the announcement. Does it work every time? No. Does it provide enough profit to make a lot of money if that's all a trader does? No. But it works often enough and adds to the profits to make it a worthwhile strategy to explore further.
Updated on 1/6/2025.
Arthur Chachuna is a professional personal finance blogger, and the owner of Brokerage-Review.com.
He has been an avid investor for 25 years, and has a background in both applied math and programming.
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