Ally Options Trading 4-star brokerage rating

Ally Invest Options Trading in 2022



Overview of Buying and Selling Option Contracts at Ally Invest


While Ally offers trading in stocks and funds, it also provides trading in options. Let’s find out what the broker-dealer offers derivative investors.


Trading Tools


Ally Invest doesn’t have a desktop platform. It does provide a simple browser-based trading environment called Ally Invest LIVE. Here, option contracts can be bought and sold. It is possible to buy or sell to open, or buy or sell to close. Unfortunately, there are no pre-populated order forms for multi-leg strategies. Only individual puts and calls can be traded. It is possible to add stock or option legs to one order to create your own strategy, however.

Several different order types are available for option tickets. Besides market and limit, there are stop, stop limit, trailing stop as a percentage, and trailing stop in dollar terms. Market orders are good for the day only. The trailing orders can be based on the ask or bid price.


Ally Invest Options Trading


An order preview appears in the right-hand side of the screen where all trade details can be reviewed before going to the preview screen, where the final order can be submitted.

The regular website has its own option trading tools. Some multi-leg strategies are available here. They include straddles, strangles, collars, married put, condors, and butterflies. However, the software does not always do a flawless job of putting the legs together. For example, the strangle ticket shows the same strike price for each contract. A correctly structured strangle has different strike prices for the two contracts. Apparently, it’s up to the user to select the strikes.


Ally Options Trading


There is also an option scanner available through the Ally Invest website courtesy of ivolatility. It can search for derivatives based on many criteria, including all the Greeks, such as gamma, theta, and alpha.

Ally Invest’s mobile app has the ability to trade options as well. This would be a convenient service for busy investors on the go. To find options for a stock or ETF, you simply need to enter the ticker symbol in the search field. The app will then display information for the security. Tapping on the Options link will display option chains for the security. A variety of expiration dates can be selected, although only puts and calls are shown on the app.


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Up to $3,000 cash bonus + $0 commission trades.

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Option Research and Educational Tools


Ally Invest LIVE has some option research tools that the broker’s mobile app doesn’t offer. For example, there is a probability calculator. After entering a target level of volatility, a target date, and price goals, the tool will predict the odds of hitting the price targets by the target date.

There is also a handy profit/loss graph on the LIVE platform. It estimates the loss or profit that will be achieved with an option trade within a given time frame based on a stock’s price and historical volatility.


Ally Options


The browser-based platform also has a workbench that makes adding stock and option legs to a single leg easy. A green ‘B’ button can easily be changed to a red ‘S’ button to switch between buy and sell. Legs can be unchecked to remove them from a self-created strategy.

The website also has option tools. Option chains have the ability to display puts and calls or more advanced strategies. Choosing one of the advanced strategies, such as strangles, does a better job of filling out the order ticket than the method discussed above.

For beginners or even experienced derivative traders who need to brush up on a few strategies, Ally Invest has some brief articles in its education section that cover a variety of option topics. For example, there are articles on cash-secured puts and the fig leaf strategy. These articles are very short, however.


Ally Invest Options


Pricing Schedule


Ally Invest charges 50¢ per contract for option trades. There is extra 35¢ charge on some option index investments if the exchange on which the product is traded charges an extra fee.

Placing a trade with a live agent is available. Ally charges nothing the first few times this helpful service is used, although the broker-dealer does eventually charge an extra $20 per occurrence afterwards.

Ally Invest does not charge any account fees, such as annual, low balance, inactivity, or maintenance fees. The broker has a minimum margin requirement of $100 for each uncovered short contract.


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Up to $3,000 cash bonus + $0 commission trades.

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Comparison


TradeStation’s browser-based platform has much better option trading tools than Ally Invest LIVE. It has pre-defined strategies that can be chosen, and these have small graphics that quickly display profit and loss maximums. Ally Invest does not have these anywhere on its site.

TradeStation also has an even more sophisticated desktop platform. This software offers a tool called OptionStation Pro, and it is far more advanced than anything Ally Invest offers. Even better, both the desktop trading system and the browser-based platform have paper-trading functions so investors can practice trading before jumping in with real money. Ally Invest does not offer a simulated trading platform.

Despite the great derivative tools available to TradeStation customers, the broker-dealer does not impose hefty fees or commissions. A per-trade pricing plan assesses each option trade at just 60¢ per contract. This plan comes with free access to all the broker’s software packages as well. It is hard to recommend Ally Invest over TradeStation for options.


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$150 cash bonus when you transfer funds into TradeStation.

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Ally Invest Options Trading Recap


Ally Invest offers budget traders a good value in securities trading, including options. With low commissions and several tools, it does a satisfactory job. But other brokers may deliver more.

About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.