Options trading is one of the last holdouts in the trading world where investors still have to pay cash for commissions. Major online brokers charge no fees for stock and ETF trades, and many also offer thousands of mutual funds with no transaction fees. But options still routinely cost about $0.65 per contract, although several entry-level brokers now don’t charge option commissions.
Here are the brokers now offering commission-free options trading and what you need to know.
Commission-free options trading: what to look out for
Options have been the only holdout for many brokers when it comes to securities that still cost money to trade. Even among the best options brokers, many still charge fees for trading them. And don’t be fooled by the language claiming that brokers don’t charge commissions but still charge you a fee per contract. The brokers below really do not charge any commission from traders.
That said, not all of them are 100 percent free. That’s because some brokers still pass on the small regulatory options fees they are charged. That fee is less than 3 cents per contract. All brokers pay this fee, although some do not pass the cost on to their clients.
While cost may be your only concern when selecting a broker, it is important to consider other features the broker offers. Many brokers offer research and education that can add good value, and strong customer support can help both new and experienced investors. These extra features can be especially valuable to the occasional options trader, although other traders may find that low costs are their main criteria after all and opt for the cheapest broker.
Brokers offering free options trades
First class
Firstrade offers a strong suite of features to complement commission-free trading in options, stocks and ETFs. These features include more extensive research than that of brokers in this article, including access to Morningstar reports, as well as an educational section. Firstrade is a relatively new player in the fractional shares space, having launched its service in December 2023, and customers can get started with $5, making it attractive to newer investors.
Moomo
Moomoo has recently taken steps to bring its pricing more in line with the market, including reducing option commissions to zero. It charges no fees for stock and ETF trades, and it gives investors a distinct advantage if they want to trade Hong Kong stocks and Chinese A-shares, both rarities among U.S. brokers. And you get Nasdaq Level II data. Moomoo offers some of the best rates on margin accounts and cash balances, but not fractional shares.
Public.com
Public is one of the newer entrants into the brokerage world, but has aggressively expanded its product offering from stocks and ETFs to cryptocurrency and options. Public essentially gives you back some of the revenue from options trades, so you may end up with an edge even after taking into account the regulatory costs. The broker offers social feeds where you can chat about stocks, the ability to trade fractional shares from as little as $1, and a strong education section. If you want more research, Public offers a $10 monthly subscription that gives you Morningstar research and enhanced support.
Robin Hood
Robinhood was one of the first brokers to make a splash in the no-commission trading world, and the added feature of zero-fee options trading is a solid benefit of working with one of the best investing apps. Robinhood is a good choice if you prefer to trade from your mobile device, and its easy-to-use interface can execute trades quickly. You can also trade cryptocurrency directly in the app, and Robinhood offers an attractive matching bonus program for your IRA.
SoFi Active Investing
SoFi makes a compelling proposition with its Active Investing service, which allows customers to trade stocks, ETFs and options commission-free. It’s a great add-on if you’re already a SoFi customer and want to keep your financial affairs with one provider, and you can see everything under one account. You can trade fractional shares from as little as $5 – a nice feature for beginners – although the broker doesn’t offer mutual funds and has only limited research for clients.
Webul
Webull is an easy-to-use mobile investing app, and of course you get the usual zero-commission trading on stocks and ETFs, as well as zero-commission trading. Webull has wonderful charting features and its fractional share trading ability allows anyone to invest for as little as $5, meaning even the expensive stocks are investable. The broker offers instant funding and lets you trade cryptocurrency without commission, although you still pay a built-in spread markup.
