Not all brokers are created equal.
In order to trade for a living or even trade profitably, you must have a good set of tools. One the tools that is essential is a good broker. With so many to choose from, there is no excuse for having a lousy broker.
As option sellers, we need to have an option friendly broker. This is a broker than either specializes in options, or considers option traders a very important customer base.
By using an option friendly broker you will get
- better commissions
- better margin requirements
- better prices on your orders
- better software/platforms to trade on
- better information
- and better education
How do you tell if your broker is an option friendly broker?
- If your broker advertises on national tv, it’s probably not an option friendly broker.
- If your broker is a household name ( they have their name on a stadium), they are probably not an option friendly broker.
- If your broker’s main sales pitch is how low their stock commissions are, they are probably not an option friendly broker.
So how do you find an option friendly broker?
- A broker with the word “option” in their name probably IS an option friendly broker.
- If your broker charges less than $2 for a single option or less than $30 for a dozen, they probably ARE an option friendly broker.
- If you can trade options from their own software, on the internet, or from your cell phone, you probably have an option friendly broker.
- If your broker puts on seminars and webinars teaching option strategies, you probably have an option friendly broker.
- If you can call their help desk and have them walk you through an iron condor trade, without them asking you what an iron condor is – you probably have an option friendly broker.
Finding a broker is not hard. Finding an good option broker is a little trickier. But if you ask option traders you will get many suggestions. Of if you join my site, I will show you which ones I think are the best.
Having a broker that is not option friendly, is like trading with one hand tied behind your back. Don’t do it.