Best UK Options Trading Platforms

Options trading is a good investing technique to have at your disposal, either as a hedge for your portfolio or as a potential additional source of income, if you know how. Traders in the UK have access to many trading platforms offering options.

In this guide, you will find the best options trading platforms in the UK, including how options trading work, how to trade options online in the UK, types of options trading in the UK, and much more.

IG - Best Options Trading Platform in the UK

Investors can trade options on major indices, shares, and Forex with daily, weekly, and monthly maturities. Financial markets on offer include the FTSE100, major currencies, and commodities, including metal and energy.

Daily Options provide traders with low-cost, highly leveraged capabilities trading the intraday.

Traders also have the chance of greater risk exposure and opportunities with longer expiry.

The platforms offer a way to have greater control over building your strategies with inbuilt tools.

Due to the availability of leveraged trading, you can trade options with CFDs, with trades mirroring the underlying options trade. The platform has a solid reputation with over 47 years of operation and it's also part of the FTSE250. The platform caters to all types of investors ranging from beginners to experts. Moreover, the platform is intuitive and easy to use.

Fineco Bank - Best for Unique Tools

Fineco Bank has a solid reputation and is publicly listed on the foreign exchange. The platforms offer a comprehensive online trading solution with a modern, intuitive interface for trading options.

Traders have the option of using a powerful proprietary application called PowerDesk. It possesses advanced trading features with advanced chart trading and risk management. It also allows users to customise technical analyses, dashboards, and listings.

The platforms offer clients access to the CBOE market and the volatility index (VIX). Other options include the S&P, Dow Jones, and US Options. There’s an applicable commission of $1.95 -$3.95 per lot. UK clients get their fees from prevailing market currency conversions.

Traders have access to 26 global markets with over 20,000 financial instruments. Options traders can open an account with Fineco Bank, which is authorised by Financial Conduct Authority (FCA).

Saxo - Best Options Trading Tools

Saxo offers investors access to 20 global exchanges where they can trade options on stocks, indices, interest rates, and futures. You can buy options from as low as $1.25 on FTSE250, Nasdaq, and other exchanges. The platform boasts an options chain, strategy builder, roll option, and integrated risk data to optimise the trading experience.

Buying options are standard on Saxo; however, buying and selling will require you to have an account with over $5,000. Customers can opt for managed portfolios that allow them to target long-term profits.

The platform provides access to 40 FX vanilla options with varying maturities ranging from one day to 12 months. For FX options trading, investors get competitive pricing and advanced FX option tools, including risk management and analytics tools. The platform offers three levels of pricing depending on your account type. There is a similar innovative offering for other instruments on options.

Saxo is authorised and regulated by the FCA. The company has operated for over 30 years serving clients in 170 countries. It holds £70 billion in financial assets under management and processes over 270,000 daily trades.

The trading platform is full of powerful, comprehensive features on a user-friendly interface. Some prominent features include enhanced trade tickets, analysis tools, and an extensive charting package.

Degiro - Best Options Trading Platforms for Beginners

Degiro provides an easy-to-use platform that gives access to 50 exchanges globally. The platform categorises options as a product for experienced traders, hence, it is not available for the basic account holders. Traders have to bump up their retail investor accounts to either an Active or Trader account.

Traders get access to trading options through an intuitive web and mobile app. It’s simple and devoid of advanced options trading tools that give market and pricing dynamics.

Options trading is available on markets such as CBOE and Eurex. It costs under £0.7 per contract. UK customers can deposit funds through bank transfers and credit/debit cards to start trading options.

Degiro is an SDAX broker and owns a banking license. It also ensures investment safety through asset segregation, compensation, and deposit guarantee schemes.

Plus500 - Best for Experienced Traders

Investors can access the Call and Put options as the only two options CFDs on Plus500 allowing investors to trade volatility with flexible option trading CFDs. The platform allows options trading with a leverage of up to 1:5. Essentially, traders can trade larger positions with smaller capitals.

Plus500 gives its customers access to the trading view, allowing them to broadcast their trading activities live or publish data as video ideas.

The platform offers superb technical analysis with hundreds of pre-built studies, intelligent drawing tools, and community-built indicators.

Investors can trade options on commodities, stocks, indices, and forex. The platform allows traders to use different strategies on its proprietary apps. Customers have access to trends and insights in real-time for millions of customers. It allows the harnessing of the wisdom of fellow investors to craft a great trading strategy.

There are no commissions on options CFDs. The difference between the closing and opening prices settles charges. The platform offers traders risk management tool such as Trailing Stop and Guaranteed Loss to help them mitigate losses.

Plus500 is user-friendly and offers advanced account management processes. Traders can fund their retail investor accounts using bank transfers, Paypal, and credit/debit cards.

The company is an FTSE company and is listed on the London Stock Exchange. It’s regulated by the FCA. Client’s data and funds are segregated in bank accounts according to regulations.

How Does Options Trading work?

Options trading allows traders to enter into a contract to buy and sell an underlying asset such as stocks or forex at a set price(strike price). This contract gives the trader the right but not the obligation to purchase the asset when the strike price is reached before a specific expiry date.

There are two types of options contracts: Call and put options. The call option allows the trader to buy an underlying asset at a predefined price within a set timeframe. The put option allows the contract holder to sell the underlying asset at a predetermined price within a set time.

An investor will buy a call option and sell a put depending on the stock price fluctuations of the underlying asset.

Trading platforms make money through the premium paid for the options contract. Additionally, platforms benefit when investors suffer losses due to unfulfilled contract obligations.

How to Trade Options on Online Platforms in the UK?

Here’s a step-by-step guide that explains how to trade options on an online platform. We’ll use IG broker as our example.

Step 1: Register and Login Into Your Account

Register an account on IG on the official website. Complete the KYC verification process and wait for the approval.

Log in to the platform and verify that you can view trading instruments.

Step 2: Select Options From the Dashboard

On the left finder menu, you’ll see a list of the trading instruments. Select options from the menu. From the options view, you’ll see the asset classes such as shares and FX. Additionally, you can see the maturity and the popular instruments.

Step 3: Select the Asset Class, Maturity and Instrument

Select the asset class e.g Shares, and the maturity period e.g weekly. You’ll now need to pick the instrument that you call to deal.

Step 4: Using the Options Chain

After selecting your preferred asset class, maturity, and desired instrument, you’ll be presented with the options chain. This is a list of strikes, prices for calls and puts, and the implied volatility value (IV).

Select the pre-determined maturity and your anticipated strike price according to your trading strategy.

Step 5: Place Your Trade

Decide whether you want to buy or sell a call or put option on the market you want to trade. A new deal ticket window will appear that will allow you to specify the size of the contracts. Review the deal and finalize it. Take advantage of this simplified trading platform and trade options on IG now.

Types of Options Trading in the UK

There are three distinct types of options trading available for traders in the UK as can be observed below.

Options Leverage and Margin Trading

Leverage allows traders to maximise returns on options contracts even with small price changes. An option buyer can use a small premium for market exposure compared to the value of the contract. Any positive gains on the price of the underlying asset will see a comparatively large shift in gains for the investor.

On the downside, if prices for the underlying asset do not move in the anticipated direction, leverage, magnifies the risk of loss.

With margin trading, the investor has to put in a deposit. The online brokers supply you with the full trade value, with the deposit acting as a security.

Leveraged and margin options trading boosts the investors' capital which leads to more market exposure and magnified profits.

When choosing an options trading broker, it's paramount to consider whether a platform meets the following criteria.

• A comprehensive suite of risk management tools

• Low deposit

• Low market margin loan interest rates.

• Availability of instruments you want to trade

Here are some of the leading option trading brokers in the UK that offer options leverage and margin trading.

Options Spread Betting

This is a strategy with which you can buy or sell many options of the same underlying asset. Although similar, the options vary in expiry date, strike price, or both.

The table illustrated below reflects the finest spread betting platforms in the UK.

Binary Options Trading

Binary options are a derivative financial product traded on multiple assets or markets. Binary options trading involves the trade parties betting on one out of two possible outcomes. It sets a fixed payout and a loss based on the outcome.

Classic options are more complex compared to binary options. Traders dealing in binary options have to wait for the trade to close before knowing the outcome.

The UK government banned binary options trading. Investors cannot deal in this derivative product using a commercial trading platform.

What to Consider When Choosing an Options Trading Platform?

Consider the following factors when picking up an options trading platforms.

Options Trading Knowledge

Options trading is complex with multiple moving parts compared to a typical brokerage account. Before trading options, you’ll have to undergo a screening process by the trading platform. This essentially is meant to determine your experience, investment objectives, and your understanding of risk.

Traders should always start with platforms that offer free education and a virtual account to hone their skills. It’s important to simulate trades before investing cash. We also recommend platforms that have easy-to-use interfaces. This makes executing trades easier. Here are some options trading platforms beginners should consider.

Price Analysis Tools, Charting and Indicators

Intermediate and advanced traders love platforms that will provide them with a range of advanced technical tools with indicators and real-time streaming data. Some platforms provide the ability to integrate third-party analytics APIs for better market insights.

Most platforms that cater to professional traders must have risk management features. These include account shields, custom trade alerts, negative balance protection, and a suite of stop orders.

Fees for Options Trading Platforms in the UK

Some of the fees option traders can anticipate include.

• Contract fees

• Commission fees

• Deposit and withdrawal fees

IG and Degiro provide some of the lowest fees from our selection. Here’s a fee comparison for the top options trading platform.

Traders should note that these are just standard fees that these platform charge to trade options. Other platforms will levy custody fees, inactivity fees, and spreads that depend on an individual’s profile. Fees may also depend on the trader’s account and access to advanced tools like ProRealtime graphs.

Platform Usability and Accessibility

Platform usability and accessibility are a big deal in trading. Brokers with clean UX designs, effectiveness, and clarity easily attract and maintain investors.

Investors should always use trading engines that are customer-centric, with good speeds for trade execution. Most platforms have desktop, web, and app versions to assist investors trade and monitor activities at all times.

Additionally, trading platforms' usability and accessibility for options trading are determined by:

• Minimal loading times

• Portfolio dashboard that is clear and understandable

• Clarity in fees and commissions

• Consistency in the interface

• Buy options easily

• Easily accessible Tools

Best UK Options Trading Apps

Leading options trading platform in the UK to offer a combination of web, desktop and mobile apps. Most mobile trading apps mirror what the web/desktop versions offer in order to give clients seamless experiences across all platforms. However, not all tools and experiences can be shifted onto a mobile app.

Apps allow you to monitor your trades and help you take advantage of market volatility on the go. Fees are the same across the board.

Here are some of the top options for trading mobile apps.

Traders should note that a minimum deposit may apply before a platform allows you to trade. For instance, the minimum deposit on Plus500 is £100 while Saxo requires an initial amount of £500 with classic account..

Regulation on Options Trading in UK

The FCA is responsible for vetting any options trading broker before it rolls out its services. It keeps a list of all regulated financial services companies on its websites. Traders can countercheck whether their preferred provider is listed on the website.

How to Choose a Good Options Trading Platform

Here’s what you should look out for

• Good customer service

• Solid reputation through online reviews

• Strict adherence to local regulations

• Availability of tools for analysis and charting

• Easy to use platform that has support for multiple devices

• High trading volume of traffic on the platform

• Reasonable charges

How good the security of a platform is normally determined by its strict adherence to local regulations. Initially, the broker should be licensed and regulated by the FCA. It should also be part of the financial services compensation scheme to protect investor funds.

Other platform-level security considerations include.

• Segregation of funds and assets

• Comprehensive KYC processes

• Two-factor authentication

How do I Know an Options Broker is Secure and is Not a Scam?

Best options brokers will be authorised and regulated by the FCA. Here’s how you can spot scam brokers.

• Non-existent services such as binary trading which is illegal in the UK

• Promises of unrealistic profits within short periods

• Background information on the broker does not check out.

• Questionable marketing strategies with the promise of huge gains.

• It’s featured on the FCA’s warning list

• Absence of public financial results

Is Options Trading Risky?

Risks are inevitable with options trading just like any other financial instrument. Traders run a huge risk when the price movement is unfavourable or constant. Investors face unlimited losses, especially when dealing with uncovered calls.

Risk is also magnified when traders take up complex financial instruments like leverage and spread betting. These instruments may result in a wipeout of the capital after unfavourable price movements.

Emotional trading and lack of knowledge result in risky trades. Investors should always trade what they are willing to lose.

FAQs