Learning how to trade options on TD Ameritrade will change in 2023… September 2023 is the proposed date for when all TD Ameritrade accounts will be transitioned to Schwab’s platform.
This is the final stage in the gradual transition into one broker since their merger was confirmed in 2020.
Options trading is a battlefield, so you need a weapon that serves you well. I’ll share my thoughts about TD Ameritrade here, but it’s on you to determine whether it’s right for your needs. What works for others might not work for you and vice versa.
In any case, Schwab’s options trading offerings should also fit into your decision.
I think TD Ameritrade is a great online broker for trading options, but you might think differently. Read on to dive deeper into TD Ameritrade’s features and decide whether it’s right for you.
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Trading on TD Ameritrade
You actually have multiple platform choices when trading options on TD Ameritrade. You can use TD Ameritrade’s web trading platform. You can also use its more powerful desktop platform thinkorswim.
Thinkorswim is geared more toward experienced option traders. It has multiple advanced features. These features help you monitor stocks, perform technical analysis, and plan trades.
Thinkorswim’s app also has a mobile version. This helps you monitor and make option trades from your phone or tablet.
If you’re in the market for a power trading platform, try StocksToTrade. It’s my favorite trading platform (and the one I helped design).
Give StocksToTrade a try today — a 14-day trial is only $7!
What else does TD Ameritrade offer? Here’s a look at its other features:
- Educational material in multiple formats
- Multiple customer support options
- High-level trading and charting tools
- Desktop, web, and mobile apps
Looking for online brokers other than TD Ameritrade? Check my guides to options trading with Webull and Charles Schwab.
Benefits of Trading Options Using TD Ameritrade
What are the benefits of trading options using TD Ameritrade? Here are some of the top ones:
Affordable Options Trading Fees
Like most brokers, TD Ameritrade charges a $0.65 contract fee and no commissions on options.
I don’t mind paying this additional transaction cost in exchange for good executions. You’re probably doing something wrong if you can’t be profitable because of trading fees.
Great Trade Execution
TD Ameritrade has some of the fastest executions out there. This means your orders should execute when you want them to.
The broker claims an average execution time of 0.04 seconds. Your mileage may vary. This is one of the biggest differences you should look at when you try out a new broker.
No Minimum Balance Requirement
Like most brokers, TD Ameritrade doesn’t require a minimum deposit. Between this and thinkorswim’s great paper trading platform, you can get your feet wet and try options trading on the cheap (or free).
Various Tradable Assets
This platform has tradable assets of every type. TD Ameritrade lets you trade stocks, options, exchange-traded funds, mutual funds, and more. Even if you have a strategy that doesn’t factor in these assets, it’s nice to know that your broker can change if you decide to.
Solid Customer Service
You want a brokerage service with solid customer service that won’t leave you high and dry. TD Ameritrade has 24/7 customer support through numerous channels. Some of its customer support options include phone, text, email, and social media.
Steps to Start Trading Options on TD Ameritrade
Here are the four steps to start trading options on TD Ameritrade:
1. Open a TD Ameritrade Account
The first thing to do is sign up for a TD Ameritrade brokerage account.
2. Log into the TD Ameritrade or Thinkorswim App
Once you have an account, log into your TD Ameritrade or thinkorswim app. You can trade on both platforms, but they have some differences.
Thinkorswim is better for advanced traders thanks to its sophisticated trading tools. TD Ameritrade works if you’re just learning to trade options.
After you’re logged in, ensure your account is funded before continuing.
3. Select “Options” on the App
TD Ameritrade needs to approve you for options trading. Go into the Options menu and select Request Options Approval or Upgrade.
Finish the application form to continue. This form gauges your trading experience and risk profile.
You’ll get sorted into one of four trading levels based on experience and risk level. Level 1 only has access to basic options strategies. The higher the level, the more advanced options strategies you can use.
4. Start Trading Options
The usual rules still apply:
- Don’t copy other traders. Your goals and risk tolerance may differ from other active traders.
- Learn from successful traders. You can join online communities and talk with veteran traders.
- Make your own stock watchlists. Learn the thought behind a traders’ picks and make it your own.
- Record and review every trade to learn what can be improved. Becoming a self-sufficient trader means learning from your mistakes and getting better every day.
Learning from experienced traders is especially important. You can skip a lot of trial and error by following their tips and studying their options strategies.
If you’re searching for a mentorship program, check out my former student Mark Croock’s Evolved Trader. He’s taken my penny stock strategies and applied them to options trading — making $3.9 million in career earnings in the process!
Here’s a sneak peek of Mark’s curriculum:
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