Trading options offers more strategies and more flexibility compared to trading stocks. However, spotting opportunities and analyzing the universe of available options strategies can be tricky. Whether you’re an experienced options trader or making the jump to options for the first time, having an options trading service for ideas and analysis can enable you to trade more profitably.
In this guide, we’ll cover everything you need to know about choosing the best options trading service and highlight six top tools for every trading style.
Why Use an Options Trading Service?
Using an options trading service is an easy way to save time, minimize risk, and find opportunities while trading options.
If you’re an expert options trader already, using an options trading service can be a good way to put trades on your radar. Many tools offer daily or weekly trade ideas, which you can then analyze further on your own. Alternatively, you can use a dedicated analysis service that enables you to quickly calculate the potential profit, loss, and breakeven price for any options strategy. Some tools will even offer win probabilities based on historical price data.
If you’re a beginner or intermediate options trader, an options trading service can offer ready-made trading ideas that you can act on immediately. While you should always do your own research before trading, trade ideas can give you both a stock and an options strategy to focus on – reducing the amount of work you have to do to find opportunities. In addition, there are plenty of options trading services that focus primarily on education to help you develop your own strategies.
Types of Options Trading Services
Broadly speaking, we can group options trading services into three categories: options picking services, options analysis services, and options trading education services.
Options picking services offer daily or weekly trade ideas, complete with entry and exit points and the exact options contracts you should buy or sell. These services can save a significant amount of time that you would otherwise spend searching for trading opportunities on your own. While not every trade idea that a service surfaces will be great, many of the top services in this category have strong performance records.
Options analysis services are built for more experienced options traders who want to evaluate their own ideas. The features available in these services differ, but they typically include tools for comparing the profit and loss potential of different options strategies and for analyzing the likelihood of profitability. These services can also help traders find unusual options activity or offer advanced screeners for sorting options ideas.
Options trading education services are built to help you understand the basics of options trading and develop your own strategies. Some education platforms offer a chatroom where you can watch professional options traders work in real time and connect with other beginner options traders to share your experience.
The Best Options Trading Services
There are many options trading services available, but we think these six are the cream of the crop:
Best Overall – The Motley Fool Options
The Motley Fool Options is an options picking service from the same team that offers the renowned Stock Advisor stock picking newsletter. In contrast to other options picking services, The Motley Fool Options focuses on long-term growth companies. Many of the recommended strategies unfold over months or years, not days – making this service particularly attractive for swing traders looking to break into options trading.
The Motley Fool Options costs $889 per year, which can be hard to swallow. But that high sticker price is arguably justified by the fact that over 85% of the service’s recommended trades are closed for a profit.
Best for Education – Sky View Trading
Sky View Trading is another service that blends education and trade picks. You get access to an in-depth online options trading course that introduces the Sky View trading system. There’s a live chatroom with other options traders, although it isn’t led by a professional trader. Instead, you get daily alerts designed for new trades and unlimited access to the Sky View portfolio.
You can access Sky View Trading’s alerts only for $99 per month, but access to the entire options education service costs $199 per month.
Best for Analyzing Unusual Options Activity – Optionsonar
Optionsonar is an options analysis service designed to help you track unusually high options trading volume. Unusually high volume is typically a sign of institutional money moving around, so what Optionsonar is really offering is an easy way to trade based on what professional investors are doing. What’s especially nice about this service is that you can dive deep into options order flow for individual contracts and build alerts off that information.
Optionsonar starts at $75 per month, but you’ll need an upgraded plan for $109 per month if you want text and email alerts.
Best for Scanning – Market Chameleon
Market Chameleon is a unique options service that offers an in-depth scanner for finding potential trade ideas. The scanner is particularly useful for trading around earnings reports, as you can mix filters for earnings date and past surprises with filters for a variety of different options strategies. In particular, Market Chameleon makes it relatively easy to design covered calls to collect income from premiums ahead of earnings reports.
Market Chameleon has several different plans available depending on what kind of options and earnings data you need. The Options Trader plan costs $69 per month and doesn’t include earnings data, while the Total Access plan costs $99 per month.
Using an options trading service can help you find new trading ideas and improve your profitability. While the tools we highlighted can be expensive, it’s important to keep in mind that the return from trading options successfully more than justifies their cost. If you’re looking to make the jump to options trading or want to improve your win rate, we recommend trying one of these six services.