Australia’s S&P/ASX 200 made a full recovery from the Coronavirus pandemic. By the summer of 2021, Australian investors were already riding into new all-time highs. There has never been a better time for options investing in Australia.
As a major financial centre and G20 member, there are many opportunities and reasons why Australians should consider options trading. And there are well over a dozen online stock brokers to choose from.
We saw the need for a clear guide on options trading in Australia: to summarize its leading brokers, their merits, and where they fall short. This article delves into our top five picks and why. Let’s get to it.
What Makes a Good Broker for Options Trading in Australia?
Options brokers in Australia keep up with the global standards set by the US, the world’s most active financial marketplace. Most US-based options platforms like Robinhood do not work in Australia. Good brokers in Australia have these seven virtues in common:
- Low account or trading minimums
- Competitive and transparent fees
- Many product options
- Multiple trading and analytic tools
- Support for news alerts
- Ample learning material
- The ability to trade real options and not CFDs on options (more about it on the differences between CFDs vs real shares)
Not every options broker will make our list, but it helps us determine the truly best brokers out there.
The Best Options Brokers in Australia
Interactive Brokers | The globe’s award-winning default broker
With a history spanning more than 40 years, IBKR remains one of the most trustworthy brokers available and is unofficially the globe’s default broker, including Australia. For options, there is a per contract fee going up to USD 0.65 for US options and up to AUD 2.20 inclusive of GST tax. Interactive Brokers also launched IBKR GlobalTrader, a modern mobile trading app for options, stocks, and ETFs, ideal for novice investors.
Saxo Markets | Premium, higher-cost broker delivering exceptional research
A subsidiary of Danish online broker Saxo Bank, Saxo Markets has prepared an incredible offering for residents of Australia inclusive of listed options, forex options, commodities, futures, and more.
tastytrade | Excellent discount broker, but US-focused
Tastytrade, formerly known as Tastyworks, stands out as an up-and-coming options broker focusing on the retail trader who truly wants to hone their craft. They provide options trading as well as futures, stocks, indices, ETFs, and cryptocurrencies, while keeping to USD 1 per options contract (0 to close).
TradeStation | Celebrated online broker catering to active traders
TradeStation International, the UK counterpart to the US’ celebrated original–TradeStation–remains a top choice for active options traders in Australia. They charge a competitive USD 0.60 per contract plus a flat fee of USD 5 per trade.
1# Interactive Brokers
IB at a glance
Subsidiary to the Nasdaq-listed IBKR, Interactive Brokers in Australia echoes its parent’s world-leading strength, offering, and product range–options included. They earned the trust of options traders and the top spot on our list of the best options brokers in Australia through their commitment to global access and risk management.
The platform serves both institutions and individuals, beginners and professionals, by marrying global access to nearly all available asset classes–options included–with an accessible web platform and streamlined mobile apps. In particular, IBKR GlobalTrader leads the global industry in simplified stock and options, including Australia.
They charge a leading commission rate of USD 0.65 per contract for American markets or up to AUD 2.20 for Australian markets. They provide zero account opening fees and no minimum activity fees. Also, new users can get a free stock.
Interested? Read our comprehensive IBKR review.
2# Saxo Markets
62% of retail CFD accounts lose money.
Saxo at a glance
Our runner-up, Saxo Bank is a deeply research-oriented broker with a track record, like IBKR, spanning decades. They cater to all levels of experience with a variety of different platforms, but their focus on premium perks and design works best for intermediate to advanced options traders.
We find that SaxoTraderGO will work best for most traders, while those who operate professionally or daily could do even better with SaxoTraderPRO. The former is an award-winning platform that blends the sophistication of desktop-based trading alongside a powerful mobile app for 24/7 coverage.
Their tiered pricing structure feels somewhat convoluted with three possible options, but fortunately, they explain the key details well. The basic “Classic” choice requires a minimum of AUD 1,000 and charges USD 2 per US stock option contract and AUD 3 per Australian contract. The “VIP” offering charges USD 0.75 and AUD 1, respectively.
tastytrade at a glance
Based in the US, tastytrade is a relatively new options trading firm that caters to “do-it-yourself” traders who avoid algorithms or robo-advisors. They offer access to stocks, options, futures, indices, commodities, ETFs, and cryptocurrencies. In fact, their trading platform was built by the same engineers who devised TD Ameritrade’s “thinkorswim”.
Tastytrade provides a comprehensive trading platform across both desktop and mobile interfaces. However, there is a learning curve wherein beginners should learn the basics of delta, gamma, and so on before diving into tastytrade. Once you’re past that, they allow you to follow leading or popular options traders.
For stock options, they charge USD 1 per contract for opening a position and nothing to close. They also offer complete transparency by detailing each possible fee. They are competitive but lack the research and educational material of IBKR–and access to Australian stock options.
4# TradeStation International
TradeStation at a glance
Tradestation International is the UK counterpart to the well-known US broker lauded for providing a fantastic trading experience. Tradestation has earned titles like a “Top 5” acknowledgement for options brokers by “Investor’s Business Daily”.
TradeStation International focuses on more volatile asset classes for active traders, including options, futures, IPOs, and bonds. While they’re good enough to be considered one of Australia’s best options brokers, we’d have to rank them 4th on our list due to their higher fees and lack of access to ASX stock options. They charge USD 0.60 per option contract plus USD 5 flat per trade.
They make it up, partially, with built-in real-time market data, no minimum funding requirement, and OptionStation Pro–an incredible piece of technology for trading options in Australia. It has features such as building options chains, analyzing options strategies, and providing instant execution. We suggest TradeStation International if you want to focus on US-based options and futures.
5# Tiger Brokers
Tiger Brokers at a glance
Tiger Brokers, one of Asia’s most popular discount brokers for individual and institutional investors, is our wildcard choice for options trading in Australia. Like TradeStation International, it does not provide access to Australian stock options–instead only options for the US or Hong Kong markets.
Its pricing is competitive at USD 0.65 per contract for US stock options, and slightly more expensive for Hong Kong stock options at 0.2% of trade value. We appreciate how the broker acknowledges this higher expense with the tag “Fair.”
Tiger Brokers focuses on execution and ease of trading, and the platform succeeds with both. In addition, it serves not just as a gateway for options trading in Australia, but as an international mutual fund broker for investors who deposit at least USD 100. This is an ideal choice for active traders who don’t necessarily need research, and like to keep their cash deposits in mutual funds instead.
The bottom line
Options trading is alive and well in Australia, with multiple world-leading providers and low fees. Not all options brokers permit trading on the ASX, but many traders may wish to operate solely with the world’s reserve currency–the US dollar. We’ve narrowed down the selection to five leading choices based on our criteria.
Each of our recommended options brokers in Australia excels at certain aspects. Do you specifically want to focus on US options and futures? Tastytrade. Do you prefer an established, global platform known for its reliability and low fees? IBKR. Need more recommendations?
Check out our platform finder.
Can you buy options in Australia?
Absolutely! Australia is one of the world’s leading economies and financial centers. However, options brokers are often limited to following US-based stocks or futures.
What is an options broker?
Usually related to “full-service brokers” that try to provide all the necessary tools for an intermediate or professional trader, an options broker is an online intermediary between you and the exchanges that enables the trading of options. The best options brokers in Australia offer stock options, futures, and options on futures.
Can you trade options on IG?
No, you cannot trade real options on IG. With IG, you’ll trade options using CFDs, which are contracts for differences and give you indirect exposure to options (more about it on the differences between CFDs vs real shares).
How do you open an options trading account?
While the process changes per options broker, it remains relatively straightforward. Simply be ready to provide digital copies of official IDs (i.e., passport, driving license, etc.) and proof of address, and transfer an opening sum through ACH or wire, for example. The options broker, like IBKR, may want to verify your age as well.
How do you buy options?
Thanks to advances in web and mobile trading platforms, trading options remains largely intuitive. Almost all mobile apps guide you through the purchase (opening) process and the selling (closing) process. Web platforms may have a learning curve and require an introductory tutorial. This is the case for some users who use IBKR, for example.
However, we recommend at least a beginner options course to walk you through calls, puts, strategies, opening, closing, and margin trading.
What are the risks of buying, trading, and selling options?
Since options trading almost always includes the use of margin or borrowed funds, the risks generally are much greater than trading stocks or commodities with only the cash you own. This is referred to as leverage. Again, we recommend completing a basic course in options trading, which is provided by brokers like IBKR or Saxo Markets.