Following the initial impact of the coronavirus pandemic, Singapore’s STI index underwent a classic “V-shaped recovery” alongside the S&P 500 as traders wasted no time re-entering the fray. This also spelled good fortune for options trading in Singapore.
As a major financial center and model economy in Asia, there are many opportunities for residents of Singapore to do options trading on their own. However, options trading is typically limited to following the movements of major US exchanges.
We saw the need for a clear guide on options trading in Singapore: 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 Singapore?
Options brokers in Singapore keep up with the global standards set by the US, the world’s most active financial marketplace. Good brokers in Singapore have these six 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
Not every options broker will make our list, but it helps us determine the truly best brokers out there.
Note: Brokers in Singapore generally do not allow the trading of stock options related to the Singapore Exchange (SGX). They do give options traders access to US stock options.
The Best Options Brokers in Singapore
Tastyworks | Best for social trading
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 in addition to futures, stocks, indices, ETFs, and cryptocurrencies while keeping to USD 1 per options contract (0 to close).
1# Interactive Brokers Singapore
IB at a glance
Subsidiary to the Nasdaq-listed IBKR, Interactive Brokers Singapore 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 Singapore 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 Singapore.
They charge a leading commission rate of USD 0.65 per contract for American markets. They provide zero account opening fees and no minimum activity fees.
Interested? Read our comprehensive IBKR review.
2# Saxo Bank
Saxo Bank 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 pricing structure feels somewhat convoluted with five possible options, but fortunately, they explain the key details well. The basic “Bronze” choice requires a minimum of SGD 3,000 and charges USD 3 per US stock option contract, while the “Diamond” choice provides the cheapest commission rate at USD 0.65.
Tastyworks at a glance
Based in the US, Tastyworks 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.”
Tastyworks 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 Tastyworks. 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.
4# TD Ameritrade Singapore
TD Ameritrade at a glance
As you might guess, TD Ameritrade Singapore offers everything TD Ameritrade has, while catering to active traders who will love the commission-free trading of stocks, ETFs, futures, and options. However, there is a USD 0.70 per contract fee for stock options.
Similar to Tastyworks, options traders in Singapore can expect to benefit from the full weight of TD Ameritrade’s award-winning thinkorswim platform designed for advanced traders seeking that extra edge. Intermediate or beginning traders are taken care of with a solid educational library and in-person support from specialists knowledgeable about options trading.
However, they lack access to cryptocurrencies, bonds, or mutual funds, for example. This is a great choice amongst the options brokers in Singapore, but for those specifically focused on stock options or futures.
Firstrade at a glance
A US-based online broker and disruptor challenging incumbent options brokers with a no-frills design that gets straight to the point, Firstrade provides the possibility of options trading at no charge per contract. In addition, they offer access to stocks, ETFs, bonds, mutual funds, cryptocurrencies, and extended hours of trading.
Firstrade’s research leaves a lot to be desired, as they clearly rely on Morningstar reports without adding much of their own forecasting. However, they do have an impressive “Options Wizard” that incorporates more than 65 technical indicators and analyses from various profit and loss simulations.
Still, we have to rank Firstrade 4th on our list of options brokers in Singapore since it operates solely in USD. Those accustomed to SGD or simply want more premium add-ons or trading tools should look elsewhere.
The bottom line
Options trading is robust and competitive in Singapore, with world-leading providers and low fees. Selecting the best options broker as a Singapore resident is still going to be a difficult choice as interest in retail trading continues to expand. We’ve narrowed down the selection to five leading choices based on our criteria.
Each of our recommended options brokers in Singapore excels at certain aspects. Do you specifically want to focus on only options and futures? TD Ameritrade. 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 Singapore?
Absolutely! Singapore is one of the world’s leading economies and financial centres. However, options brokers are generally limited to following US-based stocks.
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 Singapore offer stock options, futures, and options on futures.
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 a 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 almost always provided by brokers serving Singapore.