If you want to buy or sell options on stocks you need an equity options broker.
We’ll quickly run through what equity options are, how they can be used and where you can trade or buy and sell equity options online or on the phone with FCA regulated brokers.
Note: If you are a professional trader looking for equity options trading use prime-brokers.net to find the most relevant trading desk.
First of all, what are equity options?
Very simply, equity options give you the right to buy (or sell) a specific amount of shares in a company at a set price at a set date in the future.
Equity options are used for both speculation and portfolio protection and are split between puts and call.
You basically buy put options on a stock if you think it is going to go down or buy call options if you think it is going to go up. This gives you the option to either buy or sell the actual shares on expiry or sell your options position if the premium has risen or fallen in price.
Equity options trading brokers in the UK.
All equity options brokers in the UK should be regulated by the FCA.
Two major brokers for equity options are Saxo Capital Markets and IG. Although they both offer equity options in slightly different ways.
- IG offers spread betting and CFDs on equity, index and forex options.
- Saxo offers on exchange DMA equity options where you can buy and sell the underlying shares.
So, if you just want to speculate on option prices IG, provide a tax efficient way to do it through spread betting.
However, if you want to buy portfolio protection, run options strategies with cross exchange marginss then Saxo has a more heavy duty offering.
UK equity options trading brokers comparison
You can compare the best brokers for trading equity options with our options broker comparison table. The Good Broker Guide only features FCA regulated UK based brokers in our comparison tables.
Or review our stockbroker comparison tables. Most UK stock brokers allow customers to buy options on UK stocks.
UK equity options broker reviews
We provide review pages of UK equity options brokers. Within which we write our expert verdict on the services that these UK equity options brokers offer.
We also provide a section where traders and clients can offer their own reviews on the brokers they have traded with.
Best equity options trading platforms for beginners
If you are a complete beginner to equity options trading, you would be wise to go with a broker that has experienced dealers who can help you put on positions. When you are first starting out in equity options trading it’s easy to make mistakes, so mitigate the risk of these mistakes by using either IG’s or Saxo’s dealers and explain exactly the position you want to put on.
UK equity options brokers cannot give you advice on what to buy and sell. But, they can give you advice on options strategies and how to achieve the portfolio protection you need.
Which are the best options brokers for stock options in the UK?
This is a tricky question as brokers are good at different things. A UK equity options brokers that works well for one client, may not be the best for another client.
The best way to find the best equity options broker is to use our equity options broker comparison tables or take our broker finder quiz to discover which equity options broker is best for you.
How to find low commission options brokers?
The commission charged on equity options should be published on a brokers website. But, depending on your volume they are always up for negotiation.
As most brokers offer the same access to the same markets, they will be keen to win equity options trading business and may offer a discount on commissions.
You just need to ask for it!
Trading US options from the UK
But you can use a UK equity options broker to trade US stocks. All brokers in our options broker comparison tables have a good range of US stocks available for options trading.
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Richard started the Good Broker Guide in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.