A user has asked: I’m looking for somewhere that offers trading options on the US markets?
Answer: You will need a broker that offers options trading to UK residents. Options trading is much more common in America than it is in the UK and as such there is much more options liquidity on US markets for private investors.
Why is options trading so popular in the US?
Primarily this is because derivatives products like CFDs and spread betting are not allowed in America. It is possible to trade futures, single stock futures are not as common as futures on indices and commodities. So if our American friends want to trade stocks with leverage they tend to do it through options.
Options may seem complicated at first, but actually they are a very useful tool for getting a lot of exposure with a little money. They are also a form of limited risk investing if you are buying options are your risk is limited to how much you pay for the options. On the flip side, if you start selling options, your losses are potentially unlimited.
If you’re new to options trading here’s how to trade options so you can understand the process, benefits, features and pitfalls before you begin.
Finding a broker that offers US options trading
If you are based in America you need options broker based in the US. The American regulators are very particular about where their citizens and residents can trade and UK brokers are not allowed to onboard US clients.
If you are outside America, a London based broker can offer access to options trading on the US markets. Most can provide options as a CFD or spread bet, but DMA brokers are your best option as you can buy and sell on exchange options with direct market access.
Richard is the founder of the Good Money Guide (formerly Good Broker Guide), one of the original investment comparison sites established in 2015. With a career spanning two decades as a broker, he brings extensive expertise and knowledge to the financial landscape.
Having worked as a broker at Investors Intelligence and a multi-asset derivatives broker at MF Global (Man Financial), Richard has acquired substantial experience in the industry. His career began as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson), following internships on the NYMEX oil trading floor in New York and London IPE in 2001 and 2000.
Richard’s contributions and expertise have been recognized by respected publications such as The Sunday Times, BusinessInsider, Yahoo Finance, BusinessNews.org.uk, Master Investor, Wealth Briefing, iNews, and The FT, among many others.
Under Richard’s leadership, the Good Money Guide has evolved into a valuable destination for comprehensive information and expert guidance, specialising in trading, investment, and currency exchange. His commitment to delivering high-quality insights has solidified the Good Money Guide’s standing as a well-respected resource for both customers and industry colleagues.
You can contact Richard at richard@goodmoneyguide.com
