Systematic Broker/Platform Evaluation for Options
This evaluation guide provides a structured approach to assess any broker or platform for options trading. Use these criteria to compare multiple brokers systematically rather than relying on headline marketing claims.
Core evaluation criteria
- Order type availability: Verify which order types are supported—stop-loss (essential), trailing stop-loss (useful), bracket orders (very useful), GTT (good-till-triggered), cover orders. Test each with small size.
- Margin view and alerts: Check if margin is shown real-time before order submission. Set test alerts for margin shortfall. Verify MTM position updates frequency (real-time vs. delayed).
- Platform latency during busy hours: Test specifically during 9:15-9:45 AM, 2:30-3:30 PM, and on expiry days. Measure time from click to confirmation.
- Spread order execution: If you trade spreads, confirm whether multi-leg placement is supported. Verify how margins are computed for spreads (hedged vs non-hedged).
- Greeks and IV display: Check if Greeks are shown in option chain and whether they update real-time or static.
- Stop-loss reliability: Place test stops and verify they trigger correctly. Research user complaints about stop failures.
- Mobile trading capabilities: Test full trade workflow on mobile app. Can you place complex orders or only basic trades?
Testing Methodology
Don't rely on demos or screenshots. Open a real account (minimal funding) and execute this test sequence:
- Place 3-5 small trades to test order flow, execution speed, and confirmations.
- Try placing orders during peak hours (first 30 minutes) to test system under load.
- Test stop-loss order placement and modification.
- If trading spreads, place a bull call spread and check if margin benefit applies.
- Contact customer support via phone, chat, email with a question. Measure response times.
- Check contract note generation—same day or next day? Clear and accurate?
- Review fee charged versus disclosed—any surprises or hidden charges?
- Test fund withdrawal—how long does it take money to reach your bank?