Top 7 Options Trading Platforms and Brokers In The UK

Is options trading legal in the UK?

Indeed, trading options are both legal and strictly regulated in the United Kingdom. Trading options (and other instruments) through a broker approved by the FCA is among the current regulations' requirements. The rationale behind this is that the FCA is the regulatory agency tasked with monitoring the financial markets and safeguarding the interests of investors.

The UK regulatory framework includes measures to protect investors, including risk management, pricing, and disclosure, as well as a guarantee of honest and transparent trading. So, options trading brokers in the UK must always safeguard the funds of investors and provide full disclosure of all trade-related information. This entails giving precise pricing, closing deals swiftly, and maintaining a clear separation between business and invested funds.

Note: Remember that options trading in the UK can be risky, so invest in financial products that you understand and are familiar with.

The best options trading platform in the UK

Signing up with the best options trading platform in the UK will benefit novice and professional traders. For beginners, the tools provided by these top option brokers will help them learn how to trade options. These brokers offer opportunities for practice and the development of appropriate professional skills necessary to comprehend the operation of options trading.

Top options trading brokers in the UK give traders access to a cutting-edge trading platform that is simple to use when trading financial products like bonds, ETFs, CFDs, options, and futures. Below are some of the best options trading platforms in the UK.

Degiro - best for direct options trading and low-cost options trading

DEGIRO Review

• Minimum deposit: £0

• Commissions: £0,75

• Customer support: Yes

• Demo account: No

• Regulation: Yes (Authority for the Financial Markets (AFM); Authority for the Financial Markets (DNB))

DEGIRO is a top option trading broker in the UK, providing traders access to various financial instruments. Since DEGIRO offers some of the lowest fees and commissions in the industry, traders interested in trading stocks, bonds, options, futures, and ETFs will have the best experience trading on the platform. Investors can begin trading with a comparatively small amount of capital. Although there is a currency conversion fee (%0,25), no other fees apply for inactivity, deposits, withdrawals, or custody.

Using this broker to trade options in the UK requires an Active or Trader account. Opening an account on the platform is free of charge, and compared to many other online brokers, its commissions are much lower. However, this facilitates faster portfolio growth and allows investors to retain a larger portion of their profits.

DEGIRO makes options trading for beginners in the UK more experimental as it provides new traders with top educational resources. Investment strategies, risk management, and market analysis are just a few of the topics covered in the knowledge center's tutorials, articles, and videos.

In addition, DEGIRO offers a variety of webinars and access to a wide range of research tools and reports that can assist investors in making wise decisions. This includes financial data, price charts, and real-time market news.

Tickmill - best for options CFD trading

Tickmill Review

Open an account

Your capital is at risk.

• Minimum deposit for option trading: £823

• Commissions: £1.07

• Customer support: Yes

• Demo account: Yes

• Regulation: Yes (Seychelles Financial Services Authority (FSA), Financial Conduct Authority (FCA))

Tickmill is another top options trading platform in the UK that allows traders to trade options on top financial assets like the Micro E-mini S&P 500 and the Micro E-mini Nasdaq 100. Tickmill provides the best trading platform for two parties to reach a consensus wherein the buyer among them maintains the right to purchase or sell an underlying product at a set cost.

Tickmill offers a competitive commission structure combined with an intuitive and innovative multiple trading platform. Tickmill provides you with the tools necessary to make informed decisions. These include a comprehensive suite of order types and trading tools, rapid execution speed, multiple-trading platform connections via API, and exceptional professional client services.

Options trading in the UK using Tickmill is easy. After registering and creating a new account, you can go to the client area, choose your subscriptions, fund your account using any of the payment methods, and start trading by launching your trading platform. Their base rate for options trading is just $0.85 per contract, and you need a deposit of $1,000 to open an account. Tickmill is an options trading platform in the UK for traders who do not want to pay expensive fees.

Plus500 - best for option CFD trading with competitive spreads

Plus500 Review

• Minimum deposit for option trading: £100

• Commissions: Varies

• Customer support: Yes

• Demo account: Yes

• Regulation: Yes (Cyprus Securities and Exchange Commission (CySEC))

Plus500 is another option trading platform in the UK that traders can trust. Traders in the UK need to open a Plus500 account to trade options and other instruments like CFDs, Forex, stocks, and commodities. Again, you trade option CFDs for calls on 24 prominent symbols; this is also available for put options. While there is a greater chance of loss, CFD call and put options allow traders to possibly make larger profits.

In addition to having competitive spreads, Plus500 does not impose trade commission fees, so while trading CFD options does not require commissions, it incurs spreads. Furthermore, Plus500 levies an inactivity fee (up to $10 monthly after 3 months of inactivity), a guaranteed stop order fee, a currency conversion fee (0.7%), and a commission for overnight funding. But there are no fees for depositing or withdrawing from your Plus500 trading account.

Furthermore, they offer excellent, 24/7 online support, which makes it simple to find answers to any questions. Plus500 offers volatility trading along with an easy-to-use proprietary platform for option trading. Among the reputable options trading platforms in the UK that offer top mobile trading services, Plus500 is a household name. In addition to being the most popular mobile platform in the UK and beyond, it has also received the highest ratings for mobile trading on the App Store and Google Play.

AvaTrade - best option platform for professional traders

AvaTrade Review

Open an account

Your capital is at risk.
71% of retail investor accounts lose money when trading CFDs with this provider.

• Minimum deposit for option trading: £100

• Commissions: -

• Customer support: Yes

• Demo account: Yes

• Regulation: Yes (Financial Conduct Authority (FCA))

AvaTrade is another options trading broker in the UK for beginners and professional investors. AvaTrade offers options traders a competitive pricing model and an AvaOptions platform. By combining call and put options on a single platform, traders can create and manage trading risks on more than 40 currency pairs using the AvaOption platform.

By utilizing its extensive trading resources for technical and fundamental analysis, this platform guarantees that traders will have complete control over their option trading activities. Again, AvaTrade offers a wealth of educational materials for those new to options trading in the UK. Before you invest real money, you can use its demo account to determine your level of expertise.

Even though UK traders only need to deposit £100, experts indicate that to access the entire range of products offered by AvaTrade, a trader's starting balance must consist of at least $1,000 to $2,000 in their preferred base currency. In addition to a £50 inactivity fee, there is an overnight fee for options trading in the UK.

AvaTrade suits beginners looking for an intuitive, customizable interface and feature-rich options trading platform. The platform's robust desktop and mobile versions ensure traders trading options in the UK do so easily.

IG - best for automation option trades

IG Markets Review

• Minimum deposit for option trading: £250

• Commissions: £3

• Customer support: Yes

• Demo account: Yes

• Regulation: Yes (Financial Conduct Authority (FCA))

Options trading in the UK has taken on a new shape considering the services top brokers like IG are willing to offer potential options traders. This broker (IG Markets) allows traders access to options trading on volatility across its wide range of market offerings. These include Forex, shares, commodities, and more. As a global CFD broker, traders would have the best experience trading options using CFD on its platform.

With spread betting and CFDs, you can trade index options with no commission. For a range of traders, trading options with CFDs is appropriate because it allows them to create multiple options trading strategies. You can automate your trading activities with the platform's robust strategy builder and integrations with Mt2 and ProRealTime.

The platform does not charge overnight fees and provides flexible leverage and risk exposure limitations. No deposit fees are required; custody fees are £24 every three months; inactivity fees are £12 per month after the first two years; you can adjust the trade size and strike to obtain the appropriate leverage. You can trade with over 17,000 global instruments, and there are no overnight fees. Additionally, the execution speed of the platform is fast.

Saxo Bank - best low commission option trading platform

Saxo Bank Review

Open an account

Your capital is at risk.

• Minimum deposit for option trading: £500

• Commissions: £3

• Customer support: Yes

• Demo account: Yes

• Regulation: Yes (Monetary Authority of Singapore (MAS))

Saxo Bank is another top options trading broker in the UK that grants users access to different option trading opportunities. This broker allows trading on well-known financial markets like shares, Forex, commodities, and indexes, and it also provides robust option trading tools like combination order ticket features and one-click trading.

In addition to over 1,200 option markets, users can access CFDs and DMAs. On the Nasdaq, FTSE 250, and other international exchanges, traders can purchase stock options starting at USD 1.25.

The IG platform's modern design allows traders to have an excellent experience. Users of this options trading platform can access SaxoStrats analysts for superior market analysis.

Low-budget traders may consider Saxo Markets due to its low commissions on options trading. Traders can combine multi-leg orders or choose from prebuilt options trading strategies and a rolling feature for faster reaction. There is a £50 quarterly platform fee and an annual custody fee of 0.12%, and you can only purchase options with Saxo without any limitations. A minimum $5,000 account value and a written acknowledgment of the risks involved are prerequisites for selling options.

Interactive Brokers - provides advanced trading platforms for option trading

IBKR Review

• Minimum deposit for option trading: £500

• Commissions: £0.15 to £1

• Customer support: Yes

• Demo account: Yes

• Regulation: Yes (Financial Conduct Authority (FCA))

Professional traders seeking advanced options trading platforms in the UK should consider Interactive Brokers (IBKR). While this broker is a UK trader's gateway to the world´s markets at low costs, it is the best choice for advanced options traders. There are no account minimums, inactivity fees, or additional spreads when opening an IBKR account for traders.

It is one of the best options trading brokers in the UK because of its low margin fees, which begin at 0.60p per contract for options trading and are scaled based on volume. Once more, it incorporates an advanced trading platform, this time one that is made for skilled options traders and is robust and flexible. Options traders can analyze their options trades using conditional orders, sophisticated risk management tools, and multi-leg options strategies on the IBKR trading platform (Trader Workstation (TWS)).

Users can find low-cost options strategies, graph possible payouts, compare strategies using options spread templates, and calculate the likelihood of option profitability with even more advanced options analysis tools available through its mobile application.

Professional options traders looking to further their skills benefit from resources such as webinars, video tutorials, and articles. It is advised for seasoned traders only, as inexperienced users might find the sophisticated features daunting.

Top trading apps compared

Below is a tabulated review of the top option trading brokers in the UK.

What is option trading in the UK?

Trading options is a type of trading where traders purchase and sell specific contracts. Although this contract gives the trader the right to exercise the option, you can buy or sell an underlying asset at a predetermined price if it moves above or below that price within a predetermined window.

Investors can trade calls and put option CFDs on 24 well-known symbols with several of the best options brokers in the UK. The awarding of options typically occurs after the vesting schedule, which varies from company to company.

Direct option trading vs Options CFDs

When you buy or sell options in direct options trading, you are working with the real underlying assets. If you purchase a call or put option on a specific stock, you have the right to buy or sell the stock at the strike price. You might also become the owner of the underlying asset if you exercise these rights. However, you do not own the underlying assets when using option CFDs. You are trading the changes in the prices of the options contracts instead of becoming the owner of the assets.

A trader can trade a large range of options, including call and put options with intricate strategies like spreads, with direct option trading. Complex strategies might not be as easily implemented with CFDs, and the selection of options available for options can be more constrained.

Is option trading taxable in the UK?

Yes. Options trading is taxable in the United Kingdom since options are explicitly listed as assets. Selling an option may be taxable, but the conditions that incur the type of tax you pay for trading options vary. If annual gains from trading options exceed £12,300, profits or gains may be liable to capital gains tax. You might not be subject to CGT if your overall options trading gains stay below this cap.

However, options are only taxed at the point of exercise, not at the time of grant or full vesting. When you exercise the option, there is no tax event until the stock is sold. The duration of ownership following the sale will determine whether you experience a capital gain or loss. However, the option's holding period establishes whether the capital loss is short- or long-term after it expires.

Note: It is recommended that traders contact a tax expert in the UK for more transparent and updated information on options trading tax.