5 Top Prop Firms for Options Trading
Prop firms that allow options trading are Maverick Trading, T3 Trading Group, Elite solutions, SMB Capital, Optiver.
Best prop trading firms at all:
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Topstep - Reputable prop firm offering funded accounts to global traders
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SurgeTrader - Streamlined process and flexible trading options for funded traders
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FTMO - Well-known firm emphasizing "trading the news" with funded accounts
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OneUp Trader - Fast-growing provider of funded accounts with advanced analytics
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Fidelcrest - Access to diverse assets, flexible programs for options traders
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5.7
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5.28
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6.68
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Options traders are often in search of funding and opportunities to leverage their skills and capitalize on the potential of the financial markets. Proprietary trading firms present one such avenue wherein they provide traders with funding opportunities, advanced technological tools, and expert mentorship. In the article, the experts at TU will look at the top five prop firms that stand out as the best options trading prop firms in 2024.
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Can international traders join prop firms?
Many prop firms accept international traders. Additional due diligence steps may be required related to citizenship, location, sanctions lists, etc.
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Can traders use prop firm accounts for retirement savings?
Some prop firms offer IRA accounts for traders, enabling savings in tax-deferred accounts.
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Do traders get tax documents for earnings?
Yes, reputable prop firms provide the necessary tax documents reflecting trader profits/losses.
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Can you make a living with prop trading?
It is possible to make a living with prop trading, but success depends on a trader's skills, discipline, and ability to manage risk effectively. Not all traders achieve consistent profitability, so it's essential to approach prop trading with a realistic understanding of the associated risks.
What are options trading prop firms?
Options trading prop firms, also known as proprietary prop firms. Are unique trading companies in the financial landscape that rely on their own capital for trading purposes rather than using funds from outside clients. These prop firms select skilled and adept traders who then trade on the firm’s behalf, and their primary objective is to generate profits for the firm itself.
While options prop trading firms focus on options contracts, it is essential to note that these prop firms also concentrate on other financial instruments such as futures, Forex, equities and commodities trading.
It is important to note that the limited availability of options trading within prop firms can be due to the inherently complex nature of option contracts and the additional risks that this instrument entails. Unlike traditional equities or Forex trading, options often involve the use of complex strategies, multiple variables, and the potential to incur huge losses. Proprietary trading firms often prioritize simplicity and risk management, aiming to cultivate profitable traders within a controlled environment. Incorporating options trading would require specialized training, advanced risk assessment tools, and a heightened focus on risk management. Therefore, prop firms often don’t have or undertake options trading in their firms, and it reflects their commitment to maintaining a profitable and risk-managed approach to trading culture.
Best options trading prop firms in 2024
| Company | Products Traded | Trader Types | Approach to Recruitment | Notable Features |
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Equities, Options, Futures |
Discretionary and Automated Traders |
Trainability, commitment, and drive for success |
Capital Sharing Program, remote and flexible trading options |
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T3 Trading Group |
Equities, Options, Futures, Retail and Algorithmic Trading |
Discretionary and Automated Traders |
Comprehensive evaluation process including exams and interviews |
Intricate evaluation process, emphasis on education and exams |
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SMB Capital |
Equities, Options, Futures |
Discretionary and Automated Traders |
Selective recruitment focused on commitment and mastery |
Meticulous selection process, growth-oriented environment |
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Optiver |
Listed derivatives, cash equities, ETFs, bonds, FX |
Screen Trading and Wholesale Trading |
Not specified |
Global presence, commitment to market efficiency |
Best prop trading firms in 2024
As you might observe, there are limited and less-known firms offering prop trading in options. So, for those who are seeking more established and reputable players in the prop trading industry, experts recommend exploring the following list of prop firms that are leaders in the Traders Union rating list.
Topstep – reputable prop firm offering funded accounts to global traders
TopstepTrader is recognized as a well-established options trading prop firm that extends funded accounts to traders worldwide. With a Trustpilot rating of 4.5/5 and a track record of over $2 million in profits withdrawn in 2020, this firm provides a legitimate and transparent service to aspiring traders. To secure a funded account, traders must demonstrate their ability to earn consistent profits as day traders, making it a suitable platform for those seeking capital backing to pursue their trading ambitions.
SurgeTrader – streamlined process and flexible trading options for funded traders
SurgeTrader is a prominent options prop trading firm offering a streamlined and efficient process for funded options trading. Unlike some competitors that require complex trials, SurgeTrader simplifies its procedures, appealing to traders seeking a hassle-free experience. Furthermore, the platform's flexibility in accommodating various trading activities, including Forex, broadens opportunities for traders to explore diverse markets. With a structured approach that includes a 4% daily loss limit, 5% maximum drawdown, and 10% profit target, SurgeTrader caters to traders of different expertise levels.
FTMO – well-known firm emphasizing "trading the news" with funded accounts
FTMO is a reputable prop firm known for providing funded trading accounts to eligible traders through a comprehensive two-part process. The initial FTMO Challenge evaluates traders' skills using a simulated account, followed by the Verification phase, which involves live trading. An interesting highlight of FTMO is its emphasis on "trading the news”, enabling options traders to capitalize on short-term market movements and volatility. Consistently recognized among Deloitte's Technology Fast 50, FTMO presents an appealing option for traders seeking capital backing with a focus on news-driven trading strategies.
OneUp Trader – fast-growing provider of funded accounts with advanced analytics
OneUp Trader has gained prominence as a fast-growing provider of funded accounts, offering account sizes ranging from $25,000 to $250,000. Featuring a user-friendly one-step process, OneUp Trader expedites the onboarding of eligible traders. The firm's requirement of trading for a minimum of fifteen days to meet the profit target positions it as an option for traders aiming for a rapid start. Emphasizing advanced analytics and supporting various trading platforms, OneUp Trader complements its offerings with a 4.7/5 Trustpilot score, signifying its legitimacy and appeal among traders.
Fidelcrest – access to diverse assets, flexible programs for options traders
Fidelcrest emerges as a versatile options prop trading firm, offering access to an extensive range of underlying assets, including stocks, indices, commodities, and Forex. Traders interested in the Pro Trader Program undergo a two-step evaluation process involving the Fidelcrest Trading Challenge (30 days) and Verification phase (60 days). For newer traders, the Micro Trader Program provides an opportunity to test skills with accounts ranging from $10,000 to $50,000. With the Pro Trader accounts scaling from $150,000 to $1 million, Fidelcrest caters to traders at various levels, reinforcing its standing as a notable prop firm in the options trading landscape.
| Prop Trading Firm | Minimum Deposit | Leverage | Instruments |
|---|---|---|---|
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$1 |
2:40 |
Futures of the CME group: stocks, commodities, bonds, metals |
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$125 |
Individually calculated |
Futures on currencies, stocks, indices, agricultural products, metals, energies, and Micro E-Mini futures |
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€99 |
Up to 1:100 |
Forex, CFDs on stocks, indices, metals, commodities, cryptocurrencies |
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$250 |
Up to 20:1 on forex and metals |
Currency pairs, cryptocurrencies, commodity market assets, stock assets |
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From €155 |
Up to 1:100 |
Currency pairs, stocks, stock indices, commodities, cryptocurrencies |
Pros and cons of joining an options trading prop firm
Joining an options trading prop firm can be both enticing and challenging at the same time, and it has both its advantages and disadvantages as stated below. Here are the pros and cons of joining an options trading prop firm.
👍 Pros
• Access to advanced options strategies
Options prop trading firms often provide training and resources for advanced options strategies. This includes strategies like straddles, strangles, iron condors, and spreads, which can offer higher potential returns compared to basic options trades
• Capital intensity for complex strategies
To execute advanced options strategies, a significant amount of capital is required for the strategy to be executed properly and to be profitable. Joining a prop firm provides traders with the necessary funds to engage in such high-volume strategies without the need to risk personal funds.
• Lower trading costs
Options prop trading firms often have lower trading commissions and fees due to the number of trades that they execute. This feature can significantly reduce the cost of trading options and is more beneficial for short-term traders who trade with high frequency.
• Risk Management tools for complex positions
Complex options strategies can involve multiple legs and have potential risks. Options prop firms offer advanced risk management tools that can help traders to analyze and manage their risk exposure very effectively.
• Real-time data and technology
Options trading often requires quick decision-making from traders and is heavily based on the use of real-time data. Options trading prop firms provide access to cutting-edge trading platforms and data feeds, enabling traders to respond swiftly to market movements.
👎 Cons
• Learning curve for advanced strategies
Advanced options trading strategies may require traders to understand difficult concepts and intricate calculations. New traders who join these prop firms may require some time and effort to effectively grasp and deploy these strategies.
• Market volatility impact
Options prices are heavily influenced by market volatility, and sudden market shifts can lead to unexpected changes in their values. This can affect complex strategies and result in losses, and thus it is advisable to trade with extreme caution.
• Limited autonomy in strategy selection
Some prop firms have specific strategies or guidelines they prefer traders to use. This can limit a trader's ability to execute their preferred options strategies, potentially hindering their performance.
• Timing sensitivity
Many advanced options strategies require precise timing for entry and exit. Traders need to monitor the markets closely and execute trades promptly, which can be demanding and potentially stressful.
What to look for in options prop trading firms?
When evaluating options prop trading firms, it's essential to take several critical factors into account to ensure the best fit for your trading objectives. Here are the key aspects to look for when choosing the right prop trading firm for your options trading endeavors:
Research the firm's specialization
First and foremost, you should identify those prop firms that specialize in options trading. Always look for firms that have a strong track record and have their expertise especially in options trading. This would ensure that their rules and regulations are designed in a way that they understand the complexities of the options market.
Evaluate training and education programs
Before joining an options trading prop firm, look for its education and training program and understand whether it covers both foundational and advanced options trading strategies. Furthermore, check if they have proper guidelines for managing risk, and if they provide market analysis specific to options. Also, check if the training includes real-world case studies, simulations, and hands-on practice with options trading platforms.
Assess capital allocation
Check the prop firm's capital allocation to traders for options trading. Always ensure that the capital is significant to carry out your desired trading strategies and risk tolerance. Moreover, understand the requisite terms and conditions for your desired trading capital, and keep in mind the profit-sharing arrangements.
Review trading platform and tools
Evaluate the firm's trading platform. It should offer advanced options trading tools such as options chains, probability calculators, and volatility analysis. Also. ensure that the platform provides real-time data feeds and efficient order execution, which is crucial for timely options trading.
Understand risk management policies
Look into the firm's risk management policies. Understand how they handle risk, set position limits, and provide guidelines to protect both traders and the firm's capital. Clarify if the firm offers tools or software to help traders analyze and manage the risks associated with options positions.
Research firm reputation
Research the firm's reputation within the options trading community. Look for reviews, testimonials, and feedback from current and past traders. Verify the firm's credibility by checking if it's registered with relevant regulatory bodies and has a history of ethical practices.
How to get into an options trading prop firm?
Entering an options trading prop firm requires a well-planned approach and dedication to stand out among the competition. Here are the key steps to get started on your journey:
Research and identify suitable firms
Begin by researching reputable prop firms that specialize in options trading. Delve into their trading styles, track record, and overall reputation to gauge their compatibility with your trading goals.
Submit an application
Once you've identified potential firms, submit a carefully crafted application. Tailor your resume, cover letter, and any required application forms to emphasize relevant skills and experiences. Highlight any previous trading background, proficiency in options strategies, and familiarity with trading software to showcase your qualifications.
Ace the interview and evaluation
If your application stands out, you may be invited for an interview. Prepare thoroughly for this stage, as it may encompass technical questions pertaining to options trading, behavioral inquiries to assess your work ethic and temperament, and perhaps a trading simulation to evaluate your skills.
Do the training program
Upon successful selection, prop firms typically offer training programs for new recruits. Engage wholeheartedly in these programs, as they equip you with essential skills and knowledge to excel as a trader within the firm. Training topics may include market analysis, risk management, and specialized trading strategies.
Start trading with the firm's capital
After completing the training program, you will begin trading with the firm's capital. This is a critical phase where you will be required to adhere to the firm's established trading strategies and risk management guidelines. Your performance will be closely monitored, and your ability to implement effective trading approaches will be key to your success within the firm.
Are options trading prop firms legal?
Yes, options trading prop firms are entirely legal and legitimate entities in the financial world. These firms operate as businesses that engage in trading activities using their own capital. However, it is advisable that you do your own research and thoroughly investigate whether the prop firm is regulated and compliant with your country’s rules and regulations.
Expert Opinion
When selecting prop firms for options trading, it is important to consider several key factors to find a suitable option that aligns with your trading goals. Specifically, it is recommended to examine the firm's reputation and reviews from real users, commission rates, capital distribution model, and risk management policy. The latter is especially crucial, given that engaging in options trading requires a highly informed risk assessment, specialized training, and the use of advanced tools. Only a well-founded choice will help you unlock the potential in trading and achieve substantial returns.
Methodology for compiling our ratings of prop firms
Traders Union applies a rigorous methodology to evaluate prop companies using over 100 quantitative and qualitative criteria. Multiple parameters are given individual scores that feed into an overall rating.
Key aspects of the assessment include:
Trader Testimonials and Reviews. Collecting and analyzing feedback from existing and past traders to understand their experiences with the firm.
Trading instruments. Companies are evaluated on the range of assets offered, as well as the breadth and depth of available markets.
Challenges and Evaluation Process. Analyzing the firm's challenge system, account types, evaluation criteria, and the process for granting funding.
Profit Split. Reviewing the profit split structure and terms, scaling plans, and how the firm handles profit distributions.
Trading Conditions. Examining leverage, execution speeds, commissions, and other trading costs associated with the firm.
Platform and Technology. Assessing the firm's proprietary trading platform or third-party platforms it supports, including ease of use, functionality, and stability.
Education and Support. Quality and availability of training materials, webinars, and one-on-one coaching.
Glossary for novice traders
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Trading
Trading involves the act of buying and selling financial assets like stocks, currencies, or commodities with the intention of profiting from market price fluctuations. Traders employ various strategies, analysis techniques, and risk management practices to make informed decisions and optimize their chances of success in the financial markets.
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Broker
A broker is a legal entity or individual that performs as an intermediary when making trades in the financial markets. Private investors cannot trade without a broker, since only brokers can execute trades on the exchanges.
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Options trading
Options trading is a financial derivative strategy that involves the buying and selling of options contracts, which give traders the right (but not the obligation) to buy or sell an underlying asset at a specified price, known as the strike price, before or on a predetermined expiration date. There are two main types of options: call options, which allow the holder to buy the underlying asset, and put options, which allow the holder to sell the underlying asset.
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Prop trading
Proprietary trading (prop trading) is a financial trading strategy where a financial firm or institution uses its own capital to trade in various financial markets, such as stocks, bonds, commodities, or derivatives, with the aim of generating profits for the company itself. Prop traders typically do not trade on behalf of clients but instead trade with the firm's money, taking on the associated risks and rewards.
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Risk Management
Risk management is a risk management model that involves controlling potential losses while maximizing profits. The main risk management tools are stop loss, take profit, calculation of position volume taking into account leverage and pip value.
Team that worked on the article
Chinmay Soni is a financial analyst with more than 5 years of experience in working with stocks, Forex, derivatives, and other assets. As a founder of a boutique research firm and an active researcher, he covers various industries and fields, providing insights backed by statistical data. He is also an educator in the field of finance and technology.
As an author for Traders Union, he contributes his deep analytical insights on various topics, taking into account various aspects.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).