The 8 Best Options Trading Platforms in Canada

Navigating the labyrinthine world of options trading can be a daunting task in Canada. From the uninitiated beginner to the seasoned investor, everyone needs a reliable platform that aligns with their trading goals, offers robust tools, and doesn’t break the bank with fees.

This comprehensive guide gives you an updated look at the best options trading platforms in Canada, based on pricing, features, and overall usability.

1. Questrade

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Questrade is one of Canada’s leading brokerages suitable for options traders across backgrounds – from beginners to experts. The brokerage offers multiple platforms through which traders can execute options trades: (i) Questrade Trading (web-based), (ii) QuestMobile, (iii) Questrade Edge Mobile (advanced mobile trading), and (iv) Questrade Edge (desktop platform with advanced capabilities).

As a beginner or intermediate investor, the first two platforms will cover most needs. More advanced traders can use Questrade Edge for multi-leg strategies and deeper analysis.

Questrade also continues to offer strong educational resources, making it one of the most beginner-friendly platforms in Canada.

Pricing

Questrade offers commission-free trading on stocks and ETFs, and options trading as low as $0 per contract.

Standard pricing available to all traders is $9.95 + $1 per contract. Active traders have optionality between fixed pricing of $4.95 + $0.75 per contract or variable pricing of $6.95 + $0.75 per contract.

Other Considerations

Questrade has a minimum balance of $1,000 for customers aged 18 to 25 who are operating a self-directed portfolio. The only exception is customers opening a FHSA where the minimum amount drops to $250.

Based on regulatory guidance, Questrade also has 4 different account levels for options traders to choose from: (i) Level 1 allows for long calls and puts with no minimum equity required, (ii) Level 2 allows for covered calls and puts with no minimum equity required, (iii) Level 3 allows for spreads with a minimum of C$5,000 in equity, and (iv) Level 4 allows for naked calls and puts with a minimum of C$25,000 in equity.

2. Qtrade

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Qtrade is a Canadian brokerage known for its clean interface and strong user experience. While earlier pricing made it less competitive, it is now one of the most attractive mainstream brokers for options trading in Canada.

Pricing

Standard pricing available to all traders is $0 + $0.75 per contract.

Other Considerations

There is no minimum account balance you need to have. However, there is a $25 per quarter administration fee which is waived if you hold at least $25,000 in assets. There are also charges for account closures within a year ($100) and transfers out of accounts ($150).

3. Friedberg Direct

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Friedberg Direct is the Canada-based online discount brokerage of the Friedberg Mercantile Group Ltd. Through the AvaOptions platform, Friedberg Direct enables multiple option strategies. The platform also offers educational tools on technical and fundamental analysis, an economic calendar, and other market updates to help traders make more informed decisions.

Pricing

The brokerage’s Standard account is suitable for most traders. Friedberg Direct charges the spread (i.e., the difference between the buy and sell price) multiplied by the size of the position in either the FX or CFD trade you make.

Other Considerations

Friedberg Direct requires a minimum account balance of $5,000. There is also an Active trader account that offers lower spread costs; however, this account requires higher trading volumes.

4. Webull Canada

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Webull Canada is a newer entrant in the Canadian brokerage space and is designed for investors who want a modern, low-cost trading experience with advanced tools. The platform offers access to CA and U.S. stocks, ETFs, and options, along with real-time data, advanced charting, and a highly intuitive mobile and desktop interface.

Webull is particularly appealing for investors who want low commissions combined with powerful trading tools, making it a strong option for more active traders.

Pricing

Webull Canada offers commission-free trading on supported products, including U.S. stocks and options.

While commissions are $0, users should be aware that regulatory fees, exchange fees, and other trading costs may still apply.

Other Considerations

Webull Canada supports multiple account types, including cash accounts, margin accounts, TFSAs, and RRSPs. The platform provides access to real-time quotes, advanced charting and analytics tools, and options trading on U.S. equities, ETFs, and index options. Real-time data for the Canadian market is complimentary for the first month and available by subscription thereafter. Webull is regulated by CIRO and is a member of CIPF.

Promotion

Hardbacon users can access an exclusive offer. By depositing or transferring funds, you can receive up to $250 CAD in trading vouchers. A deposit of $500 or more unlocks a $50 trading voucher, while a net deposit of $20,000 or more unlocks up to $200 in additional trading vouchers, provided the funds are maintained for 90 days. Trading vouchers can be redeemed after placing eligible trades and are credited to your account once conditions are met.

5. BMO InvestorLine

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BMO InvestorLine is the brokerage platform owned by the Bank of Montreal that enables the trading of stocks, ETFs, and options traded on American and Canadian exchanges, as well as mutual funds, bonds, GICs, gold and silver. As an added benefit, users of BMO InvestorLine receive access to research and analysis tools, proprietary research from providers such as Morningstar and S&P, and analyst ratings from BMO’s equity research team.

Pricing

For all options orders placed online through the BMO InvestorLine platform, a flat fee of $9.95 + $1.25 per contract is charged.

Other Considerations

While there is no minimum required balance to open an account, a $25 fee is charged each quarter on non-registered accounts holding less than $15,000. For registered accounts with under $25,000 in assets, an annual administration fee of $100 is charged.

BMO InvestorLine also has additional resources and capabilities as part of its Active Trader offering that include market research, advanced charting, and screens. To qualify for Active Trader status, the accountholder needs to either execute 15 or more trades per quarter or hold $250,000 in assets.

6. InteractiveBrokers

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InteractiveBrokers Canada is widely reputed as the preferred choice for advanced-level traders. With a user base spanning over 200+ countries, the brokerage’s powerful trading capabilities span mobile, web and desktop platforms. The brokerage also provides trading tools to screen market opportunities, manage investment portfolios, and support decision-making through advanced charting functionality.

Pricing

Commissions on options trades are volume-based. U.S. options are typically priced between USD $0.15 and $0.65 per contract, depending on trading volume and routing.

Other Considerations

Many of Interactive Brokers’ top users are institutional investors, and the trading platform is built to cater to more advanced needs. As a beginner, Interactive Brokers may feel more complex compared to other platforms.

There is no minimum amount required to start trading options on Interactive Brokers, and inactivity fees are no longer charged.

7. TD Direct Investing

TD Direct Investing is the online brokerage arm of TD Canada Trust, one of the nation’s largest banks. It facilitates access to multiple asset classes including stocks, bonds, mutual funds, ETFs and GICs, and remains one of the most widely used bank-owned brokerages for options trading.

Users can select between three platforms: (i) the web-based WebBroker, (ii) the TD Direct Investing mobile app, and (iii) the Advanced Dashboard, which offers more advanced tools and analytics.

Pricing

TD Direct Investing charges commissions at a rate of $9.99 + $1.25 per contract for options. For active traders (defined as those who place 150 or more trades per quarter), the price drops to $7.00 + $1.25 per contract

Other Considerations

While there is no account minimum required, there is an inactivity fee of $25 per quarter if the account balance is below $15,000.

8. RBC Direct Investing

RBC Direct Investing is a brokerage owned by the Royal Bank of Canada. The platform caters to investors of all backgrounds and offers access to stocks, bonds, ETFs, mutual funds, GICs, and options.

With both web and mobile platforms, users also benefit from research tools and insights published by RBC. The platform also offers a ‘Practice Account’ feature that allows users to simulate trades before investing real money.

Pricing

All traders are charged $9.95 + $1.25 per contract while active traders (150+ trades per quarter) receive a discounted rate of $6.95 + $1.25 per contract.

Other Considerations

RBC Direct Investing does not have an investment minimum and covers up to $200 of transfer fees when $15,000 or more in eligible funds is transferred from an external brokerage.

The ABCs of Options Trading in Canada

An option is essentially a contract that gives its holder the right to buy or sell the underlying security in the contract at a specified price within a fixed time period in the future. It is important to note that the option contract is one where the buyer has the right to execute the action specified (known as ‘exercising the option’), but is not in any way obligated to exercise. 

To receive this privilege, buyers pay a ‘premium’ to the sellers of the option. That means that if the markets move in a favourable direction to the buyer’s option, the buyer can buy the security at the price defined in the contract regardless of where it is trading in the market. On the other hand, if the price becomes unfavourable, the buyer would simply choose to not exercise the contract and let the option expire worthless.

Options are traded by both individuals and institutions for a wide range of purposes including speculative profits, hedging investments, and managing the risk profiles of their overall portfolio. While the use of options can amplify returns on a portfolio, it is also critical to remember that they have increased risk as well compared to conventional stock and bond investments.  

There are some key terms that all prospective options traders should keep in mind before beginning their journey:

Call option

A call option is a contract that gives the buyer the right to buy the underlying asset at the pre-defined price sometime in the future (known as the ‘strike price’, as defined below). In a call option, the buyer makes money if the market price of the underlying security goes above the strike price within the time period stipulated in the contract. Therefore, a trader that buys a call option has confidence that the underlying security will rise in price.

Put option

A put option is a contract that gives the buyer the right to sell the underlying asset at the pre-defined price sometime in the future. In a put option, the buyer makes a profit if the market price of the underlying security goes below the strike price. Therefore, a trader that buys a put option has conviction that the underlying security will fall in price.

Strike price

The strike price is the price at which an option contract becomes exercisable. A call option holder will choose to exercise an option if and when the market price (or the ‘spot price’) goes above the strike price. A put option holder will choose to exercise their option if and when the spot price is below the strike price.

Options expiry

Every option comes with an expiry date. This expiry date is the last date by which the holder of the option contract can choose to exercise their contract. 

Illustrative Examples of Puts and Calls

An option contract is usually priced based on 100 units of an underlying security. Therefore, if the price of an option for a stock is $3, you will pay a total of $300 ($3 x 100 shares) to acquire the option. 

Call option

Imagine a fictional Company ABC that is currently trading at $50 per share on the open market. You believe that this stock is undervalued and that it will rise up to $75 in the near future. So you decide to buy a call option at a strike price of $5 per share. Your premium paid is therefore $5 x 100 shares = $500.

In the next month, you are proved right and the stock does rise to $75 as you had predicted. Since you have the right to buy the shares at $50 per share, you exercise your option and pay $5000 ($50 x 100 shares) to acquire the shares. Next, you sell them for $75 per share to net $7500. 

Your profit from the call option is therefore $7500 (your sale price) – $5000 (your strike price) – $500 (your premium) = $2000.

In summary, you only profit in a call option once the market price of the security goes above your strike price + your premium per share paid. If that does not happen, you can let the option expire worthless and would lose the $500 you paid as a premium.

Put option

The reverse is true for a put option. Now imagine you had a negative view of Company ABC and believe that the stock is overvalued and should only be $30 per share instead of $50. This time, you decide to buy a put option with the same premium ($5 x 100 shares = $500). 

When you are proved right, your profit is your strike price minus the market price and premium paid. In other words, your profit would be $50 – $30 – $5 = $15 per share ($1500 in total).

Now that we’ve covered the basics of options, let’s take a look at the brokerages that allow Canadians to trade them. In Canada, there is a multitude of online brokerages offered by both major chartered banks and independent providers.