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Best Brokers for Options Trading in India


Best Brokers for Options Trading in India 2022

As far as options’ trading is concerned, there are a lot of factors that affect the selection of the right broker. If you are an options trader, read our in-depth article to know what option trading is and find the best stock brokers to start options trading in India.

What is Options Trading?

Options are a contract between two parties to buy or sell an underlying security at a specified price on or before the pre-decided date. It is a derivatives instrument that gives the buyer of the options the right but not an obligation. There are two types of options contracts; Call Option and Put Option; the former gives the right to buy an underlying asset, whereas the later offers the right to sell an underlying asset. The option buyer pays the premium to the option seller.

Key factors to select the best broker for options trading

There are hundreds of discount and full-service brokers in the Indian brokerage space, and they are offering futures & options derivatives trading instruments. However, every broker may not be suitable for options trading. When searching out the best brokerage firm for trading in options, one must consider the following parameters;

  1. Brokerage: Discount brokers charge a fixed flat brokerage fee whereas, in the traditional plan, the brokerage fee is charged on a per-lot basis. It is obvious that a flat pricing model that charges a fixed brokerage per executed order helps options traders to save a lot on the brokerage they pay. To save on the brokerage front, you must prefer brokers who are charging a fixed fee from clients on options trading regardless of the number of lots.
  2. Trading Platform: Options traders look for an advanced options trading platform with all the essential features in it. Advanced or experienced traders should check for pro features & tools like options chain analyzer, virtual options trading, options calculator & strategy builder to create & analyze options trading strategies. Options traders may particularly prefer a mobile trading app platform to trade at their fingertips. Options trading is extremely risky therefore if you are a beginner, then you must look for experts research & advice to create the right option trading strategy. Brokers who offer a free education and learning platform will further enable newbie to learn the basics of options trading.

Based on these two parameters, here is a list of the best or the top stock brokers recommended for options trading in India.

Best Brokers for Options Trading in India 2022

Broker Options Account Opening Demat AMC Review Request Callback
ZerodhaFlat Fee Rs 20Online Rs 200 (Eq+Curr), Rs 300 (Eq+Curr+Com)Rs 300 PAZerodha ReviewOpen Account
UpstoxFlat Fee Rs 20Promotion offer: FreeFreeUpstox ReviewOpen Account
Paytm MoneyFlat Fee Rs 15 per orderFreeFreePaytm Money ReviewOpen Account
ProStocksFlat Fee Rs 15FreeRs 0 (Rs 1000 Refundable Deposit)ProStocks ReviewOpen Account
FyersFlat Rs 20 per orderFreeFreeFyers ReviewOpen Account
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  • 5paisaFlat Fee Rs 20FreeRs 300 PA5paisa ReviewOpen Account
    EdelweissFlat Rs. 10 per executed orderFreeLite:Rs.300, Elite:Rs.500p.a. [Free 1st Year]Edelweiss ReviewOpen Account
    Alice BlueFlat Fee Rs 15FreeRs 400 PAAlice Blue ReviewOpen Account
    Angel OneFlat Rs 20 or 0.25% whichever is lowerFreeRs 240 PA (Waived for 1st year)Angel One ReviewOpen Account

    Best Brokers for Option Trading - Final Verdict

    Zerodha ranked at the 1st position as the best broker for options trading on account of the flat minimal brokerage fee, Kite web and app options trading platform, and Sensibull options trading platform with many features like option analyzer, options strategy builder, virtual trading, etc. Zerodha is an excellent broker for beginners who want to trade in options because they can learn everything about options trading on the Varsity educational platform such as how to trade in options, what are the options trading strategies, how to analyze options chain, options greeks, and more. Besides Zerodha, Upstox, Prostocks, Angel One, 5paisa, Edelweiss are the other preferred brokers to start trading in futures & options derivative segment.

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    Zerodha FAQs

    Zerodha is one of the top discount brokers for option traders due to ultra-low brokerage charges at just Rs. 20 per order, Kite elegant and fast trading platform (web and mobile app), and trading tools. It is the first broker who has launched Sensibull, India’s 1st options trading platform with features like option strategy builder, option analyzer, open interest, FII & DII Data, comprehensive option chain, event calender, options trading tutorials, and others. Beginners can even do virtual trading in options on zerodha platform without using real money.

    Further, Varsity by Zerodha is a great platform for newcomers to learn about options trading such as its meaning, different types of options strategies, analyzing options chain, and more.

     

    You can activate BSE and NSE futures & options trading segment on Zerodha console online. Zerodha customers can activate or deactivate any segments on your account but once a segment is disabled, it cannot be activated in the next 12 hours. Here are the steps to activate options segment;

    1. Login to the Zerodha Console.
    2. On the top menu, click on the “Account” tab and then tap on the “Segment” option.
    3. Now, click on the relevant options; BSE –F&O and NSE –F&O of your choice.
    4. Tap on the Continue button.
    5. Now, select the income range and click on the checkbox.
    6. Upload the income proof and then tap on the “Submit” option.
    7. Once the request is placed, it will take upto 48 hours to activate the F&O trading segment.

     

    Zerodha discount broker facilitates online options trading through its Kite platform. Once you have enabled or activated the F&O trading segment, you can buy or sell options following the below steps;

    • Log in to your account on the Kite.
    • Add the desired option chain to the market watchlist.
    • Place a buy order for your favouriate option.
    • Check the options contract details.
    • Check the order execution.

     

    Upstox offers a user-friendly Pro website and Pro mobile app based trading platform and charges flat Rs. 20 brokerage fee on options trading. The online discount broker also offers many options trading tools like option value calculator, option strategy builder, an easy to use tool to build an option strategy and place upto 4 orders at a given time.

     

    Option strategy builder in Upstox is a great tool for option traders to create and place option trading strategy of your choice through the below steps;

    1. In the scrip details, click on the “Option chain” and then tap on the “Create strategy”
    2. Select the LTP of the strike price, and enter quantity, price, etc.
    3. Once entered, click on the “Add to strategy” and the order will be added.
    4. The strategy will be shown in the review tab.
    5. Click on the “Continue” tab to confirm the order.
    6. The orders placed will be reflected in the “orders” tab under the “Trades” option.

    Note: You can create upto a maximum of 4 orders as per the designed option strategy.

     

    Considering numerous factors such as brokerage, mobile app options trading platform, and options trading information, Zerodha is the best suited broker to start options trading in India. The discount stock broker charges Rs. 20 flat brokerage on trading in futures & options that helps option traders to save significant amount of brokerage and earn better return. Upstox, Angel One, Fyers, Prostocks are the other recommended brokers to trade in futures & options trading segment.

     

    If you are an option trader, then you may be interested to trade in options at the cheapest brokerage rates. Here is a list of the cheapest option trading brokerage firms in India;

    1. Zerodha, Best broker for option trading at Flat Rs. 20/order through the Zerodha Kite platform.
    2. Upstox, Trade in options at Flat Rs. 20 brokerage on the Upstox Pro platform.
    3. Prostocks, Rs. 15 per order flat brokerage on options.
    4. Paytm Money, cheapest option trading brokerage at just Rs. 10 per order.
    5. Edelweiss Broking charging Rs. 10 flat brokerage on options.

    Note: Brokerage is not the only factor to check before while selecting the best option trading broker as traders must check for the option trading platform features like virtual trading, option trading strategies, and more.

     


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