10 Best Options Trading Simulators [Virtual Practice] – ValueWalk

The Top Options Trading Simulator Available in 2021
<a href=”https://pixabay.com/users/PIX1861/”>PIX1861</a> / Pixabay

An options trading simulator allows you to practice trading options in real time without actually spending any real money. Options trading can be a very profitable strategy, but you have to know what you’re doing. Trading options enables you to profit by investing a set amount and betting on whether you think a stock price will increase.

What is Virtual Options Trading?

Virtual options trading involves using a platform as a learning tool to see what it would be like to buy options on stocks in real-world conditions. Many trading platforms and online brokers in the U.S. offer a stock trading simulator.

An options trading simulator should never replace advice from a broker or financial advisor. However, it can be an important tool to help you get experience using options chains and various option strategies.

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Virtual options trading provides a trading account that’s funded with a particular amount of virtual currency and access to a mock options market. You can practice placing orders on the platform and trying different methods without risking any capital.

Options trading is different than buying stocks because you aren’t obligated to buy any shares. That’s why they are called options. You take out a contract to buy a stock if the price reaches a certain amount.

It can be difficult to trade options for stocks on any American stock exchange, like the NASDAQ or the New York Stock Exchange. Thus, trading tools like options simulators can be very valuable.

Top 10 Options Trading Simulators

If you’re looking for the best options trading simulators, you’ve come to the right place. These easy-to-use virtual trading platforms will teach you a great deal about options trading and the stock market. You can try out your trading strategy on a trading platform without risking any actual money. Even if you have experience trading stocks, you will need to practice with options because they are much more complicated than stocks.

10. Options Industry Council

The Options Industry Council was created to provide information and educational resources about options trading. The organization’s website contains numerous resources for those who want to learn about options, including a trading simulator.

The Options Industry Council’s virtual trading simulator works like a data center that allows you to change the data to see how your trading strategies would work under various market conditions and time frames. The OIC’s trading platform also explains the various factors involved with the options pricing and how changing those factors will change the prices. It’s an excellent tool to try your hand at options trading and experiment with the stock markets.

9. MarketWatch Virtual Stock Exchange

MarketWatch’s Virtual Stock Exchange enables you to try out an options trading strategy in real time to see how much money you would be able to make if you actually bought the option. Trades can be done on options or stocks, which makes this one of the best simulators.

Investors can create a customized private or public game for others to play and choose a custom list of symbols to trade in their game. All trades are done in real time, so you can try your strategy using virtual currency and then turn around and make the investment in your real trading account if the effect is desirable.

8. paperMoney from TD Ameritrade

Investors can also try making trades using TD Ameritrade’s paperMoney simulator. It supports virtual trading on options, futures or forex. You can also use it to look at chart indicators and studies. Like with other simulators, you don’t risk any cash when you’re using the TD Ameritrade paperMoney platform.

The simulator is a great way to practice your trading skills, especially if you don’t have the funds to start trading or if you have the necessary capital but just don’t know where to begin. The simulator is also an excellent option for traders with experience who just want to test the performance of new strategies before paying commissions to their broker to make the trade.

7. Wall Street Survivor

Wall Street Survivor’s options trading simulator allows you to open a practice account funded with a virtual $100,000. One of the reasons Wall Street Survivor is one of the best options trading simulators is because it comes with more than 30 free courses in addition to the software. A stock trader can learn about trading options before putting their skills to the test.

They can also create their own games on the trading platform and enter monthly contests and compete for prizes. Wall Street Survivor also publishes newsletters to give traders some stock ideas to start with.

6. Stocks and Options Trading Simulator

ETNA Software’s Stocks and Options Trading Simulator offers both web and mobile access and includes features like option chains and multi-leg orders for beginners, fintech developers and educators. Many colleges and universities use ETNA’s simulator.

The trading platform provides life-like executions without risking capital and the option to have real-time quotes, including Level II quotes. The simulator also offers charts, news and watchlists and customizable trading dashboards with trading widgets.

 practice options trading
geralt / Pixabay

5. optionsXpress

The brokerage Charles Schwab acquired optionsXpress several years ago, which added multiple new tools and options to the platform. optionsXpress is actually an online broker that offers a number of unique tools. It’s one of the best options trading simulators because of how easy it is to use.

The platform organizes all of its tools according to experience level and type. You can access multiple order types, including something they call “Walk Limit,” and buy an options contract. optionsXpress also offers IRS, a notification assistant that displays account alerts, updates to tools and trade notifications.

4. Stock Option Quotes

This platform is actually a mobile app, so it won’t work on desktop or laptop computers. Stock Option Quotes touts itself as a stock and index option tracking tool for the U.S. stock market. It supports call and put options for most U.S. stocks, indices and exchange-traded funds.

Stock Option Quotes is easy to use and offers detailed option chain functionality for individual scripts and supports various expiration dates. The app displays full details on the stock or index, complete with charts. It supports daily, weekly, monthly and even yearly charts and is optimized for tablets.

3. TradeStation Mobile

TradeStation Mobile is available on Android and iOS devices. It offers an easy way to trade options, ETFs and more while on the go. TradeStation Mobile offers real-time streaming quotes and alerts on price and volume changes. It also provides candlestick charts with dozens of indicators and drawing objects.

The app supports custom time intervals and automatic notifications on positions that are moving a lot. TradeStation Mobile also offers risk measurement, volatility and probability of profits statistics for options trades. It’s a tool that’s designed to help with analysis for your investment portfolio.

2. Investopedia

Investopedia offers one of the best options trading simulators available. It offers $100,000 in virtual money to let you put your trading skills to the test. You can also compete with thousands of other traders. Investopedia offers trading challenges, or you can create your own.

The platform is integrated with Investopedia’s educational content, so you can learn quite a bit before you get started.

1. OptionsHouse by E-Trade

The number one best options trading simulator is OptionsHouse by E-Trade. The platform allows you to easily switch between real trading and simulated trading. E-Trade also launched an OptionsHouse mobile app a few years ago for investors who want to practice while on the go.

If you want to put your practices to use in the real trading part of the app, the fees are very competitive. It makes it easy to practice and then put those winning positions to work for you right away.

Why You Should Use an Options Trading Simulator

Practice Trading

Options trading simulators are software programs that let you practice trading option contracts so that you can learn what to do. They also enable you to see what the effect of your bet would be before you put down money on the bet. A trader can try out different circumstances to see whether they would earn any profits from the trade they’re thinking of.

Gauging performance ahead of time takes some of the risk out of your investment and helps you learn new strategies as an investor. You can study your risk tolerance and look at current market conditions in the real world.

Perfect tool for beginner investors

Investors who are just trying to learn should try a simulator before they enter the options market with real cash. This enables them to learn the rules and requirements of trading an options contract. They also get an opportunity to study analysis so they can understand the available tools before entering the market.

 option trading simulator online free
PIX1861 / Pixabay

FAQs

Can you make money in options trading?

Yes, you can get rich with options trading, but only if you know what you’re doing. The best traders can make 10% or $50 or even more per trade.

Does Warren Buffett trade options?

He doesn’t buy options, but he does sell them and plays the derivatives market. He typically doesn’t play the short side of the stock market, which means placing a bet in the options market that a stock will go down.

How do you recover losses in options trading?

There are various strategies that can help you fix a broken trade. For example, if you buy a call option on the long side, but the stock falls, you could roll the position down into a bull call spread. That increases the probability of turning a profit without increasing risk too much. Another way to recover losses is to roll down into a butterfly spread, which involves selling two calls and keeping one long call, and then buying another call with different dates.

What percentage of option traders are successful?

Only about 10% of options traders turn profits on their investments.

Do day traders trade stocks or options?

Day traders trade both options and stocks.

Final Words

All brokers will tell you that past performance is no guarantee of future success. Every trading strategy has its weaknesses, especially when you’re dealing with options. The market is fraught with risk, so anything you can do to mitigate it by practicing trades ahead of time will save you money.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. – Email: jacob(at)valuewalk.com – Twitter username: JacobWolinsky – Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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