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3 Best Virtual Options Trading Simulators in 2020 • Benzinga

While it may be possible to jump right into the options market with no experience, it’s a much better idea to gain some experience trading before you risk your money. A virtual options trading simulator can help you practice using varying order types and develop your trading strategy without risking your trading capital. If you’ve…

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While it may be possible to jump right into the options market with no experience, it’s a much better idea to gain some experience trading before you risk your money. A virtual options trading simulator can help you practice using varying order types and develop your trading strategy without risking your trading capital. If you’ve never traded options before, we highly recommend starting with one of our recommended virtual options simulators before you enter the market. 

Why Use an Options Trading Simulator?

The options market is dynamic — just like the stock market shifts and changes every day, the same options trading strategy might not work every day. A virtual options trading simulator mimics real market conditions, allowing you to test your trading strategy and practice executing orders before you risk any of your capital. Virtual trading simulators also often include virtual fees and commissions, which helps you get a better understanding of the actual transaction costs involved in options trading.  

Virtual options trading simulators are particularly useful for traders who have no experience with options. Even if you’ve traded stocks before, options trading has its own unique methods and vocabulary — you can benefit from learning these before you start to trade. Trading virtually lets you practice in a simulated environment without risking your trading capital to help you learn to avoid pitfalls.

Best Options Trading Simulators

There are dozens of virtual options trading simulators available on the market. If you aren’t sure where you’d like to begin your trading, consider a few of our top choices below.  

Best for Real Broker Practice: Power E*TRADE 

If you plan to trade with E*TRADE, you’ll find plenty of value in the broker’s Power E*TRADE platform. The Power E*TRADE platform provides you with a robust set of trading and charting tools. Practice using these tools, then transfer your strategy back to E*TRADE’s standard options trading platform when you’re ready to invest. 

Test your trading strategy and E*TRADE’s tools with no money at stake. 

Power E*TRADE also offers a comprehensive education section to help you learn more about the options market and how to use E*TRADE’s tools. The platform even offers a Snapshot Analysis tool to assist in visualizing maximum potential profits and losses, trading opportunities and exit plans without risking trading capital.  

Best for Mobile: TD Ameritrade “thinkorswim” paperMoney

TD Ameritrade’s thinkorswim platform is renowned in the investment industry as the forerunner of trading platform analysis software. But did you know that thinkorswim also extends to mobile? A thinkorswim paperMoney account allows you to access TD Ameritrade’s groundbreaking mobile trading tools and platform using $100,000 in virtual funds. 

TD Ameritrade’s thinkorswim paperMoney platform allows you to practice trading options on-the-go. 

PaperMoney accounts offer you full access to TD Ameritrade’s massive range of tools and features — and the mobile platform allows you to perform any trade available on the desktop platform. Work on your trading strategy without impacting your trading capital and master thinkorswim’s platform with a paperMoney account. 

Best for “Gamification:” Investopedia Stock Market Game

Does competition motivate you to learn? If so, you might enjoy Investopedia’s Stock Market Game, which also allows options trading. Compete with over 700,000 other investors in a fun, interactive environment while you explore the market and trade with $100,000 in virtual money. You can invite your friends to play along with you and compete to see who can make the most profitable trades.

Compete with your friends in a fun, educational environment with Investopedia’s Stock Market Game. 

Investopedia’s robust community and variety of trading tools can make learning how to trade significantly more motivating — and fun.

What is Virtual Options Trading?

Virtual options trading allows you to practice trading options without risking money. When you sign up with a simulator, you’ll receive an account prefunded with a set amount of trading funds and access to a mock options market. Most options simulators attempt to mimic the real NASDAQ, New York Stock Exchange and other stock markets as closely as possible.

Using your virtual trading platform, you’ll practice reading options chains and placing options orders without the possibility of losing money. You can practice buying, selling and executing orders during regular market hours, which can allow you to explore platform features and strategies without the possibility of losing your capital. 

Pros and Cons of Options Trading

Understanding both the pros and cons of options trading is important. Let’s take a look at some of the benefits and drawbacks of options. 

Pros

  • Limited risk: As the buyer, you can choose to execute an options contract or allow it to expire if fulfilling the contract would mean a financial loss.

If you choose to allow an options contract to expire, you’ll only lose the money you put down in a deposit. If you execute the contract, there’s no limit to the amount of profit that you can take if you go on to sell the asset.

  • Less upfront financial commitment: When you purchase an options contract, you’ll only need to pay a premium upfront. If you exercise the option, then you will have to put up the money required to buy the stock at the strike price of the option. You can also sell the option back before expiration to avoid this. You only pay a fraction of the stock’s price to hold the option and participate in favorable market moves. You’ll tie up less trading capital using an option position instead of holding a position in the underlying stock.
  • Ability to ensure a stock’s price: Options allow you to speculate on a stock’s future without investing in the full price of the stock. For example, imagine that you want to purchase shares of Company X’s stock, but you aren’t sure if their stock will increase or decrease in the future. Buying an options contract on a stock lets you purchase the stock at its strike price at or before the expiration, although you also need to factor in the initial premium paid to get your overall purchase price for the stock.

Con

  • Potential for more loss as a seller: If you sell a call options contract and the price of the stock you hold goes up, you generally lose money if the stock price ends above the strike price (plus the premium you received at expiration) and you are still holding the short position. This can mean very high losses in exchange for a relatively small reward.

How Virtual Trading Platforms Work

Virtual options trading is similar to real options trading. Your virtual options simulator will provide you with a virtual wallet preloaded with a set amount of virtual currency. Your simulator will then mimic the actual circumstances of the current options market as closely as possible, allowing you to practice your trading strategy as the market changes. As you practice “buying” and “selling” puts and calls, you’ll track how well you’re doing by monitoring your demo account movements.

If you choose a simulator associated with a brokerage that offers options trading, you’ll also get to practice using your broker’s charting and analysis software. These simulators also include standard fees and commission along with your trades so you can better estimate what you’ll pay in fees.

Even the best simulator cannot perfectly mimic market conditions. Your options simulator won’t be able to account for your personal risk tolerance, trading horizon, taxation needs and more. You also cannot perfectly mimic the market psychology that comes with real options trading, as actual cash is never at risk. However, this relatively stress-free environment is the ideal place for a beginning trader to start learning

Benzinga Options Newsletter

Though market simulators can be helpful to beginners, up-to-the-minute market knowledge is the most powerful tool that you can have at your disposal. Do you have time to spend hours a day researching the morning’s most profitable trades — and the skill to analyze the markets accordingly?

If you prefer to leave your research to the professionals, subscribe to Benzinga Stocks To Watch today. You’ll receive daily recommendations and breaking news from the industry’s top analysts, researchers and news correspondents delivered straight to your inbox before the market opens each day. Trade-ready and easy for even total beginners to understand, you can’t afford to trade without Benzinga Stocks To Watch in your email list.

Making Your Way Into the Options Market

If you’ve traded stocks before, you might assume that you’ll have no problem entering the options market. However, options trading is completely different than stock trading — and you may even find yourself overwhelmed when reading your first options chain. Even the most experienced stock trader can learn from a virtual options simulator or a paper trading account. And in an industry where knowledge is power, you’ll want to get as much practice as possible before you risk any of your trading capital.

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Donald Trump blasts ‘fools’ who oppose good Russian ties

US President-elect Donald Trump has posted a progression of tweets censuring the individuals who contradict great relations with Russia as “‘dumb’ individuals, or nitwits”.

Mr Trump promised to work with Russia “to comprehend a portion of the numerous… squeezing issues and issues of the WORLD!”

His remarks came after an insight report said Russia’s leader had attempted to help a Trump race triumph.

Mr Trump said Democrats were to be faulted for “gross carelessness” in permitting their servers to be hacked.

In a progression of tweets on Saturday, Mr Trump said that having a decent association with Russia was “no terrible thing” and that “lone “idiotic” individuals, or simpletons, would believe that it is awful!”

He included that Russia would regard the US increasingly when he was president

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Broker news

Bulls and Bears Took on More Currency Exposure in Week Through January

he most striking improvement among theoretical situating toward the finish of a year ago and the primary session of 2017 is not that modification were little. There was just a single gross theoretical position modification of more than 10k contracts. With sterling apparently not able to maintain even humble upticks, the bears added 13.1k contracts to the gross short position, lifting it to 120.2k contracts.

Or maybe, it is eminent that examiners for the most part added to positions, long and short, as opposed to close positions at the very end of the year. Examiners added to net long outside cash prospects positions, aside from in the Japanese yen and Swiss franc where 2.6k and 2.5k contracts were exchanged separately. Examiners likewise added to gross short positions. Here there was just a single exemption, the Japanese yen. Despite the fact that the dollar shut comprehensively higher in front of the end of the week, every one of the monetary forms we track here, spare the Mexican peso, picked up against the dollar in the three sessions since the finish of the CFTC reporting period.

Every once in a while it is helpful to review why many market members take a gander at the theoretical situating in the cash fates advertise. It is not that the outside trade is essentially a prospects showcase. It is principally an over-the-counter market in which every day turnover midpoints in abundance of $5 trillion a day.

Trade exchanged monetary forms and alternatives represented around 3% of the normal day by day turnover as indicated by the BIS study. Be that as it may, past reviews have discovered some contemporaneous connection between’s market heading and net position changes. We think it additionally offers knowledge into a specific market section of pattern supporters and energy brokers. It is not by any means the only device, yet one of a few data sources.

One ramifications of this is albeit theoretical positions in the money fates market are moderately extensive, it is still little contrasted and the money showcase. Along these lines, it is difficult to see the genuine essentialness of a record vast position, as though there is some market top. At some point, examiners are not driving the costs, possibly there is another fragment, national banks, enterprises, as well as genuine cash that is more essential at any given minute.

We invest some energy taking a gander at gross positions instead of just net theoretical positions, which is the more customary approach. We think a more granular look is frequently fundamental. There is a distinction between short-covering, for instance, and new purchasing, however it appears to be identical in the net. Additionally, the gross position is the place the introduction is not the net position. A net position of zero does not mean the market is nonpartisan. Net positions could be huge, which implies a short press or a negative stun could in any case troublesome. The positions that must be balanced are captured in the gross measure not the net figure.

We find numerous customers are likewise keen on theoretical situating in the US Treasuries and oil. The net and gross short theoretical Treasury position has swelled to new records. The bears added 23.8k contracts to the as of now record net short position, lifting it to 616.2k contracts. The bulls attempted to pick a base and added about 20k contracts to the gross long position, which now remains at 471.2k contracts. These modification prompted to a 3.8k contract increment in the net short position to 344.9k contracts.

The bulls delayed in the oil prospects toward the finish of 2016. They exchanged short of what one thousand contracts, leaving 608.1k gross in length contracts. The bears added 4.1k contracts to the gross short position, giving them 168k. These conformities trimmed the net long position by very nearly 5k contracts to 440.1k.

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3 ways to profit in the ‘year of the dollar’

In December, the Federal Reserve raised loan fees for the second time since the Great Recession and included the desire of a 2017 financing cost climb to its gauge. Furthermore, only a couple days prior, the abundantly anticipated minutes from the most recent Fed meeting demonstrated the most hawkish tone from the national bank in two years.

In the meantime, Europe has been dove into political turmoil after a year ago’s Brexit vote and the later abdication of Italy’s leader. Somewhere else, the Bank of Japan proceeds down the way of negative rates and forceful security purchasing.

Put it all together, and it isn’t astounding that the U.S. Dollar Index is up against 14-year highs.

Speculators may have missed so much discussion on account of babble about the Dow Jones Industrial Average at the end of the day almost hitting 20,000. Be that as it may, paying little respect to your assignment to stocks or your venture skyline, this sort of huge picture incline in the dollar implies right now is an ideal opportunity to position your portfolio to benefit and, maybe most critical, to keep away from a portion of the pitfalls that can originate from a solid local cash.

Here are a couple ideas dollar exchanges ought to consider:

Residential plays over multinationals

There’s a considerable measure of seek after shopper stocks in 2017 on account of an enhancing work market and any desires for a jolt under a GOP-controlled Congress and President Donald Trump. In any case, remember that not all retailers are made equivalent especially those with abroad operations that are adversely affected by the wide dissimilarity in monetary standards at this moment.

For example, retailer Wal-Mart Stores Inc.(WMT) said troublesome money trade rates shaved very nearly 2.5% off profit for each partake in the second quarter of 2016. On the other hand consider that in the monetary final quarter of 2016, athletic attire goliath Nike Inc.(NKE) saw its income development cut down the middle because of forex weights, from 12% year-over-year in consistent cash measures to only 6% including real money changes.

To take advantage of the “reflation” exchange that numerous financial specialists are counts on in 2017, you need to represent the headwinds that a solid dollar are making for multinationals at this moment. The most ideal approach to do that is to consider customer plays that do by far most of their business here in the U.S. – for example, Foot Locker Inc.(FL), which has been an uncommon splendid spot in retail throughout the most recent couple of years.

Supported money ETFs

Obviously, in the event that you need a steady portfolio, you can’t just purchase just local centered values. Geographic expansion is similarly as imperative as enhancement crosswise over parts and resource classes. Such a large number of financial specialists keep on holding worldwide plays in light of a legitimate concern for a balanced portfolio, regardless of the possibility that it implies battling a daunting struggle as a result of a solid dollar.

The uplifting news, notwithstanding, is that you don’t need to leave yourself to torment through a solid dollar and a powerless euro when you put resources into Europe. Nor do you need to stress over the yen-dollar conversion standard when you put resources into Japan. That is on account of there’s an entire group of cash supported ETFs to permit financial specialists to put their cash in outside business sectors yet keep away from forex issues.

Consider that Japan’s Nikkei 225 file is up around 25% from its July 2016 lows. The WisdomTree Japan Hedged Equity Fund(DXJ) is up 35% in a similar period on account of assurance from forex issues and a somewhat better-performing rundown of stocks – while the non-supported iShares MSCI Japan ETF(EWJ) is up only 10% in a similar period because of battling a difficult task against a solid dollar.

In the event that you need to differentiate your portfolio comprehensively, you ought to consider supported assets that incorporate the Japan-centered DXJ, the WisdomTree Europe Hedged Equity Fund(HEDJ) to play Europe or the iShares money Hedged MSCI EAFE ETF (HEFA) for developing markets.

Dollar list ETF

In the event that you are searching for an immediate play on a rising dollar as opposed to putting resources into stocks, figuring out how to exchange remote trade can appear like an overwhelming undertaking. Gratefully, there’s the PowerShares DB US Dollar Index Bullish Fund(UUP).

This ETF is attached to the U.S. Dollar Index, which is a measure of the greenback against a wicker container of other worldwide monetary standards including the yen and the euro. It’s a straight money play, however that doesn’t make it straightforward or hazard free. In the event that the dollar debilitates, you’ll lose cash similarly as though you’re putting resources into a stock that has fallen on difficult circumstances. Furthermore, obviously, PowerShares takes a little cut of your speculations en route that indicates 0.8% yearly, or $80 a year on each $10,000 contributed.

Still, in the event that you need to conjecture on the dollar or support against a solid U.S. cash keeping down other worldwide ventures on your rundown, it’s maybe the least demanding approach to do as such for generally financial specialists.

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