Online Options Trading Pros and Cons
PROS
1.Cost
The 1st and most obvious advantage of online options trading is cheaper commission fee.
Back in the old days, a full service brokerage could cost up to $100 per trade. This in one way or another placed a barrier to get people’s feet wet in the field.
Today, because of the ease to access internet, online brokerages reduce the fee to as much as $1 or lower per trade depending on who you are dealing with.
However, you as a trader can make or break based on how timely your trade get executed and filled. So, search around and make sure your broker’s technology can help you to obtain a good fills.
2. Information and the Power of Technology
Also because of the internet, online trading benefits from a wealth of knowledge being offered on the internet. This included paid and free materials such as what you are reading on this website/blog.
Moreover, online brokerages provide real-time quotes/chart as well as related news and analysis. They are also able to customized to individual trader’s account.
You now can reduce your cost of trading even further. Free brokerage software can plot Moving Average, MACD and risk graph and calculation of Max Risk and Profit, etc.
This, only a few years back, was only a paid option.
The speed of communication allows traders to engage with shorter-term trading. Instead of trading on daily or weekly basis, you can trade on mins and hours of market up-0and-down. The time lag in-between that existed with human brokerage has reduced to practically nothing.
3. Tax Deductions
I am not CPA or tax expert so you need to check with your own professional about this.
In my experience, commission fee you pay for you online brokerage cannot be claim as an business expense.
However, you can claim your computer-related costs such as monthly subscription, trading software and tools.
Again, please refers to the licensed tax guru.
CONS
The only and potentially negative thing about online options trading is that if you are a beginner.
Instead of talking to a broker, you will have to get familiar with the software and programs the broker provides.
This can be very daunting and make it easy to own unexpected trade.
Generally, if you are serious enough about trading options, the learning on the technology side should not be the thing that makes you quit.
However, the words of wisdom from seasoned traders are if you are just starting out, get a broker that you can talk to and understand options very well.
He can stop you from ordering wrong contracts or combination of options. If you say:’ I think the market is going up, I want to buy some puts’, hopefully he will tell you:’ What? are you stupid’? 
No, I am kidding. Most of them are not that harsh.;)
Bottomline is if you are a novice, having a human broker that you can talk to is not a bad thing. Once you gain more experience, you can move to 100% online trading.
Happy trading,
Category: Options Trading
