selfdirect finance What To Look For In Apps If Your Goal Is Options Trading?

What To Look For In Apps If Your Goal Is Options Trading?

Options are considered a spiky territory in the share market because of the presence of fewer successful anecdotes. Other than a lack of awareness of option chain and related concepts, a reason why options trading is a source of apprehension for many is that there aren’t many apps available that specifically focus on the options market. 

Nonetheless, the scarcity of platforms should not be a deterrent for curious traders. There are already many stock market apps, like mStock, that facilitate options trading while providing the facility to invest in stocks. By having a keen eye for specific features, it’s totally possible to succeed at options trading, even with an app that presents options trading as a secondary offering. These are the important features:

Real-time data feeds for options prices:

The price fluctuations of the underlying asset govern profits and losses in options trading. However, price fluctuations are not reflective of the asset and the options contract. In other words, a small movement in the asset price can result in a large movement in the options price. Therefore, it’s paramount for traders to seek out apps that offer live data on bid/ask quotes, open interest, volume, and other metrics.

For user experience, it would be a good idea to look for apps that provide charts reflecting live data, similar to how most stock market apps provide charts for the NIFTY stock market. mStock is one such app that offers these charts to help traders visualize the market, catalyzing comprehension and strategic optimization.

Advanced options orders:

Just like some apps allow investors to invest in SIP to stay disciplined, options trading entails many order types for position management, risk mitigation, and other goals. Ideally, an option trader should look for an app that lets them conveniently choose from multi-leg, conditional, and other types of orders. The ability to select advanced order types translates to never having to compromise on strategies.

Filters to find options meeting specific criteria:

Before investors invest in mutual funds, they take time to understand if the characteristics of their chosen fund match with their goals. The same applies to option contracts. A trading app that lets traders filter by underlying asset characteristics, implied volatility, open interest, volume, and other factors is likely to promise a good trading experience. Some apps may leap here and provide labels in addition to filters. It’s important to note that there may be more filters available, and the utility would depend on the goals of the trader.

Fast and reliable order execution:

Options trading is highly time-sensitive. Thus, no trader would want to face latency from the platform’s backend that obstructs a trade. While finding the exact order execution capability of an app would be difficult to determine without trying out the platform, it could be a good idea to connect with other app users and scrape for relevant reviews. This is a good indication that the platform is reliable.

To conclude, options can add great value to the investment portfolio if traders have every tool they need. When searching for apps for options trading, traders should look for features that can enhance user experience and help comply with the time-sensitive nature of options trading.

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