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What are the Different Types of Option Trading Software?

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  • Written By: Ben Taylor
  • Edited By: A. Joseph
  • Last Modified Date: 29 August 2016
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There are several types of option trading software suites available to both stock option buyers and sellers. Option trading software suites range in functionality and purpose from all-inclusive brokerage software platforms to free-to-try analytical and tracking tools. Software options exist to fill almost every niche that an investor might need to fill. They also are available for mobile devices, which could be beneficial to investors who need to make quick investment decisions.

Stock options are either "puts" or "calls" and are a sort of financial contract that allows the option buyer to buy or sell a specific security by a specific time. These contracts allow the option buyer to buy or sell the stock covered by the option at a better-than-market price. Call options allow the option buyer to buy the stock, called the underlying security, at a better-than-market price, and put options allow the buyer to sell the underlying security at a better-than-market price. Option buyers purchase stock options from option writers.

Trading platforms are software suites that allow the investor to research, track, buy and sell stock options. These types of option trading software suites tend to be all-inclusive and aimed at investors of all skill levels who want to buy and sell stock options and other securities. Trading platforms provide their clients with comprehensive information, including a good deal of free information, but to actually use the option trading software, the option buyer typically will need to purchase a subscription.

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Tracking tools are direct and straightforward option trading software applications that allow users to track the price, value and other statistics of a set of stock options. Stock options have an expiration date, so tracking tools tend to be particularly helpful. Some tracking tools offer more information than others, so shopping around for these and other option trading software applications will help the option buyer pick the best software.

Analytical tools are more inclusive than tracking tools, but not quite as inclusive as trading platforms. Generally, these option trading software applications provide the user with an aggregate of data pertinent to the options being followed. They also provide in-depth analysis of the selected options, which could include historical data represented as charts and graphs as well as press releases and commentary from industry experts.

Option trading software suites are also available for mobile devices. These suites can be useful to investors who trade stock options. Depending on the time sensitivity of an investor's options, finding a trading platform or other tracking or analytical suite that is compatible with a mobile phone or other device could be beneficial.

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