Best Options Trading Prop Firms (2024)

Quick Look: Best Prop Firms for Trading Options

• Best for Options Funding: Funder Trading
• Best for Education and Support: Maverick Trading
• Best for Experienced Traders: Jane Street
• Best for Flexible Trading: T3 Trading Group
• Best for Intensive Training: SMB Capital

Best Options Trading Prop Firms

Here are the five best options trading prop firms to help elevate your options trading game to the next level.

1. Best for Options Funding: Funder Trading

Funder Trading, a prominent U.S.-based prop trading firm, is the only one that offers options funding without requiring certification or upfront trading capital. Providing live coaching, it supports traders in navigating the U.S. stock and options markets, letting them keep 100% of profits until they cover startup fees, followed by an 80/20 profit split in favor of the trader.

2. Best for Education and Support: Maverick Trading

Maverick Trading emphasizes educating and supporting options traders. Traders undergo rigorous training and certification before receiving funding. With ongoing coaching, mentorship and a trader community, the firm trades stocks and options on the U.S. market using an advanced proprietary platform. It offers prop traders 70% to 80% of generated profits.

3. Best for Experienced Traders: Jane Street

Jane Street, renowned for its competitive culture, selectively recruits highly talented traders through rigorous interviews and testing. It offers access to substantial capital, advanced technology and intricate strategies, allowing prop traders to navigate options and derivatives across diverse markets using proprietary algorithms. Compensation at Jane Street aligns with traders' performance and contributions and occurs through salaries and bonuses.

4. Best for Flexible Trading: T3 Trading Group

T3 Trading Group offers adaptable options for traders, allowing them to opt for remote or in-office trading and independent or team-based approaches. Traders access diverse platforms like Lightspeed Trading, Sterling Trading Tech and RealTick, exploring a wide array of markets and instruments. It also keeps between 50% and 90% of the earned profit.

5. Best for Intensive Training: SMB Capital

Based in Midtown Manhattan, New York, SMB Capital operates as a proprietary trading desk, offering a comprehensive program encompassing capital, proprietary tech, training, coaching and mentoring to nurture elite traders. Trading across equities, options and futures, SMB Capital funds both new and experienced discretionary and automated traders, providing learning opportunities from industry-leading traders with over 30 years of collective experience and authorship of books like "One Good Trade" and "The PlayBook."

What is Prop Trading for Options?

Prop trading for options means using a prop trading firm's capital to trade options contracts, which gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price and time. Options trading can offer high returns because of the leverage and volatility involved, but it also carries high risk and complexity.

Not all prop trading firms offer options trading, as some may focus on other markets or instruments such as futures, forex or stocks. Some prop trading firms may also have specific requirements or restrictions for options trading, such as the types of options, strategies, platforms or markets that are allowed. Options traders must work with a prop trading firm that suits their trading style, goals and preferences.

Benefits of Using Prop Firms for Trading Options

Some benefits of trading options through a prop firm include:

• More capital and leverage: Prop firms can provide traders with more capital and leverage than they could access on their own, increasing their trading opportunities and potential profits. They can offer lower margin requirements and interest rates than brokers or exchanges.
• Access to liquidity and execution: Prop firms improve trading by offering fast execution and lots of liquidity, reducing costs. They provide access to markets and instruments solo traders usually can't reach.
• Risk management and compliance: Traders can benefit from advanced tools prop firms provide for managing risks and complying with market regulations. Prop firms also oversee and adjust traders' positions to improve performance and balance risk.
• Education and mentorship: Prop firms offer training and mentorship to help traders learn and improve their skills. Traders also get feedback and access to a community of experienced experts for shared knowledge.

Challenges of Using Prop Firms for Trading Options

Trading options through a prop firm isn’t always smooth sailing, and you might run into issues such as:

• Loss of autonomy and control: Prop firms limit traders by enforcing strict rules on options, strategies and risk management. They can also adjust positions without permission, affecting performance.
• Reduced income: Traders might lose income as prop firms take a share of profits and charge fees. Contributing capital or paying fees can also reduce income.
• Loss of privacy and security: There's a loss of privacy as prop firms access personal and financial data, potentially risking cyberattacks or fraud, impacting security and leading to losses.

How to Choose a Proprietary Trading Firm for Options

Choosing the right options proprietary trading firm requires a thoughtful approach. Here are some tips to help you narrow your options and decide wisely.

Understand Your Trading Needs and Goals

The first step in choosing a prop trading firm for options is understanding your trading needs and goals. This approach means assessing your skill level and experience in options trading, determining your financial goals and risk tolerance and identifying the options and strategies you want to trade. This self-examination can help you narrow your options and eliminate prop trading firms that do not match your trading needs and goals.

Research and Evaluate Prop Firms

Research prop firms aligned with your trading goals, checking their reputation via websites, forums and reviews. Analyze trading platforms like NinjaTrader, TradeStation or MetaTrader for suitability. Evaluate tools like market data and indicators for trading efficiency.

Assess educational resources — quality, accessibility of courses, webinars, coaching. Also consider commission structures — compare costs (capital, challenge, subscription, desk fees) and profit splits for their impact on income.

Assessing Risk Management and Capital Requirements

Study risk management policies and procedures, such as the daily loss limit, maximum drawdown, position size, stop loss or trailing stop, and see how they affect your trading freedom and performance. You can also evaluate the capital requirements that prop firms impose.

Seek Recommendations and Reviews

After reviewing the risk management and capital requirements, you can ask for recommendations and reviews from other experienced prop firm traders or professionals. You might receive relevant referrals, opinions or advice. Reading online reviews dedicated to options traders may offer additional insights.

Contact and Communicate with Prop Firms

Contact selected prop firms and ask relevant questions about their services, platforms and policies. You can observe the responsiveness and professionalism of the prop firm's representatives to see how they treat you.

Trial Period or Simulator

Inquire about any trial periods or simulated trading opportunities prop firms offer, allowing you to evaluate their services without committing funds. You can use trial periods or simulators to test the prop firm's trading platform, tools and execution as well as your trading skills and strategies and see how they perform in real market conditions.

Making Your Final Decision

Finally, decide which prop trading firm to join for options trading. Weigh the pros and cons of each prop firm based on your research and experiences and consider the availability of customer support and assistance. You can also consider any additional perks or benefits prop firms offer like bonuses, rewards or promotions.

Compare Other Prop Trading Firms

Create Your Trading Strategies with a Prop Trading Firm

Options trading can be a rewarding and thrilling way to speculate on the financial markets, but it can also be challenging and risky. That's why joining a prop trading firm can be a smart and effective way to trade options as it can provide you with capital, leverage, liquidity, risk management, education and mentorship. Choosing the best prop trading firm for options trading is not a simple task, which is why Benzinga curated this list after careful research, evaluation and comparison.

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