In This Article

  1. What is an Options Trading Simulator?
  2. Why You Should Use an Options Trading Simulator
  3. The Top 5 Options Trading Simulators
  4. The Bottom Line: Options Trading Simulators

Whether you are a new or experienced options trader, the best chance to make a profitable trade is when you’re confident in what you're doing and confident in your strategy.

What if you’re not necessarily confident? What if you’re still trying to refine your options trading strategy? 

How can you practice without risking your hard-earned money?

Using an options trading simulator. 

In this article, we’ll explore how an options trading simulator can help you master options trading.

What is an Options Trading Simulator?

An options trading simulator is a tool that lets you use pretend money to trade options in a live market without losing real money.

We’ll look at the advantages and disadvantages of an options trading simulator next. 

Advantages of an Options Trading Simulator

Risk-Free

Because you’re trading with pretend money, there’s no chance of you losing your hard-earned money. It’s a risk-free opportunity. 

Valuable Experience 

You can read about trading options, but it's different when trading in real-time. You can gain valuable experience — especially if you are a beginner investor — with an options trading simulator. 

Disadvantages of an Options Trading Simulator

Unrealistic Order Fulfillment 

In reality, there are not always enough buyers and sellers in the market. Therefore, unlike demo accounts, some orders are not filled trading live.

Overconfidence 

Delayed data and other differences between options trading simulators and live trading may build your confidence. Keep in mind this feeling can become an obstacle when you begin trading with real money.

Why You Should Use an Options Trading Simulator

Now that you know the advantages and disadvantages of using an options trading simulator, let’s explore 3 reasons why you should use one, whether you are a beginner or an experienced options trader. 

Reason #1: Practical Experience for New Investors

Using an options trading simulator can help you build good trading habits. These tools allow you to practice and put in place your options trading strategies

In doing so, you will also learn the mechanics of placing trades so that there are no mistakes when real money is on the line.  

Reason #2: Develop Psychological Discipline

The experience gained using an options trading simulator will help you stick to your plan and avoid over-trading or impulse trading.   

Reason #3: Access to Education

Most options trading simulators offer resources to educate option traders. It’s this knowledge that can help you lower your risk and increase your profit. 

The Top 5 Options Trading Simulators

Here are the best option trading simulators for you to utilize. 

Power E-Trade Paper Trading

Without the high membership price associated with other platforms, this popular options trading simulator helps users:  

  • Understand risk and reward probabilities 
  • Learn “plain-English translations of industry jargon”
  • Set up exit strategies 
  • Read over 100+ technical studies
  • View a stocks’ expected price move

To sign up with E-Trade, click here

Investopedia

“Trusted by over three million educated investors”, Investopedia, along with an options trading simulator, boasts an impressive content library to help you learn more about the craft. 

To make the learning process less stressful and more fun, you can utilize trading challenges with other members. Their platform includes:

  • $100,000 in virtual cash
  • The ability to learn the methods and strategies of more than 700,000 traders
  • You can create trading challenges to sharpen your skills 

To register for free, click here

Wall Street Survivor

“Learn, practice, earn.”

If you already have a trading strategy in place, and you’re looking for more practice, a great tool is Wall Street Survivor. 

Its platform, both desktop and mobile, includes:

  • education tools
  • quizzes 
  • experienced instructors
  • a league system that allows you to compete against others to win real money

You can open up an account with $100,000 in virtual money here

thinkorswim (aka paperMoney)

Rated as the #1 desktop program, thinkorswim helps you test and develop your strategies as you execute trades, both simple and complex.  

With the program, you can experience “fully customizable trading experience, designed to help you nail even the most complex strategies and techniques.”

You can sign up for this options trading simulator here

ETNA Trading Simulator

A trading simulator used by many U.S. universities, educators and brokers, Paper Trading Platform offers “life-like execution for ETF, equities and options without any risk”.

Standard features like charts, news, and watchlists are a part of the program. Advanced features include:

  • options chains
  • multi-leg combo orders
  • real-time trading with Level II quotes

Learn more about this options trading simulator here

The Bottom Line: Options Trading Simulators

Trading options takes knowledge and patience — two skills that can best be acquired in action.

But don’t try to learn it as you go with real money on the line. Instead, use these options trading simulators to help you put your strategy into play.

That way, when real money is on the line, you’ll make a wise and profitable decision.