Options brokers are NOT created equal. But believe it or not, this is actually good for you as an options trader because you can find a broker who really specializes in those services that you value most.

But the questions you will need to have answered are usually not found in the checklist comparisons that most brokers will give you. This may mean that you have to do some investigation on your own, but the legwork will be worth it.

Here are four tips to help you evaluate the brokerage of your choice.

Tip #1 – Research your broker for problems.

You can easily check out a broker and a brokerage by going to finra.org. This organization was formed from the consolidation of the NASD and the enforcement department of the New York Stock Exchange. You can investigate individuals as well as firms for disciplinary issues, violations and corporate history. Just remember, where there is smoke, there is fire, so do your homework!

In addition, if the broker you want to work with is also a futures broker, they will be registered with the NFA, and you can
check them out at nfa.futures.org. Keep in mind that this industry is remarkably transparent, and you deserve information!

Tip #2 – Call the brokers you are evaluating.

Question: When do you really need your broker?

Answer: You need them when you have a problem, and when that happens, service matters a lot more than just about anything else.

Try this handy experiment: Call the broker you are evaluating during options expiration Friday (the third Friday of the month) and ask a few questions. This is the time they will be the busiest. Also call them after market hours on another day, and call them right at the market open on another. If you are getting good answers and courteous responses during these difficult operational times, then you have a customer service winner.

A broker’s customer service department is a lot like fire insurance. You may never need it, but if you ever did, it had better be the best.

Tip #3 – Know what tools you’re getting.

Trading tools are great, but are they all going to be useful for you?

Brokers compete aggressively on the tools they offer, so here are a few questions you should ask yourself to know the difference between tools that have some usefulness and those that don’t.

The answers to each of the questions below should be “yes.”

1. Is it easy to get a chain sheet or chart for a particular stock without wading through several page loads or mysterious links and tabs?

2. Are the charts easy to use, and do they include functionality that you will actually use?

3. Does the broker offer a paper trading application/account for you to use in conjunction with your live account?

4. Do they provide education on how to use their tools? Is that education free?

5. Do you value the tools they offer, or are you only being told that the tools are valuable by the broker?

Tip #4 – Compare commissions.

Lower is better — enough said.

Brokers compete on trading costs, and this is a critical component. But make sure you balance your desire for low commissions with your absolute need for good service and tools.

Commission comparisons are widely available, and most brokers are pretty close when you look at total costs. These costs may include monthly fees, inactivity fees, broker fees, and minimum commission rates per trade. Get the full picture, not just the headline rates.

This article is brought to you by LearningMarkets.com.