If you have an account, you can apply online Log In Required. Please be ready to provide the following:. We'll let you know which options level you're approved to trade—either by email in 1 to 2 days or by US Mail generally within 3 to 5 days—based on your delivery preferences.
Or call us after 48 hours at , and we can provide you with your approval information. You can also check the status of your application online. An option's contract price is determined by several factors including the price of the underlying, strike price of the contract, the underlying asset's volatility, time until expiration, any dividends that are payable during the life of the contract, and the risk-free interest rate. There are several factors to consider when picking a strike price: Moneyness, time, and liquidity.
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For moneyness, in-the-money options are relatively more expensive than out-of-the-money options. For time, holding all else unchanged, a contract with a longer life implies a greater probability that the option will be in the money before expiration. However, it will also cost more than a similar option with less time until expiration. For liquidity, consider almost always looking for options that meet your objectives with small bid-ask spreads if you want to consider reducing your trading costs.
Visit our Learning Center to increase your options knowledge with guided education, including on-demand webinars, for every experience level. Chat with an investment professional.
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Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please read Characteristics and Risks of Standardized Options. Supporting documentation for any claims, if applicable, will be furnished upon request. There are additional costs associated with option strategies that call for multiple purchases and sales of options, such as spreads, straddles, and collars, as compared with a single option trade. See all account types. As with any search engine, we ask that you not input personal or account information.
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How to start trading options As you consider trading options, use the resources here to help you understand the application process and review answers to frequently asked questions to get started. Things to know before you apply Apply online If you have an account, you can apply online Log In Required. Please be ready to provide the following: Yearly income Trading experience Net worth and liquid net worth.
Using a Market or Limit buy will more often times start you off with an option that has already lost money. Enter the stock symbol or company name for the stock you wish to purchase in the top of page search field. Directly under company stock symbol and company name tap on Option Chain.
Key takeaways
The page will refresh to the Option Chain page for the specific company. Navigate to the recommended Strike Price. The Strike Price is in the middle column. If the recommendation is a Put tap to the right of the recommended Strike Price to select it.
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Note: Light blue means the strike is in the money and white is out of the money. If the recommended strike price is in the money or light blue color, it means that the stock option may no longer be a good buy and consider waiting until the next option recommendation.
On the top of the page validate that the stock symbol, expiration date, strike price and option type is correct. Tap on Buy to Open. Buy to open just means that you are opening a new trade and for new traders, this is the option you will always select when buying an option. In the middle of the page, validate that the stock symbol, expiration date, strike price and option type is correct.
If you need to make corrections immediately below the Strategy Field, tap on Leg 1. It will expand to show editable fields for strike price, expiration date, etc. Near the bottom of the page, navigate to the Order Type field, and tap on Market Order.