How to Add Options Trading to Your Account

This gives you the potential for a higher-percentage return than if you were to buy the stock outright. If you do not have a Margin Agreement, you must either add margin or use cash. After you make an options trade, it and its status will appear immediately on your Order Status screen. However, with possibility also comes higher risk. An Options Agreement is part of the Options Application. Depending on your option level, you can buy or sell puts, buy writes, spreads, straddles, strangles, combinations, butterfly spreads, condors, and collars. Certain complex options strategies carry additional risk.

How to Add Options Trading to Your Account You can access Fidelity's Options Trading Agreement on the About Options Trading page in personalbank.cf's online Brokerage Handbook. Also, personalbank.cf offers comprehensive options educational material in the Learning Center.

We make it easy to get started

Open a Brokerage Account. For help setting up your options trading account, please call us. If you have an account, you can apply online Log In Required or call an investment professional at 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 U.

Mail in 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. Options trading strategies involve varying degrees of risk and complexity. Not all strategies are suitable for all investors. There are five levels of options trading approval, and the approval requirements are greater for each additional level since there's more risk for you and Fidelity.

Your financial situation, trading experience, and investment objectives are taken into consideration for approval. An Options Agreement is part of the Options Application. To trade options on margin, you need a Margin Agreement on file with Fidelity. After you log in to Fidelity, you can review the Margin and Options page to see if you have an agreement.

If you do not have a Margin Agreement, you must either add margin or use cash. Typically, multi-leg options are traded according to a particular multi-leg options trading strategy.

With a call option, the buyer has the right to buy shares of the underlying security at a specified price for a specified time period. With a put option, the buyer has the right to sell shares of the underlying security at a specified price for a specified period of time. Visit our Learning Center to learn more with our introduction to options video. 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. Skip to Main Content. Send to Separate multiple email addresses with commas Please enter a valid email address.

Below are the five levels of option trading, defined by the types of option trades you can place if you have an Option Agreement approved and on file with Fidelity.

Level 1 Covered call writing of equity options. Note that customers who are approved to trade option spreads in retirement accounts are considered approved for level 2. Level 3 Levels 1 and 2, plus spreads, covered put writing selling puts against stock that is held short and reverse conversions of equity options. Level 4 Levels 1, 2, and 3, plus uncovered naked writing of equity options, uncovered writing of straddles or combinations on equities, and convertible hedging.

Level 5 Levels 1, 2, 3, and 4, plus uncovered writing of index options, uncovered writing of straddles or combinations on indexes, covered index options, and collars and conversions of index options.

A new option application and a Spreads Agreement must be submitted at the same time and approved prior to placing any spread transaction.

You might buy an option instead of the underlying security in order to obtain leverage, since you can control a larger amount of shares of the underlying security with a smaller investment. This gives you the potential for a higher-percentage return than if you were to buy the stock outright. However, with possibility also comes higher risk. If you buy options instead of the underlying security, your options can expire worthless - but if you buy the stock, you still own the shares.

The owner of an option contract is not obligated to buy or sell the underlying security. However, the seller of an option, if assigned, is obligated to buy or sell the security at the strike price.

To trade on margin, you must have a Margin Agreement on file with Fidelity. If you do not have a Margin Agreement, you must use cash. An option chain is the list of all the options available for an underlying security. Typically, multi-leg options are traded according to a particular multi-leg option trading strategy.

When placing a multi-leg option trade, use the multi-leg option trading ticket because: You can enter and execute all of the legs of your trade at the same time, based on the pricing you requested. Though you could enter each individual leg on a separate ticket, you risk having one of your legs execute while another one doesn't, or having both execute but at prices you didn't expect.

With a call option, the buyer has the right to buy shares of the underlying security at a specific price for a specified time period. With a put option, the buyer has the right to sell shares of the underlying security at a specified price for a specified period of time.

To see your positions from the Trade Options page, select the Positions tab in the top right corner of the Trade Options page. There are also tabs to view Orders and Balances. During market hours, the figures displayed are displayed in real-time. The date-time stamp displays the date and time on which these figures were last updated. To refresh these figures, click Refresh. To see your balances from the Trade Options page, select the Balances tab in the top right corner of the Trade Options page.

This tab displays the same fields displayed on the Balances page. To see more balances, click "Show All" During market hours, balances are displayed in real-time. To refresh the balances, click "Refresh".

A list of commonly-viewed Balance fields also appears at the top of the page under the account drop down box. To see your orders from the Trade Options pages, select the Orders tab in the top right corner of the Trade Options page. The tab displays information for open, pending, filled, partial, and canceled orders. You may attempt to cancel or attempt to cancel and replace an order from the Orders tab on the Trade Options page.

The date-time stamp displays the date and time on which this information was last updated. To refresh order information, click Refresh. To direct an options order to a particular exchange, on the Options trade ticket, in the Route drop-down, select Directed.

Then select one of the following exchanges: Specific share trading is not available when placing a directed options order.

You place a price restriction on an option trade order by selecting one of the following order types:.

Placing Options Orders

How to Start Trading Options. With the ability to leverage and hedge, options can help limit risk while offering unlimited profit potential. If you don’t have a Fidelity account already, open and fund an account now. You can access Fidelity's Options Trading Agreement on the About Options Trading page in personalbank.cf's online Brokerage. Below are the five levels of option trading, defined by the types of option trades you can place if you have an Option Agreement approved and on file with Fidelity. The option trades allowed for each of the five option trading levels. Researching Options Options Basics. You can access Fidelity’s Options Trading Agreement on the About Options Trading page in personalbank.cf’s online Brokerage Handbook. Also, personalbank.cf offers comprehensive option educational material from the Chicago Board of Options Exchange (CBOE), the Options Institute (OIC), and .