Apply for option trading within this account
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. You'll need sufficient cash or margin buying power in your account before placing an order.
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 Log In Required 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. Margin trading entails greater risk, including, but not limited to, risk of loss and incurrence of margin interest debt, and is not suitable for all investors.
Please assess your financial circumstances and risk tolerance before trading on margin. 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. 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.
Skip to Main Content. Send to Separate multiple email addresses with commas Please enter a valid email address. Your email address Please enter a valid email address. How to Add Options Trading to Your Account There's a lot to learn when it comes to trading options, but we have the tools to help give you the confidence to put together a strategy. What do I need to know? The options application asks for a snapshot of your current financial situation so be ready to provide your: What to expect We'll let you know which option level you're approved to trade—either by email in 1 to 2 days or by U.
In fact, having a brokerage account is nearly the same as having a savings account, but with the added benefit of having the ability to invest the money at your discretion. To learn more about the similarities and differences between brokerage accounts and savings accounts, check out this infographic. We get a lot of questions about opening a brokerage account, which is why we wanted to provide an FAQ resource for all of your burning brokerage account questions.
Having a self-directed brokerage account will allow you to make your own investment decisions. It differs from having an account with a typical bank because they are in different industries and therefore have different regulations for each. Opening a brokerage account will allow you to put your money in an account that has access to stock and option markets.
Because savings accounts yield very small returns the current average return is. If you do not have trading experience under your belt, trading options in a brokerage account can be a little tricky.
One of the requirements of getting permission to trade options is to have some sort of experience trading them a bit of a catch if you ask us. Keep in mind, by no means does this guarantee that you will receive options permission, but it does help. To learn more about the doughjo, check out this blog post. When you are filling out the brokerage information you want to make sure you apply for margin trading tier 2 and as many privileges as possible. As we discussed before, many people open brokerage accounts to open themselves up to different ways of investing, and potentially making a nice return in their account.
The terms listed on the application range from protection to speculation. Protection is the most conservative term which means using strategies that protect the capital in the account. Speculation is the most aggressive term which means using strategies, such as naked options, to grow the account rapidly.
Depending on your risk tolerance and goals, you may select anything that interests you. Selecting the more aggressive terms may help you obtain higher option trading approval since those permissions are required to trade speculatively.
Transferring money into the account funding the account will take a few days from the initial transfer. Funds may be used immediately for trading stocks if you are granted margin, but option trades will only go through once the funding check or transfer fully clears.