options trading platforms

 


If you’re new to option trading or looking to make a switch to a new platform, there are many to choose from. Each broker has its own unique set of features, so make sure the one you’re considering supports options before you get started. Your specific needs might be different from someone else’s, so here are some things to consider when selecting options trading platform.

First, make sure you sign up with a reputable bank; this will be the same for all investors. Do not sign up for Joe Bob’s Trusty Investments or another bank that is not well known. They may charge you less per trade, but trades are cheap anyway. stock patterns Saving a dollar per trade in exchange for putting all your money at risk with an unknown bank is a bad idea. Many quality well-known banks charging zero transaction fees and $.65 per option contract. There are more affordable options brokers out there, but these smaller discount brokerage companies have been plagued with system crashes and other bugs. As cheap as transaction fees are today, it’s just not worth it to try to save yourself $100 a year and expose yourself to these other risk factors, so go with quality.

A responsive support team can be an asset to most. option premium When you call your do you go through an automated system for ten minutes before you get to a real person? When you finally get someone, how well do they assist you?

Does the investment bank support what you want to do? Options trading is more risky, so make sure they allow it and will allow you to trade options. There are five levels of option trading, which are the following:

Level 1: Covered call writing of stock options.

Level 2: Everything that is in level 1, plus purchases of calls and puts, selling of cash covered puts, and buying of straddles or other combinations.

 


Level 3: Everything that is in levels 1 and 2, plus spreads, covered put selling (writing puts against stock trades that has been shorted), and reverse conversions of stock options.

Level 4: Everything that is in levels 1, 2, and 3, plus uncovered selling of stock options, uncovered selling of straddles or combinations on stocks, and convertible hedging.

Level 5: Everything that is in the previous levels, plus uncovered selling of uncovered writing of straddles or combinations on indexes, index options, covered index options, and collars and conversions of index options.

Make sure you can get approved for your desired level. short call option For most beginners, level 2 should be adequate, but ultimately level 3 is where you want to be. No matter your skill level, make sure you do not do anything uncovered until you feel very conformable with options trading.

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