Etrade options level 1

Options Trading at E*TRADE.
Smart Strategies for Every Market.
Options Strategies for Level 2 Customers.
Buying calls allows investors to realize the potential financial reward from an increase in price of the underlying security without risking as much capital as buying the security.
Buying puts allows an investor to profit from a downward price move in the underlying stock without selling the stock short.
Married Put.
An investor purchases a put while at the same time buying an equivalent number of shares of the underlying stock to protect shares from a decrease in market price.
Protective Put.
An investor who owns shares of an underlying stock purchases puts to protect the share value from a decrease in market price.
A strategy in which an investor writes a call option and purchases a put option with the same expiration while owning (or purchasing) an equivalent number of shares of the underlying stock. Employed to potentially profit from a modest advance in share price, with the premium received from the call used to help pay for the downside protection provided by the put.
Cash Secured Short Put.
Investors use cash secured puts to purchase underlying shares below current market price or to keep premium from the sale of puts that expire out-of-the-money.
The simultaneous purchase of a long call and a long put on the same underlying security at the same expiration and strike price. This strategy is used when an investor expects large price swings, but is unsure of direction.
To Upside: Unlimited.
To Downside: Substantial.
A lower cost alternative to a straddle where the investor purchases a long call and a long put on the same underlying security with the same expiration but where the put strike price is lower than the call strike price.
To Upside: Unlimited.
To Downside: Substantial.
Options Fundamentals: Buying Calls & Puts.
Options Industry Council 1.
Before you start trading calls & puts, review the basic concepts of these essential strategies. Play Video В»
Call our dedicated Options Service Team at 1-866-222-6124.
Important Note: Options transactions are complex and carry a high degree of risk. They are intended for sophisticated investors and are not suitable for everyone. For more information, please read the Characteristics and Risk of Standardized Options brochure before you begin trading. Also, there are specific risks associated with covered call writing including the risk that the underlying stock could be sold at the exercise price when the current market value is greater than the exercise price the call writer will receive. A covered call writer foregoes participation in any increase in the stock price above the call exercise price and continues to bear the downside risk of stock ownership if the stock price decreases more than the premium received. Moreover, there are specific risks associated with buying options including the risk of the purchased options expiring worthless. Also, there are specific risks associated with selling cash secured puts including the risk that the underlying stock could be purchased at the exercise price when the current market value is less than the exercise price the put seller will receive. There are specific risks associated with trading spreads including substantial commissions, because it involves at least twice the number of contracts as a long or short position and because spreads are almost invariably closed out prior to expiration. Multiple-leg options including collar strategies involve multiple commission charges. Because of the importance of tax considerations to all options transactions, the investor considering options should consult his/her tax adviser as to how taxes affect the outcome of each options strategy. Options investors may lose the entire amount of their investment in a relatively short period of time.
E*TRADE credits and offers may be subject to U. S. withholding taxes and reporting at retail value. Taxes related to these credits and offers are the customer’s responsibility.
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The material is being provided to you for educational purposes only. The content has been written by and will be presented by a third party not affiliated with E*TRADE Financial Corporation or any of its affiliates. E*TRADE Financial Corporation and its affiliates are not responsible for the content. Neither E*TRADE Financial Corporation nor any of its affiliates is affiliated with the third party providing this content.
No information presented constitutes a recommendation by E*TRADE Financial or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy.
The content provided by E*TRADE Securities is for educational purposes only. This information neither is, nor should be construed, as an offer, or a solicitation of an offer, to buy or sell securities by E*TRADE Securities or its affiliates.
The material is being provided to you for educational purposes only. The content has been written by and will be presented by a third party not affiliated with E*TRADE Financial Corporation or any of its affiliates. E*TRADE Financial Corporation and its affiliates are not responsible for the content. Neither E*TRADE Financial Corporation nor any of its affiliates is affiliated with the third party providing this content.
No information presented constitutes a recommendation by E*TRADE Financial or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy.
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Securities and futures products and services offered by E*TRADE Securities LLC, Member FINRA / SIPC/NFA . Investment advisory services are offered through E*TRADE Capital Management, LLC, a Registered Investment Adviser. Banking products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries. E*TRADE Securities LLC, E*TRADE Capital Management, LLC and E*TRADE Bank are separate but affiliated companies.
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Etrade options level 1

E*TRADE Securities LLC.
Jersey City, NJ 07303-0484.
E*TRADE Securities LLC.
Harborside Financial Center.
34 Exchange Place.
Jersey City, NJ 07311.
It generally takes about five business days from receipt of your request for us to review it. Once this has been done, we'll send you a Smart Alert message informing you of the outcome of our review. You'll also find out what options trading level you've been approved for.
View options trading levels The trading levels available at E*TRADE Securities – for customers who have applied and been approved for options trading – depend on the type of account.
The level of options trading for which your account will be approved, if any, will be decided based on the information you provide us in your Options Upgrade Request form.
Covered calls, including: Covered calls sold against stocks held long in your brokerage account Buy-writes (simultaneously buying a stock and writing a covered call) Covered call roll-ups/roll-downs.
To place a naked equity call or put trade (Levels 3 and 4) you must have margin equity of at least $2,000 in your margin account. At Levels 3 and 4, margin customers will be allowed to enter naked short put positions. These positions will be subject to the naked maintenance margin requirement rather than the cash-secured requirement.
View options trading levels in cash accounts We offer two different options trading levels for the following types of cash-approved brokerage accounts (unless noted in parentheses below): Individual accounts Joint accounts Investment club accounts Business/corporate accounts (provided the corporate charter allows for the requested level of options trading) Trust accounts (provided the trust agreement allows for the requested level of options trading) Custodial accounts (Level 1 and Level 2) Coverdell Education Savings Accounts (Level 1 only) Estate accounts (Level 1 only) Profit sharing and money purchase plans (Level 1 only) 401K accounts (Level 1 only) Non-custodial retirement plans (Level 1, only available if the plan agreement allows for options trading)
Covered calls, including: Covered calls sold against stocks held long in your brokerage account Buy-writes (simultaneously buying a stock and writing a covered call) Covered call roll-ups/roll-downs.
View options trading levels in IRAs We offer three different options trading levels in the following types of IRA accounts: Traditional IRA Roth IRA Rollover IRA SIMPLE IRA SEP-IRA.
Covered calls, including: Covered calls sold against stocks held long in your brokerage account Buy-writes (simultaneously buying a stock and writing a covered call) Covered call roll-ups/roll-downs.
View commissions for options transactions For information on options commissions – as well as all other commissions and fees – see our consolidated Commissions & Fees page.
Know which E*TRADE platforms support options trading Here are the gateways and trading platforms available at E*TRADE Securities through which basic and complex options trades can be placed.
(Spreads, straddles, combinations, buy-writes, butterflies, condors, and more) E*TRADE Securities web site E*TRADE Pro E*TRADE Mobile You can also place options trades by calling us at 1-800-ETRADE-1 (1-800-387-2331) and speaking with one of our brokers; a fee of $45 may be charged for broker-assisted trades.
Learn more about options trading Our Options Education section provides an overview of the basics of options trading, as well as a glossary and detailed descriptions of the various options strategies.
Understand Universal Spreads Definition: A Universal Spread is a spread meeting certain conditions as set forth in amendments made to FINRA Rule 4210 by Regulatory Notice 12-44. Specifically, these amendments allow for the pairing of option-only spreads where the risks offset each other and the total risk of the combined spread is less than the sum of the risks of each individual spread. This is a more flexible form of pairing that allows strategies with limited risk to be combined into a type of super-spread, resulting in a lower overall margin maintenance requirement.
Traditional Spread Example: A short 40-50 put spread and a short 60-70 call spread with the same expiration would fit the traditional definition of an "iron condor" strategy, and would thus have a traditional margin requirement of $1000. This is calculated as the most the position set can theoretically lose if held to expiration (the $10 spread width x the option multiplier of 100), since both sides of the spread cannot possibly be in-the-money at expiration. The stock cannot possibly be below $50 and above $60 at the same time. Universal Spread Example: Now consider the above example with spreads of different widths. A short 40-55 put spread and a short 60-70 call spread with the same expiration would have traditional margin requirements of $1500 and $1000 respectively. The total traditional requirement on this position set would be $2500 because there is no traditional strategy that allows these four options to be combined, yet the most this position set can theoretically lose if held to expiration is only $1500 (if the stock closes below $40). As a result of the updates to FINRA Rule 4210, these positions can now be combined into a Universal Spread with a margin maintenance requirement of only $1500. General Eligibility: To be eligible for Universal Spread treatment, a position set must have a defined maximum spread risk.
Since a Universal Spread is a method of combining long and short options into option spreads for margin requirement purposes, Universal Spreads can only be formed in accounts approved for Option Level 3 or Option Level 4. E*TRADE will calculate both (a) the margin requirement using traditional strategies, and (b) the Universal Spread requirement (if eligible) for a position set on a given underlying. Universal Spread will only be used if it results in an improved (lower) margin requirement. When calculating the margin requirement of a Universal Spread for a position set with multiple expirations, special considerations exist depending on when the long and short positions expire: Expiration Consideration #1: If no short option expires later than any long option, then all options will be considered together for calculation purposes and the requirement will be the same as if all options had the same expiration. For example, if a position set is long 1 Jan $40 Put, short 1 Jan $55 Put, short 1 Jan $60 Call, and long 1 Feb $70 Call, the margin requirement would be $1500 (same as if the Feb call expired in Jan). Expiration Consideration #2: If at least one short option expires later than any long option, then a Universal Spread margin requirement must be calculated within each expiration , and the sum of these will be the Universal Spread requirement. Important Note: This scenario also requires that no expiration is short calls or puts . Therefore if any short option expires later than a long option and at least one expiration is net short calls or puts, then Universal Spread cannot be used and the traditional strategy-based margin requirement must be used instead. At this time, Universal Spreads are "all-or-none" and a subset of positions cannot be selected for Universal Spread treatment. For example, if a position set has a long call at each of 10 different strikes and a short call at each of 11 different strikes (with the same quantity at each strike, thus net short overall), traditional strategy-based margin pairing must be used. A Universal Spread cannot be created using the ten long call positions plus ten of the short call positions, leaving the eleventh short position out of the Universal Spread. This also means that an entire position set can become ineligible for Universal Spread if certain trades are made. For example, an account could have a large Universal Spread consisting of many offsetting positions, and selling even one additional option contract could make it ineligible for Universal Spread. This would force the position set back to being paired using traditional strategies, which could have a much higher margin requirement and could result in a much larger increase than just the requirement on the trade that eliminated the Universal Spread (see example in next bullet). Continuing the preceding examples, if a position set has a short 40-55 put spread and a short 60-70 call spread with the same expiration, the Universal Spread requirement will be $1500 (instead of the traditional requirement of $2500). However if one more option is sold, the position set would become ineligible for Universal Spread. The pre-existing put spread and call spread would revert back to their traditional margin requirements of $2500 total, resulting in a $1000 increase in margin requirements in addition to the requirement for the new option that was sold. Universal Spread positions can currently be displayed only on an all-or-none basis  – i. e. if Universal Spread pairing is used, all options on that underlying security will be displayed as a Universal Spread in the Margin Analyzer (even if extra long positions not used in the Universal Spread requirement calculation are present). Additional requirements may be added to Universal Spreads containing cash-settled European options with less than five days to expiration, and also in cases where the Universal Spread is valued at a credit that exceeds the Universal Spread requirement.
Remove options trading from my account You can remove options trading from your account by phone or mail. Call us at 1-800-ETRADE-1 (1-800-387-2331) and speak with a Financial Services Representative. Write us a letter and provide the following information: Your account number Your current options trading level (e. g. options trading) The trading level you want to change to (e. g. cash account)
E*TRADE Securities LLC.
Jersey City, NJ 07303-0484.
E*TRADE Securities LLC.
Harborside Financial Center.
34 Exchange Place.
Jersey City, NJ 07311.
1-800-ETRADE-1 About five business days after we receive your request, we'll send you a Smart Alert message letting you know that options trading has been removed from your account.
Before you can remove options trading from your account, you must first close out all options positions.
System response and account access times may vary due to a variety of factors, including trading volumes,
market conditions, system performance, and other factors.

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How do you trade put options on E*TRADE?
To trade put options with E-trade it is necessary to have an approved margin account. Investors may sign up for margin accounts with E-trade at us. etrade. Investors are faced with deciding whether they prefer to buy and sell options and whether they want to write options, either covered or naked. Writing naked options involves additional approval because it entails a significant amount of risk. Options are a type of derivative. Calls bet that stocks are going to increase in price. Puts bet on decreases in price. An option is the right, but not the obligation, to buy or sell a set amount of stock for a predetermined amount of time at a predetermined price.
Once investors have an approved margin account they may then log in to their accounts at us. etrade. To buy options, investors are required to research which company or index, strike price and expiration month they are interested in buying. Once they have this information they may enter an order to buy on the E-trade website. Options can change in value quickly. Investors are free to sell any options they have purchased at any time before they expire. Holding options for long periods of time is risky because options lose value through time value decay.
Customers interested in writing options as an income strategy must either have the corresponding quantity of the underlying stocks in their account or be permitted to perform naked option writing. Option writers need to research which months and strike prices are available for the options they want to write. Nearby strike prices and months may offer better values than others. Covered call option writers may have their stocks called away from them. Naked option writers may be faced with buying stock or entering a short position in the open market in order to meet the obligations of their naked positions being exercised. E-trade contacts the writers of naked option positions quickly at the telephone number or address provided if options that they have written are exercised. E-trade may close positions that do not fulfill margin requirements quickly.