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.

E*Trade: Broker Review for Stock Options.
Here's a review of E*Trade as a broker for investors who use stock options in their portfolios.
Stock options can be used in a number of ways. They can reduce the risk in your portfolio, or substantially increase the risk for higher returns. But one thing is concrete: Options add some complexity when it comes to selecting the best brokerage for your portfolio. In the article below, we'll review what E*Trade (NASDAQ:ETFC) has to offer the individual investor with a focus on fees and features that are important to options traders.
Standard trading commissions.
E*Trade uses a base-plus commission schedule that is common in the discount brokerage industry. Commission prices vary by the size of the trade, as it charges a flat fee per trade, plus a variable price per options contract.
Stocks and ETFs.
$6.95 per trade plus $0.75 per contract.
Source: Company website.
These prices are the broker's base published prices. In this case, E*Trade offers active traders a lower commission schedule ($4.95 plus $0.50 per contract) when they complete more than 30 trades per quarter. Many brokers have special offers for opening a new account, which can also reduce the average cost of making a trade.
Multi-leg options and exercise and assignment fees.
Stock options trades can get complicated quickly, as many strategies employ multiple contracts, with varying strike prices, and expiration dates in a single trade. Investors who deal in multi-leg options trading and exercise or take assignment for options positions should be thorough when shopping for a brokerage.
Type of transaction.
Fees and commissions.
Buy to close fee for low-cost options.
Source: Company website, Barron's .
E*Trade doesn't offer a free or low-cost way to buy-to-cover low-priced options, which may turn off some investors who use short options strategies or trade in low-priced options contracts. Buying to cover low-cost options can be part of a prudent risk management strategy. While it may be reasonable to accept virtually unlimited losses by selling calls for a $2 premium, it may not be reasonable to continue holding the trade if the options decline to $0.05 each. Thus, many people close low-priced short options trades early by buying to close, and many brokers incentivize this risk management decision by reducing commissions for such trades. E*Trade is not one of those brokers.
A multi-leg options trade might involve simultaneously selling puts and buying calls. Image source: Getty Images.
Options research tools.
Although discount brokers are known for providing low-cost trades in exchange for no-frills service offerings, many, including E*Trade, make research and trading tools available to their clients for free.
E*Trade offers a proprietary options screener and strategy optimizer to help investors visualize potential profit and loss on simple and complex trades. Its probability calculator can also help investors determine the risk-reward trade-off with each options trade, including multi-leg options trades.
Minimum deposit requirements for options trading.
E*Trade has a cash account minimum of $500 for opening a new account. Some options strategies that expose the investor to larger risks (writing naked puts or calls, for example) require larger account balances, but the requirements for more sophisticated trades varies by the size and risk of each options trade.
E*Trade as an options broker.
Every broker has a pricing schedule and feature list designed to court a specific type of investor. E*Trade may appeal to some investors with its relatively low minimum account requirements, single base-rate charges for multi-leg trades, and lower commissions for more-active traders. Investors who tend to trade more low-priced options or transact in short options trades may prefer a broker that allows clients to close low-priced short options trades for free.
To be clear, The Motley Fool does not endorse any particular brokerage, but we can help you find one that is a good fit for you. Check out the Fool Broker Center to compare several brokers on one page and to see if you qualify for extra perks just for opening an account.
Jordan Wathen has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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Etrade options requirements

Suggested Keywords: Account types, DRIPs, Routing number, IP, Penny stocks.
Suggested Keywords: Account types, DRIPs, Routing number, IP, Penny stocks.
Borrow up to 50% of your eligible equity to buy additional securities. Powerful tools, real-time information, and specialized service help you make the most of your margin trading.
How margin trading works.
Borrow to buy stock.
Purchase more shares than you could with just the available cash in your account, based on your eligible collateral.
The potential reward.
If the stock price goes up, your earnings are amplified because you hold more shares.
Weighing the risk.
If the stock price moves against you, you could lose more than your initial investmentВ.
Paying interest.
As with any loan, you pay interest on the amount you borrowed.
Options.
contracts 2.
contracts 3.
Special offer! Get up to 500 commission-free stock and options trades,
The E*TRADE margin advantageВ.
Spot and seize potential opportunities with powerful tools, specialized support, and competitive margin rates.
Advanced margin tools and real-time updates let you manage your trading with precision Have questions? Get answers fast from dedicated specialists who know margin trading inside and out. Keep trading costs low with competitive margin interest rates. В.
Powerful tools and insights.
We give you the tools and resources to make fully informed decisions about using margin.
Margin Analyzer Tool:В All-in-one dashboard to monitor margin requirements for different positions Margin Calculator Tool:В Create what-if scenarios to explore the potential outcomes of different transactions Requirements search: В Different trades have different margin requirements. Look them up with just a few clicks.
More leverage with portfolio margin.
Sophisticated traders can increase their buying power and lower their margin requirements with portfolio margin.
Margin requirements are based on the overall risk of your entire portfolio, not just individual positions Enjoy dedicated support from experienced margin and derivatives specialists who share your passion for trading Available to experienced traders with Level 4 options approval and $100,000 or more in account equity Download applications.
В В В or callВ 800-998-8079В to speak to a representative.
Education on demand.
There are lots of ways to use margin in your trading, including advanced options strategies. Start exploring now. 4.
The Basics of Margin Trading.
You’ve probably heard some great stories on both sides of the double-edged sword that is margin.
Margin Trading Considerations.
Margin is a finance term for borrowed money, so “buying on margin” is the practice of purchasing.
Margin Account Special Policies.
Margin is generally used to leverage your cash and investments in order to increase your.
Service 
Quick Links 
Connect with us.
Check the background of E*TRADE Securities LLC onВ FINRA's BrokerCheck.
PLEASE READ THE IMPORTANT DISCLOSURES BELOW.
Commissions for equity and options trades are $6.95 with a $0.75 fee per options contract. To qualify for $4.95 commissions for equity and options trades and a $0.50 fee per options contract, you must execute at least 30 equity or options trades per quarter. To continue receiving $4.95 equity and options trades and a $0.50 fee per options contract, you must execute at least 30 equity or options trades by the end of the following quarter. Regulatory and exchange fees may apply.
Stock plan account transactions are subject to a separate commission schedule.
Securities products and services offered by E*TRADE Securities LLC, MemberВ FINRA / SIPC . Investment advisory services are offered through E*TRADE Capital Management, LLC, a Registered Investment Advisor. В Commodity futures and options on futures products and services offered by E*TRADE Futures LLC, Member NFA . Banking products and services are offered by E*TRADE Bank, a federal savings bank, В Member FDIC , or its subsidiaries. E*TRADE Securities LLC, E*TRADE Capital Management LLC, E*TRADE Futures LLC, and E*TRADE Bank are separate but affiliated companies.
System response and account access times may vary due to a variety of factors, including trading volumes, market conditions, system performance, and other factors.
В©2017 E*TRADE Financial Corporation. All rights reserved. В E*TRADE Copyright Policy.

Options.
Powerful tools, great service, and excellent value.
Among the lowest options fees in the market Best-in-class platform for trading options on equities, indexes, and futures Support from knowledgeable options specialists Dime buyback program for buy to close option transactions.
50Вў equity and index options.
per contract when you place 30+ stock or options trades per quarter 2.
$1.50 futures options.
Get up to $600В plus 60 days of commission-free stocks and options trades for deposits of $10k or more. 1 В How it works.
Get up to $600В plus 60 days of commission-free stocks and options trades for deposits of $10k or more. 1 В How it works.
Best-in-class OptionsHouse trading platform.
It’s in the name for good reason—a best-in-class platform for option trading on equities, indexes and futures, built by those who have won both Barron’s “Best for Option Traders” and StockBrokers’s “Best in Class” awards for Option Trading seven years in a row. 4.
Dime buyback program.
You will pay no per contract or base commission charge when you buy to close an equity option for 10 cents or less.  This allows you to close short options positions that may have risk, but currently offer little or no reward potential—without paying any commissions. There’s no sign up required. This program automatically applies anytime you buy to close an equity option for 10 cents or less.
Dedicated support for options traders.
Have platform questions? Want to discuss complex trading strategies? Our dedicated trader service team includes many former floor traders and futures licensed specialists who share your passion for option trading.
Discover options on futures.
Same option strategies, more hours and markets to trade. Option on futures offer nearly 24-hour access and diversification. В Trade options on oil, gold and corn as easily as you do on the S&P 500 Index.
Preferred 30+ Trades / QTR.
Standard <30 Trades / QTR.
plus $6.95 base В.
Education on demand.
Options trading doesn’t have to be difficult, especially if you have the right education to take your trading to the next level. 5.
Getting Started with Options.
There are so many available options and ways to trade them that you might not know where to.
Options Fundamentals: Introduction.
Review the fundamentals of options before you start trading. This seven part series will help.
Options Fundamentals: Options Pricing.
Review the fundamentals of options before you start trading. This seven part series will help.
Service 
Quick Links 
Connect with us.
Check the background of E*TRADE Securities LLC onВ FINRA's BrokerCheck.
PLEASE READ THE IMPORTANT DISCLOSURES BELOW.
Commissions for equity and options trades are $6.95 with a $0.75 fee per options contract. To qualify for $4.95 commissions for equity and options trades and a $0.50 fee per options contract, you must execute at least 30 equity or options trades per quarter. To continue receiving $4.95 equity and options trades and a $0.50 fee per options contract, you must execute at least 30 equity or options trades by the end of the following quarter. Regulatory and exchange fees may apply.
Stock plan account transactions are subject to a separate commission schedule.
Securities products and services offered by E*TRADE Securities LLC, MemberВ FINRA / SIPC.
System response and account access times may vary due to a variety of factors, including trading volumes, market conditions, system performance, and other factors.
В©2017 E*TRADE Financial Corporation. All rights reserved. В E*TRADE Copyright Policy.