ETrade is one of the leading online brokers for trading options and stocks.
Investing in the stock market carries a lot of risks and as such it can be quite intimidating especially to those who have limited understanding of how it works. However, if done right, it can also bring you great rewards.
This guide discusses how to open an ETrade account for trading options, the associated costs and fees, and why you should choose ETrade for options trading.
Before you start to trade, there are a few things that you need to know. First off, if you want an Etrade account for trading Put options, you'll need to have an approved margin account. Secondly, investors are provided with two choices. They can either choose to buy and sell options or they can choose to write naked or covered options. If you choose to write naked options, then you will need further approval since it involves more risk.
ETrade fees are $9.99 for stock trades and an additional $45 commission for trades that are broker-assisted.
Trade Options With ETrade
Our ETrade Options Buying & Selling Guide is quick and easy. Users on mobile can follow the steps outlined below:
- Locate the “Trading Tab” on the screen and tap it. Among the new choices you will see the “Trade Option”. Go ahead and tap it.
- Put in the stock symbol of the company you want to purchase options on and tap on the “Get Quote” button. This will open up an option chain for you.
- Choose the expiration month you want to trade and tap the highlighted symbol which corresponds to the strike price at which you want to trade. You will find the ‘Call’ option on the top of the page. The ‘Put’ option can be found at the bottom of the page.
- The ticker symbol, strike, type of option, and expiry has already been entered for you. So, your next step is to enter the number of contracts that you want to buy. Once you’ve entered that number, tap on “Preview order”.
- Thoroughly go through the page of the preview order. If everything is fine then go ahead and tap “Submit Trade”.
If you're using a laptop or home computer you can watch this ETrade options trading video demo:
Why Choose ETrade
Apart from being really easy to use, ETrade provides its investors with a number of tools that make buying and selling trade options easy. Our complete review shows you why you should choose ETrade as your online broker.
With risk parameters, multiple chain types, and easy-to-use formats, the options chains do almost all of the work for you.
With the options screener, you can scan the whole market and identify strategic options that match your risk tolerance, goals, and time horizon.
You can use the strategy optimizer to analyze all of the potential strategies in order to find out one which suits you the most.
Based on the volatility and the time frame you choose, you can know the probability regarding the closing of the stock.
Why Choose E*Trade?
ETrade is the preferable choice for investors that choose to trade options, and it is not difficult to understand why.
With numerous tools that help investors such as the option screener, probability calculator, and the strategy optimizer, buying and selling options has never been easier. All that is required is an approved margin account, and then you can begin buying and selling options.