How do you trade options on scottrade

We have implemented a Skip to Main Content link and improved the heading structure of our site to aid in navigation with a screen reader. For the best experience, please update your browser with the latest version. Scottrade Investment Management, Inc. Past performance does not guarantee future results. Buying a put gives you the right to sell the underlying instrument at the strike price before the expiration date. Should the price move in the opposite direction, you can do nothing and let the option expire worthless, or you may sell it to prior to expiration to recover part of your purchase price. Scottrade does not guarantee accuracy or completeness of the information and makes no assurances with respect to results to be obtained from their use. None of the information provided should be considered a recommendation or solicitation to invest in, or liquidate, a particular security or type of security or account.

Keep in mind, profit will be reduced or loss of money worsened, as applicable, by the deduction of commissions and fees. Although the sources of the research tools provided on this website are believed to be reliable, Scottrade makes no warranty with respect to the contents, accuracy, completeness, timeliness, suitability or reliability of the information. The value of your investment may fluctuate over time, and you may profit or lose money. Information on this website is for informational use only and should not be considered investment advice or recommendation to invest. Again, subtract the cost of the option from any profit you make. Thank you for visiting Scottrade.

Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss of money, in a down market. As the option buyer, you control the ability to exercise the contract. OPTIONS or by visiting www. The Options Clearing Corporation, or by requesting a copy by contacting Scottrade. Market volatility, volume, and system availability may impact account access and trade execution. TD Ameritrade are affiliated through their parent companies. When you buy a call, you have the right to purchase the underlying instrument at the strike price before the expiration date.

Investors should monitor these holdings, consistent with their strategies, as frequently as daily. It contains information on our lending policies, interest charges, and the risks associated with margin accounts. TD Ameritrade Holding Corporation. The material provided is for informational purposes only. Market volatility, volume and system availability may impact account access and trade execution. Consult with your tax advisor for information on how taxes may affect the outcome of these strategies.

However, the stock might not always move in the way that you expect. The research, tools and information provided will not include every security available to the public. The prospectus should be read carefully before investing. Such consent is effective at all times when using this site. Brokerage products and services offered by Scottrade, Inc. Investors should consider the investment objectives, risks, charges and expenses of a mutual fund before investing.

Leveraged and inverse ETFs may not be suitable for all investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies. Examples exclude transaction costs and tax considerations. All investing involves risk. All option accounts require prior approval by Scottrade. Supporting documentation for any claims will be supplied upon request. Browser Upgrade Recommended: Your version of Internet Explorer is no longer supported and may not display all the features of our website. Applicable transaction fees still apply.

Scottrade does not provide tax advice. Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. We are consistently making improvements to the accessibility of our site. Please consult your tax or legal advisor for questions concerning your personal tax or financial situation. Scottrade does not charge setup, inactivity or annual maintenance fees. The performance data quoted represents past performance. Bullish investors tend to purchase calls, while bearish investors tend to buy puts. There are special risks associated with uncovered option writing that may expose investors to significant losses.

No information presented constitutes a recommendation by Scottrade or its affiliates to purchase any product or instrument discussed therein or engage in any specific method. Please research any product or service carefully before purchase. Scottrade does not guarantee accuracy, completeness or timeliness of the information, is not responsible for statements, offers or products issued and makes no assurances with respect to the results to be obtained from their use. Clients approved for uncovered put writing must acknowledge having received and read the Special Statement for Uncovered Options Writers concerning the risks of this type of trading. Scottrade and the Option Industry Council are not affiliated. Enhance your ability to react to changing market conditions with a variety of option strategies available at Scottrade. If the underlying stays above the strike price you can lose the entire premium upon expiration. Therefore, this type of method may not be suitable for all customers approved for options transactions. Option trading magnifies risk and can therefore magnify profits and losses.

Hover over Trade at the top, and then click Options Order under the Trade Options heading. Options only trade during regular market hours. The Options Order Entry page is where you begin the option order process. This section will help you learn about options trading hours, how to place orders, how to check or modify orders and what commissions and fees are associated with options trading. There are certain commissions associated with buying and selling options through Scottrade, as well as a fee for exercising the option. You can view the status of your option order in multiple places.

To modify an order, click the Modify link next to the order you want to modify on the Order Status page. Trading options can also be more complicated than trading a traditional investment, like a stock, where you simply give an order to buy or sell. SEC regulates the options selection process. Option bid and ask prices are quoted in minimum increments, and these increments differ depending on price and sometimes on the underlying security. With options, there are more choices. Options symbols contain a series of letters with different meanings. If you sell a call and the option is exercised, you must sell the underlying at the strike price to the option holder. Option writers generally anticipate the stock will move in the opposite direction from option buyers or remain stable.

If you sell a put and the option is exercised, you must purchase the underlying at the strike price. If you write, or sell, options, you have no control over what the buyer of that option decides to do. When the contract expires, you make a profit because you keep the premium, or the amount the buyer paid to purchase. Option Order Entry page, click Review Order to check your order. All or None means that unless all the shares in your order can be filled in its entirety at the same time, it will not be filled at all. This means that if you type 1 in the Contracts field, your contract will be on 100 shares of the underlying security. Sell field, choose whether you want to Buy to Open, Buy to Close, Sell to Open or Sell to Close. This action would be used to close out a covered call position. Use the Find Symbol link below the Symbol Field to look up the trading symbol of the company you want to trade.

The Options Clearing Corporation, or by requesting a copy from your local branch office. Trade button on the option chain will allow you to not difficult send any contract you select to the order entry screen. Available strike prices will vary depending on expiration series. Put fields are populated by default once an underlying symbol is entered. Keep in mind profit will be reduced or loss of money worsened, as applicable, by the deduction of commissions and fees. Use the Options Chain link to view all available option contracts and associated quotes for that trading symbol.

Buy to Open is used to buy a contract to establish a new position. In the Quantity field, type the number of contracts you want to purchase. Choose your order duration. Sell to Close is used to sell an existing position to exit that contract. Keep in mind that option contracts have a standard multiplier of 100. Sell to Open is used to sell a contract to establish a new position. Covered Call is an example of a time when you would sell to open an option contract.

To find the Option Order Entry page, hover over Trade at the top of your account and then click Options Order under the Trade Options heading. Selections within these fields are not available until an underlying stock symbol is added. Use these to choose the strike price and type of option contract. Next, choose your Order Type. Type the symbol of the underlying security in the Symbol field. The covered call option method may help generate income and offer limited downside protection, but does not provide full downside protection and may limit profit potential. Buy to Close is used to close an existing short position to exit that contract. For example, all GTC orders placed during January will be automatically canceled at the end of February.

The Expiration field allows for the selection of available contract expirations dates. Limit, you will be able to enter both a stop price and a limit price. An optional All or None Qualifier can be added to the order. The only way to avoid exercise is by closing out the position before the option expires or the holder chooses to exercise. Scottrade also uses this amount. As a holder of an American style option, you can choose to exercise your option at any point up until the expiration date. But they go into a lot more detail than that. Aligned with customer service Scottrade have a network of over 500 local branches which you can call into.

But once again there are better alternatives; TradeKing both have superior training for rookies and offer a more comprehensive trading community. Dividend reinvestment plans or DRIPs are an excellent cost effective way to increase your holdings in a company. Scottrade are renowned for their customer service, they offer a number of ways to contact them and the customer service reps are both knowledgeable and friendly. But you can at least interact with other users and build friendships along the way. There are programs aimed at beginners which show how to develop a method and implement proper money management. So I created this site to help guide you through the minefield of selecting the perfect broker. For more experienced traders they offer the ScottradeELITE platform.

The only possible reason to not provide this service is so they can profit from the extra trades as a result. That kind of thing. But for a large broker their service is pretty good. So how do you go about choosing the right broker? Choosing the right broker is fundamental to your success as a trader. Scottrade has two primary trading platforms, the first is browser based and offers only basic functionality, this platform is really only suitable for beginners. So if we compare Stock, ETF and Option fees with other high street brokers like TD Ameritrade and Charles Schwab who also have a significant high street presence, Scottrade works out cheaper. For beginners Scottrade provide some excellent training and their web platform is not difficult to use if a little light on tools.

The ability to reinvest dividends in your IRA is crucial if you want to build a retirement nest egg. There are no account maintenance, inactivity or account transfer fees however. This is followed by some great intermediate options training which I think most traders will find useful. So if access to a local branch is important to you, Scottrade is the way to go. VIP service like TD Ameritrade Apex for instance. So having a network of local branches gives you the satisfaction of knowing you can get at your money at any time. TradeKing, this is unusual for a mainstream broker who seem to view such things as gimmicks.

This really is unacceptable, especially since TD Ameritrade offers a much more comprehensive platform without requiring any minimum balance at all. They have a good reputation and the largest number of local offices. Trip advisor stock and now am closing it to make some nice profit in a short amount of time. This Video has Boosted Audio after Some people said they could not hear me speak! Design to make money if the company drop in value. We make money by following the money. How to buy a put option of a company. If you want to know where Big Institutions are putting their money into stocks then check out my blog.

Pendola has a Bachelor of Arts in urban studies from San Francisco State University. As you save for retirement or some other purpose, you can use call options in your Roth IRA. Do I Need a Margin Account to Buy Options? When you open a Roth IRA account with a brokerage that provides options trading, you have to request options trading privileges. Before you open an account, ask the financial institution not only if it permits options trading, but if it allows the practice in IRA accounts. Can You Sell Call Options You Purchased? Brokerages do not allow all customers to engage in options trading.

While systems vary from brokerage to brokerage, you generally must meet account value, net worth and investment experience benchmarks to receive approval to trade options. To go long on calls, most brokerages only require you to qualify for options approval level number one. Not all brokerages provide customers with the ability to trade options. The answer should be the same for both Roth and traditional IRAs. As a writer since 2002, Rocco Pendola has published numerous academic and popular articles in addition to working as a freelance grant writer and researcher. For the most part, subsequent approval levels do not apply to Roth IRA accounts, as these advanced levels require a margin account.

Generally, the initial levels allow you to execute the most basic options trades, while more advanced levels permit advanced options trading strategies. Furthermore, brokerages use a system of laddered options approval levels. Interactive Brokers, which gives Scottrade customers access to multileg option trading, enhanced analytics and risk management tools. Along with a partnership with Interactive Brokers, this made Scottrade a player in the options trading arena. Start here to maximize your rewards or minimize your interest rates. Given the philosophical similarities to TD Ameritrade, those pluses will likely remain and even grow stronger after the acquisition is completed.

September 2017, subject to regulatory approval. Scottrader with even more robust screeners and technical indicators for active traders. Dow Jones and, as the name implies, streaming quotes. NerdWallet, a personal finance website. Scottrade SmartText translates technical indicators on charts and screeners into plain English and provides context for investors. Scottrade Active Trader Group, is on call to answer questions and discuss strategies with clients. Customers who call during normal business hours are routed automatically to their local branch. Scottrade customers after the merger.

Recognia and independent research from Morningstar, Zacks, Learning Markets, New Constructs and more. The Scottrader Streaming Quotes desktop platform is a step up in from the website in functionality. NerdWallet is a free tool to find you the best credit cards, cd rates, savings, checking accounts, scholarships, healthcare and airlines. After that, the two brokerages will merge services and offices under the TD Ameritrade name. Scottrade in a deal set to close in September 2017. You pay that amount per transaction. The profits earned will be relatively small as compared to the initial investment. Base fee is fixed.

This is where Options come in. Every Option consists of 100 units of underlying instrument. Are you looking to hedge your 23 shares. The base price of the option is generally very small as compared to the value of the underlying instrument. Each option contract represents 100 shares with the exception of Mini Options that have listing on AAPL, GOOG, AMZN, SPY and GLD which represent 10 shares. So even buying 1 Contract will exceed the 23 shares you have in your account. How Options are traded? Why Options are traded? However, per contract fee varies on the number of contracts you want to buy. Each options contract nominally represents 100 shares of underlying stock.

Scottrade falls behind, but not by much. Furthermore, the quality of support can vary depending on the staff of your local branch office. One feature I really enjoyed, which is exclusive to Scottrade clients, was the Scottrade SmartText functionality. In 2017, Scottrade finished fifth for email support and seventh for live chat support. Calling the support phone number on the Scottrade website during market hours elicits a prompt for your zip code, then redirects you automatically to your local branch office. SEC filings, and more. Even today in 2017, the FRIP remains an exclusive Scottrade tool. TD Ameritrade, ETRADE, Fidelity, and Charles Schwab, all of which offer phone support any day, any time. When I opened a new account to conduct my Scottrade review, I knew Scottrade had tough competition, and I was curious to see how well the broker would perform.

Trades can be placed from any page or website by popping out the trade ticket bar in the footer. Launching Pad, an area of the site designated to creative experimentation and direct client feedback. Blain heads research at StockBrokers. Pickiness aside, Scottrade Streaming Quotes gets the job done and is an not difficult win for casual investors. The new website has a nice, clean design, removing the old left sidebar and putting the primary header navigation in focus. In 2016, Scottrade spent significant time cleaning up the overall design and launched three different color schemes: classic dark, light, and monochrome. Screens are created mostly in house, and it was refreshing to see more variety.

Scottrade was going to be my new best friend. For our 2017 Stock Broker Review we assessed, rated, and ranked sixteen different online brokers over a period of six months. In total, 67 studies are available which, while admirable, still falls well below the current industry standard of 106. In its place, Scottrade Pro, a joint initiative with Interactive Brokers, was announced. Also in 2016, usability was further improved with the addition of a new layout bar in the header allowing users to quickly swap between layouts. In April 2015, Scottrade and OptionsHouse parted ways, ending the Scottrade OptionsFirst program. Within a few rings, I was speaking with a rep from my local branch office. To cut to the chase: Scottrade lives up to its commercials. With not difficult buttons to open new windows and three customizable layouts, I found the application functionality to be straightforward.

Lastly, charting now also includes what Scottrade calls Calculated Symbols, which can be used to produce a variety of custom views such as analyzing a pairs trade, for example. Looking at tools, charting was enhanced in 2016 with the addition of a handful of new technical indicators, including Ichimoku Cloud, Dividend Indicator, Earnings Indicator, and Volume on Price, among others. Overall depth is where the platform really suffers. And this offering is a straightforward and enjoyable experience. SmartText analysis is available for charts, sectors and industries, and earnings. Within several hours of completing my application, a Scottrade rep from my local branch office called me, welcoming me to the broker, letting me know where they were located, and asking if I had any questions. This makes Scottrade less expensive than nearly all of its direct competitors. Scottrader Streaming Quotes offers.

He enjoys sharing his experiences through his personal blog, StockTrader. TD Ameritrade leads the industry in multiple categories and is a great parent for Scottrade. The application was a breeze as I filled in information and took advantage of the live chat assistance. TD Ameritrade and Merrill Edge, a fantastic finish. Scottrade, with its network of more than 500 branch offices and wonderful customer support, offers clients a large selection of investments and quality research to make educated investment decisions. My only other criticism would be that the quote screen window does not display the market index returns in large numbers at the top.

The FRIP is an industry first, and the clients I spoke with love it. Scottrade is mostly less expensive. With research provided by Morningstar, my personal provider choice for mutual funds research, Scottrade does not disappoint. Phone support aside, Scottrade also stands out for its email support and places middle of the pack for live chat. However, Scottrade clients can expect some fantastic changes over the next several years. And considering the competition, this is no small feat. ETFs are your thing, then consider Charles Schwab, ETRADE, or TD Ameritrade, as each broker offers more than 100 of them. See our list of recommended brokers for options trading. As a Scottrade client, I am excited for the future.

Functionality is also widespread; however, across the board, ELITE trails the competition due to a lack of depth. Scottrade offers two platforms: Scottrader Streaming Quotes and Scottrade ELITE. Not only did he know the Scottrade website like the back of his hands, but he had no trouble answering my questions regarding my new account and website. This is generally considered to be an indication of a bearish trend. Focusing on usability first, Scottrade ELITE windows are labeled with clean, clear icons which makes tweaking settings a breeze. Scottrade also added a new visualization tool, allowing you to see how each screen result flows through your predefined filters.

Scottrade and TD Ameritrade combined will house a staggering 10 million clients. Scottrade to be the only online broker that completely leans on its local branch office network. Similar to Scottrader Streaming Quotes, the platform is mostly not difficult to use. Instead, they are small items at the bottom and do not include percentage return for the day. Thomson Reuters, and Market Edge. At the time this review went to press in February 2017, it was still too early to know how Scottrade would be integrated. IMPORTANT: TD Ameritrade announced it was acquiring Scottrade in October, 2016. By clicking Continue you will be leaving the Scottrade, Inc. While there is income potential from spread trading, there are additional risks, which include, but are not limited to the risk of being assigned on one leg due to early exercise and order execution risk.

None of the information presented constitutes a recommendation by Scottrade or its affiliates to buy, sell or hold any security or financial product or instrument, or to engage in any specific investment method. The value of your investment will fluctuate over time and you may profit or lose money. Scottrade receives commissions for orders you place with IB. Where would you like to log in? Although the sources are deemed to be reliable, Scottrade makes no warranty with respect to the contents, accuracy, completeness, timeliness, suitability or reliability of the information. Under a clearing agreement between Scottrade and IB, Scottrade will be responsible for providing certain customer support for ScottradePRO accounts. IB and Scottrade are separate and unaffiliated companies. By clicking Log In you will be leaving the Scottrade, Inc.

Margin Disclosure Statement and information on lending policies, interest charges and the risks associated with margin accounts. ScottradePRO is no longer accepting new clients. ScottradePRO is brought to you by Scottrade. The Toronto Dominion Bank. TD Ameritrade is a trademark jointly held by TD Ameritrade IP Company, Inc. Supporting documentation for any claims, comparison, recommendations, statistics, or other technical data, will be supplied upon request. Interactive Brokers, please visit www. The choice to engage in a particular investment method or use a specific investment tool should be based solely on your own research and evaluation of the risks involved, your financial circumstances and your investment objectives. ScottradePRO, account opening, approval, monitoring, maintenance and supervision, order acceptance and execution, margin maintenance, custody, clearing and settlement services.

Under a clearing agreement between Scottrade and IB, Scottrade will be responsible for providing certain customer support for these accounts.