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Options Trading

Who’s the Boss? You Are.


Consider an options strategy to ride the markets like a pro.

Enroll in options trading

How does options trading work?

Let’s start with the options definition. An option is a contract that allows someone the ability to buy or sell a security at a date in the future. One option contract typically covers 100 shares of stock.

When you opt in to options during enrollment, you may purchase or sell options.

Options Holder

If you purchase an option, you are known as an options holder. Options holders have the right to buy or sell the underlying asset. Holders may exercise the contract (meaning to use their right), sell the contract, or allow the contract to expire.

Options Writer

If you sold an option, you are known as an option writer, which means you are obligated to buy or sell the underlying asset if a holder exercises the contract.

No matter how complex options may be, they all boil down
to two types – calls
and puts.

A call is an option that gives the holder the right to purchase an asset at a stated price within a specific timeframe.

A put is an option that gives the holder the right to sell an asset at a stated price within a specific timeframe.

A premium is the price of an option contract. Holders pay the premium; writers receive the premium.

An expiration date marks when an options contract expires. Expired contracts cannot be exercised.

A strike price is the agreed-upon price of the option’s underlying asset. Even if the market goes up or down, the strike price must be honored.

Understanding the holder-writer relationship.

CALL OPTIONS PUT OPTIONS
Holder Has the right to buy an
option’s underlying asset.
Has the right to sell an option’s
underlying asset.
Writer Obligated to sell an option’s
underlying asset if the holder
decides to exercise the option.
Obligated to purchase an option's
underlying asset if the holder
decides to exercise the option.
Call options Has the right to buy an option’s
underlying asset.
Put Options Has the right to sell an option’s
underlying asset.
Call Options Obligated to sell an option’s underlying asset if the holder decides to exercise the option.
Pull Options Obligated to purchase an option's underlying asset if the holder decides to exercise the option.
 

Opportunity knocks.

If you want to increase your trading opportunities, you might find that options offer more possibilities. Options trading serves as a useful strategy when you make efforts to reach your investment goal in any market condition.

Trading options presents you with the ability to manage your investment risk and empowers you to implement a speculative strategy or protect a position.

Trade your way.

Open an account in just a few simple steps and start trading immediately.

Open an Account

Want a hands-off approach? Check out Managed Portfolios.