What are options trading

what are options trading optionsXpress » Stocks, Options & Futures. We're integrating with Schwab! plus Schwab's specialized resources and support. for equity and options traders.

Open a Schwab account. Looking to trade Futures? Already an optionsXpress client? Check out our upcoming webinars led by the. Check the background of optionsXpress or one of its investment professionals on FINRA's BrokerCheck.

Brokerage Products Not FDIC Insured · No Bank Guarantee · May Lose Value. optionsXpress, Inc. makes no investment recommendations and does not provide financial, tax or legal advice. Content and tools are provided for educational and informational purposes only. Any stock, options, or futures symbols displayed are for illustrative purposes only and are not intended to portray a recommendation to buy or sell a particular security.

Products and services intended for U. S. customers and may not be available or offered in other jurisdictions. Online trading has inherent risk. System response and access times that may vary due to market conditions, system performance, volume and other factors. Options and futures involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options and Risk Disclosure Statement for Futures and Options on our website, prior to applying for an account, also available by calling 888.280.8020 or 312.629.5455.

An investor should understand these and additional risks before trading. Multiple leg options strategies will involve multiple commissions. Charles Schwab & Co., Inc.

, optionsXpress, Inc. , and Charles Schwab Bank are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. Brokerage products are offered by Charles Schwab & Co., Inc. (Member SIPC) ("Schwab") and optionsXpress, Inc.

(Member SIPC) ("optionsXpress"). Deposit and lending products and services are offered by Charles Schwab Bank, Member FDIC and an Equal Housing Lender ("Schwab Bank"). © 2017 optionsXpress, Inc. All rights reserved. Member SIPC.

optionsXpress » Stocks, Options & Futures. We're integrating with Schwab! plus Schwab's specialized resources and support. for equity and options traders. Open a Schwab account.

Looking to trade Futures? Already an optionsXpress client? Check out our upcoming webinars led by the. Check the background of optionsXpress or one of its investment professionals on FINRA's BrokerCheck.

Brokerage Products Not FDIC Insured · No Bank Guarantee · May Lose Value. optionsXpress, Inc. makes no investment recommendations and does not provide financial, tax or legal advice.

Content and tools are provided for educational and informational purposes only. Any stock, options, or futures symbols displayed are for illustrative purposes only and are not intended to portray a recommendation to buy or sell a particular security. Products and services intended for U. S. customers and may not be available or offered in other jurisdictions.

Online trading has inherent risk. System response and access times that may vary due to market conditions, system performance, volume and other factors. Options and futures involve risk and are not suitable for all investors.

Please read Characteristics and Risks of Standardized Options and Risk Disclosure Statement for Futures and Options on our website, prior to applying for an account, also available by calling 888.280.8020 or 312.629.5455. An investor should understand these and additional risks before trading. Multiple leg options strategies will involve multiple commissions. Charles Schwab & Co., Inc., optionsXpress, Inc.

, and Charles Schwab Bank are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. Brokerage products are offered by Charles Schwab & Co., Inc. (Member SIPC) ("Schwab") and optionsXpress, Inc. (Member SIPC) ("optionsXpress").

Deposit and lending products and services are offered by Charles Schwab Bank, Member FDIC and an Equal Housing Lender ("Schwab Bank"). © 2017 optionsXpress, Inc. All rights reserved. Member SIPC. Options Basics Tutorial.

Nowadays, many investors' portfolios include investments such as mutual funds, stocks and bonds. But the variety of securities you have at your disposal does not end there. Another type of security, known as options, presents a world of opportunity to sophisticated investors who understand both the practical uses and inherent risks associated with this asset class.

The power of options lies in their versatility, and their ability to interact with traditional assets such as individual stocks. They enable you to adapt or adjust your position according to many market situations that may arise. For example, options can be used as an effective hedge against a declining stock market to limit downside losses. Options can be put to use for speculative purposes or to be exceedingly conservative, as you want.

Using options is therefore best described as part of a larger strategy of investing. This functional versatility, however, does not come without its costs. Options are complex securities and can be extremely risky if used improperly. This is why, when trading options with a broker, you'll often come across a disclaimer like the following Options involve risks and are not suitable for everyone.

Option trading can be speculative in nature and carry substantial risk of loss. Only invest with risk capital. Options belong to the larger group of securities known as derivatives.

This word has come to be associated with excessive risk taking and having the ability crash economies. That perception, however, is broadly overblown. All “derivative” means is that its price is dependent on, or derived from the price of something else.

Put this way, wine is a derivative of grapes ketchup is a derivative of tomatoes. Options are derivatives of financial securities – their value depends on the price of some other asset. That is all derivative means, and there are many different types of securities that fall under the name derivatives, including futures, forwards, swaps (of which there are many types), and mortgage backed securities. In the 2008 crisis, it was mortgage backed securities and a particular type of swap that caused trouble.

Options were largely blameless. (See also 10 Options Strategies To Know .) Properly knowing how options work, and how to use them appropriately can give you a real advantage in the market. If the speculative nature of options doesn't fit your style, no problem – you can use options without speculating.

Even if you decide never to use options, however, it is important to understand how companies that you are investing in use them. Whether it is to hedge the risk of foreign-exchange transactions or to give employees ownership in the form of stock options, most multi-nationals today use options in some form or another. This tutorial will introduce you to the fundamentals of options.

Keep in mind that most options traders have many years of experience, so don't expect to be an expert immediately after reading this tutorial. If you aren't familiar with how the stock market works, you might want to check out the Stock Basics tutorial first. Equifax data hack What are your legal options?

Can you sue Equifax? We look at that question, as well as what the government is doing and what you should do if you're one of the 143 million affected. Nearly half the US woke up Friday to find out their Social Security number might have been stolen, thanks to hackers who breached the database of a top credit monitoring service.

Equifax is one of three major credit monitoring companies, which victims of data breaches typically turn to for protection. Now, a breach at the company has exposed the Social Security numbers, names, addresses and birth dates of up to 143 million people in the US alone. Folks in Canada and the UK have also been affected. About 209,000 people had their credit card information stolen as well. The Federal Trade Commission has advised people to monitor their accounts closely, and to place a fraud alert on all their files.

The massive number of victims has prompted a lot of questions. Equifax has provided a tool for people to find out if they're affected, but its usefulness has been questionable, with the company telling people who've entered fake names that they were hit by the breach. Equifax is also offering potential victims free credit monitoring and identity theft protection, but the terms of use for that program have caused confusion.

Don't fret though. We'll look at the legal situation below. And in CNET's How To section, you'll find a general guide for those who think they might've been nailed by the breach. Yes, either as part of a class action lawsuit or on your own. There was some question about this due to certain language in the terms of use for Equifax's TrustedID Premier program, which offers a year of free credit monitoring as a result of the hack.

The terms of use suggested that if you signed up for TrustedID, you'd give up the right to sue Equifax over the breach in a class action (though you could still sue as an individual in a small claims court). It looked even more suspicious that the terms were changed on Wednesday, a day before the revelation of the hack. But Equifax updated its Frequently Asked Questions on Friday afternoon and noted that the terms of use don't apply to the breach. The free credit monitoring program that Equifax is offering potential victims comes with some legal restrictions. On its website, Equifax added a statement saying the "arbitration clause and class action waiver included in the TrustedID Premier Terms of Use applies to the free credit file monitoring and identity theft protection products, and not the cybersecurity incident.

" Even before that confirmation, it seemed unlikely Equifax would use the clause to protect itself from lawsuits. Tom Rohback, an attorney who focuses on data breach litigation, read through TrustedID Premier's terms of use and said you would've still been able to sue Equifax, despite agreeing to the TrustedID arbitration clause. That's because TrustedID Premier, while owned by Equifax, is a separate entity from its parent company, Rohback said, and the TrustedID terms of use serve to protect only the subsidiary company. Equifax has its owns terms of use, with an arbitration clause designed to protect the entire company. TrustedID Premier protects only itself, he noted.

"This agreement would only cover breaches committed by TrustedID, in its future monitoring," Rohback said. Peter Vogel, an attorney who also works for the American Arbitration Association, suggested the clause wouldn't have stood up in court anyway. That's because the terms of use page doesn't require users to agree by hitting a button. "The courts generally require that there be a click agreement," Vogel said.

There isn't a click agreement on the TrustedID terms of use page. "You could make an argument that the arbitration provisions wouldn't apply." Even the arbitration clause in Equifax's own terms of use can be avoided. The fine print says you can opt out. You simply need to send a letter within 30 days that includes your name, address and Equifax user ID, along with a statement that you "do not wish to resolve disputes with Equifax through arbitration.

" This still sounds suspicious. It should. In July, the Consumer Financial Protection Bureau decided to ban companies from using arbitration clauses, pointing out that such clauses have prevented massive numbers of people from taking legal action. New York's attorney general, Eric Schneiderman, on Friday wrote in a tweet that the arbitration clause was "unenforceable" and that his staff had demanded Equifax remove it. Is anyone suing Equifax yet? Actually, two lawsuits seeking class action status have been filed so far.

Michael Fuller is representing two Oregon residents who filed a suit Thursday, claiming Equifax failed to adequately protect the personal information of 143 million people. You can join the case by signing up on equifaxcase. com. The plaintiffs are seeking $70 billion in damages from Equifax over the breach.

Despite the massive payout, if successful, each victim would receive only $489, and that's before legal fees. That's how much your Social Security number, name, address and birthdate would be worth. Still, "It could be the largest class action lawsuit ever filed," Fuller said.

"It involves almost half the country." Fuller has gotten so many calls about the lawsuit that he began redirecting people to their local attorney general's office. Meanwhile, in Equifax's home state of Georgia, two plaintiffs have filed another suit against the company.

The lawsuit alleges Equifax could have prevented the data breach, and that it failed to notify victims in a timely manner. The plaintiffs are being represented by John Yanchunis, the lead counsel representing victims affected by the record-breaking breach of Yahoo. Yanchunis has also represented victims of breaches involving Target and Home Depot.

"Equifax contains one of the largest databases of consumer information and they should have been better prepared for any attempt to penetrate its systems," Yanchunis said in a statement. Is the US government doing anything about this? On Friday morning, Democratic Rep. Ted Lieu of California sent a letter to the House Judiciary Committee chair asking the committee to investigate the breach and why it took more than six weeks for Equifax to go public with the announcement. Lieu is requesting that Congress call representatives from Equifax, TransUnion and Experian, the "big three" credit monitoring agencies, to testify on Capitol Hill about the breach and about how they protect their computer systems.

Rep. Ted Lieu wrote a letter calling for an investigation of Equifax. Bill Clark Getty Images. Democratic Sen.

Mark Warner of Virginia, the vice chair of the Senate Intelligence Committee, criticized Equifax over its "profoundly troubling" breach and suggested new data protection policies for Congress to pass. Equifax is also working with the FBI on the investigation. Three Equifax executives, including its chief financial officer, sold shares in the company just three days after the breach was first discovered. The Securities and Exchange Commission didn't comment on whether it was investigating insider trading. First published Sept.

8, 1126 a. m. PT. Update, 1245 p. m. PT Recasts story in light of Equifax's updated FAQ. Update, 232 p. m. PT Changes made throughout for clarity and readability. CNET Magazine Check out a sample of the stories in CNET's newsstand edition.

Logging Out Welcome to the crossroads of online life and the afterlife. The NASDAQ Options Trading Guide. Equity options today are hailed as one of the most successful financial products to be introduced in modern times. Options have proven to be superior and prudent investment tools offering you, the investor, flexibility, diversification and control in protecting your portfolio or in generating additional investment income. We hope you'll find this to be a helpful guide for learning how to trade options.

Understanding Options. Options are financial instruments that can be used effectively under almost every market condition and for almost every investment goal. Among a few of the many ways, options can help you Protect your investments against a decline in market prices Increase your income on current or new investments Buy an equity at a lower price Benefit from an equity price’s rise or fall without owning the equity or selling it outright.

Benefits of Trading Options Orderly, Efficient and Liquid Markets. Standardized option contracts allow for orderly, efficient and liquid option markets. Options are an extremely versatile investment tool.

Because of their unique riskreward structure, options can be used in many combinations with other option contracts andor other financial instruments to seek profits or protection. An equity option allows investors to fix the price for a specific period of time at which an investor can purchase or sell 100 shares of an equity for a premium (price), which is only a percentage of what one would pay to own the equity outright. This allows option investors to leverage their investment power while increasing their potential reward from an equity’s price movements.

Limited Risk for Buyer. Unlike other investments where the risks may have no boundaries, options trading offers a defined risk to buyers. An option buyer absolutely cannot lose more than the price of the option, the premium. Because the right to buy or sell the underlying security at a specific price expires on a given date, the option will expire worthless if the conditions for profitable exercise or sale of the option contract are not met by the expiration date.

An uncovered option seller (sometimes referred to as the uncovered writer of an option), on the other hand, may face unlimited risk. This options trading guide provides an overview of characteristics of equity options and how these investments work in the following segments Enter a company name or symbol below to view its options chain sheet How to Trade Options – Options Trading Basics. All investors should have a portion of their portfolio set aside for option trades.

Not only do options provide great opportunities for leveraged plays they can also help you earn larger profits with a smaller amount of cash outlay. What&rsquos more, option strategies can help you hedge your portfolio and limit potential downside risk. No investors should be sitting on the sidelines simply because they don&rsquot understand options.

This Guide to Options Trading Basics provides everything you need to quickly learn the basics of options and get ready for trading. So let&rsquos get started. &mdash Two Basic Types of Options. &mdash At the Money, In the Money, Out of the Money.

Understanding Options Risk &ndash How to Trade Options. &mdash Prices Can Move Very Quickly. &mdash Losses Can Be Subtantial on Naked Short Positions. &mdash Other Common Pitfalls.

&mdash The Price Tag Problem. &mdash Buying Call Options. &mdash Buying Put Options. &mdash Margin &ndash Getting &ldquoApproval&rdquo to Trade Options. what are options trading For many stock traders, binary options trading is still shrouded in mist.

They consider it to be a very dangerous form of trading which should be avoided at all costs. Nothing could be further from the truth once a trader knows what he or she is doing, options trading could in fact be as lucrative as stock trading and more – with a lower degree of risk and a higher degree of flexibility. An option is the right, but not the obligation to buy a specific share, currency, commodity or futures contract at the agreed price at a certain future date.

A trader can, for example, purchase an option which gives them the right to buy 100 shares of Company X at a certain price (called the strike price ) three months from now. Benefits of options trading. To buy 100 shares of Company X outright could cost a trader a few thousand dollars. Because options are leveraged , however, he or she can buy an option at a much lower price. This could be as low as 1% of the actual stock price.

But apart from that, how will options trading benefit a stock trader compared to buying the actual share? This part is quite easy. Let’s assume this trader purchased an option to buy 100 shares of Company X for $21 three months from now. If the share price should rise to $26 by that time, the trader will get the full benefit of the price movement, i. e. $5 x 100 shares = $500 – without actually ever owning the stock. Remember there is no obligation to exercise the option at expiry the option price will reflect the price increase of the share, so a full profit will be made.

If the price of Company X shares should close below the strike price of $21 three months from now, even if it drops to $10, the options trader can never lose more than the amount initially paid for the option. The example we quoted above is that of a so-called call option . Someone should buy one of these if they expect the price of the underlying asset (share, commodity etc.) to go up between now and the expiry date.

But the incredible flexibility of options trading also allows a trader to benefit when the price of the underlying asset goes down. This is called a put option. Don’t let it become confusing – it works in exactly the same way as a call option, except that the trader will benefit if the asset price moves below the strike price. As with call options, when someone buys a put option, he or she can never lose more than the initial price that was paid for the option. This is called the premium of the option.

Options trading can become much more involved than the examples given above, but once the trader understand the basics the learning curve is not so steep. There are even option trading strategies to benefit from a completely stagnant market, but more about that later. Options Basics What Are Options? Options are a type of derivative security. They are a derivative because the price of an option is intrinsically linked to the price of something else.

Specifically, options are contracts that grant the right, but not the obligation to buy or sell an underlying asset at a set price on or before a certain date. The right to buy is called a call option and the right to sell is a put option. People somewhat familiar with derivatives may not see an obvious difference between this definition and what a future or forward contract does. The answer is that futures or forwards confer both the right and obligation to buy or sell at some point in the future. For example, somebody short a futures contract for cattle is obliged to deliver physical cows to a buyer unless they close out their positions before expiration.

An options contract does not carry the same obligation, which is precisely why it is called an “option.” A call option might be thought of as a deposit for a future purpose. For example, a land developer may want the right to purchase a vacant lot in the future, but will only want to exercise that right if certain zoning laws are put into place. The developer can buy a call option from the landowner to buy the lot at say $250,000 at any point in the next 3 years. Of course, the landowner will not grant such an option for free, the developer needs to contribute a down payment to lock in that right.

With respect to options, this cost is known as the premium, and is the price of the options contract. In this example, the premium might be $6,000 that the developer pays the landowner. Two years have passed, and now the zoning has been approved the developer exercises his option and buys the land for $250,000 – even though the market value of that plot has doubled.

In an alternative scenario, the zoning approval doesn’t come through until year 4, one year past the expiration of this option. Now the developer must pay market price. In either case, the landowner keeps the $6,000. A put option, on the other hand, might be thought of as an insurance policy.

Our land developer owns a large portfolio of blue chip stocks and is worried that there might be a recession within the next two years. He wants to be sure that if a bear market hits, his portfolio won’t lose more than 10% of its value. If the S&P 500 is currently trading at 2500, he can purchase a put option giving him the right to sell the index at 2250 at any point in the next two years.

If in six months time the market crashes by 20%, 500 points in his portfolio, he has made 250 points by being able to sell the index at 2250 when it is trading at 2000 – a combined loss of just 10%. In fact, even if the market drops to zero, he will still only lose 10% given his put option. Again, purchasing the option will carry a cost (its premium) and if the market doesn’t drop during that period the premium is lost. These examples demonstrate a couple of very important points. First, when you buy an option, you have a right but not an obligation to do something with it. You can always let the expiration date go by, at which point the option becomes worthless. If this happens, however, you lose 100% of your investment, which is the money you used to pay for the option premium.

Second, an option is merely a contract that deals with an underlying asset. For this reason, options are derivatives. In this tutorial, the underlying asset will typically be a stock or stock index, but options are actively traded on all sorts of financial securities such as bonds, foreign currencies, commodities, and even other derivatives. Buying and Selling Calls and Puts Four Cardinal Coordinates.

Owning a call option gives you a long position in the market, and therefore the seller of a call option is a short position. Owning a put option gives you a short position in the market, and selling a put is a long position. Keeping these four straight is crucial as they relate to the four things you can do with options buy calls sell calls buy puts and sell puts. People who buy options are called holders and those who sell options are called writers of options.

Here is the important distinction between buyers and sellers Call holders and put holders (buyers) are not obligated to buy or sell. They have the choice to exercise their rights if they choose. This limits the risk of buyers of options, so that the most they can ever lose is the premium of their options.

Call writers and put writers (sellers), however, are obligated to buy or sell. This means that a seller may be required to make good on a promise to buy or sell. It also implies that option sellers have unlimited risk , meaning that they can lose much more than the price of the options premium.

Don't worry if this seems confusing – it is. For this reason we are going to look at options primarily from the point of view of the buyer. At this point, it is sufficient to understand that there are two sides of an options contract. To understand options, you'll also have to first know the terminology associated with the options market.

The price at which an underlying stock can be purchased or sold is called the strike price. This is the price a stock price must go above (for calls) or go below (for puts) before a position can be exercised for a profit. All of this must occur before the expiration date.

In our example above, the strike price for the S&P 500 put option was 2250. The expiration date, or expiry of an option is the exact date that the contract terminates. An option that is traded on a national options exchange such as the Chicago Board Options Exchange (CBOE) is known as a listed option. These have fixed strike prices and expiration dates. Each listed option represents 100 shares of company stock (known as a contract).

For call options, the option is said to be in-the-money if the share price is above the strike price. A put option is in-the-money when the share price is below the strike price. The amount by which an option is in-the-money is referred to as intrinsic value.

An option is out-of-the-money if the price of the underlying remains below the strike price (for a call), or above the strike price (for a put). An option is at-the-money when the price of the underlying is on or very close to the strike price. As mentioned above, the total cost (the price) of an option is called the premium. This price is determined by factors including the stock price, strike price, time remaining until expiration (time value) and volatility.

Because of all these factors, determining the premium of an option is complicated and largely beyond the scope of this tutorial, although we will discuss it briefly. Although employee stock options aren't available for just anyone to trade, this type of option could, in a way, be classified as a type of call option. Many companies use stock options as a way to attract and to keep talented employees, especially management. They are similar to regular stock options in that the holder has the right but not the obligation to purchase company stock. The contract, however, exists only between the holder and the company and cannot typically be exchanged with anybody else, whereas a normal option is a contract between two parties that are completely unrelated to the company and can be traded freely.

Welcome to OptionsTrading. org. Trading options is an increasingly popular form of investment that is accessible to anyone and does not require a huge amount of starting capital. If you are prepared to put some time and effort into learning how to trade well then you can potentially make significant sums of money.

On this site you will find a wealth of information to help you do exactly that. You also find recommendations for the best online brokers, in a number of different categories. If you are simply looking for a reputable broker to use right now, then we suggest choosing one from the table below.

These are all quality brokers which come highly recommended, based on both personal experience and extensive research. To find out more about everything this site has to offer, please read on. Competitive Commission Structure Easy to Use Platform for Traders Allows for a Fully Customizable Experience. Competitive Fees Interaction with a Community of Traders Educational Resources for Beginners. One of the Best For Trading Features Top of the Line Trading Platform Extensive Customization Available.

You will notice that we provide reviews on our top ranked brokers. These are very useful when it comes to choosing who to use, as they contain all the details you need to make an informed decision. You can see a full list of all the reviews we provide here.

About OptionsTrading. org. This site comprehensively covers everything you need to know about options trading, ranging from the fundamental basics right up to advanced strategies. If you are a complete beginner you will find all the information you need to get started, explained in a way that is easy to understand. If you are a more experienced trader looking to expand your knowledge then you will find plenty of advanced subject matter that will help you to improve your trading skills.

It is possible for anyone to get involved with this, but there is a lot to learn on the subject. As such OptionsTrading. org is a large site with many pages. To make it easy for you to find exactly what you are looking for we have divided the site into several clearly defined sections. These are as follows.

Beginners should start with the first section and then work through each section in order, while those of you looking for specific information will probably prefer to skip straight to the relevant area. If you would like to know more about what these sections are all about, you can find details on each of them further down the page. There are also a few other articles which you may be interested in. We have written a page explaining in full what this site is all about, and introducing the people behind it. We have compiled a useful glossary of terms too, which is a comprehensive list of the jargon and technical words used. For those of you interested in such things, we have also written a complete history of options.

This details how the market evolved over time to create the thriving industry which exists today. Introduction to Options Trading. This introduction has been compiled specifically with the beginner in mind. If you are completely new to all of this, or investment in general, then this section is the best place for you to start.

We have included detailed articles to explain exactly what a contract is, and what it is is all about. We have explained the benefits and the risks involved, where you can buy and sell contracts and how the contracts work in practice. Finally, we have provided detailed explanations of the key terms and phrases that you will come across – such as moneyness, leverage, margin and time decay.

Basics of the Options Market. Options are one of the more complex financial instruments, and before you can think about starting to buy and sell them you really need to understand certain fundamentals. In this section we have provided comprehensive information about the numerous types of contracts you can trade, and the various orders you will need to place.

This section also includes details on the different trading styles that are typically used and an introduction to spreads, which are a vital component in most of the strategies that can be used. Finally, we have also provided a selection of articles comparing options to other financial instruments such as stocks, bonds and futures. Getting Started with Options Trading.

We have produced this section essentially as a step by to step guide to actually getting started as a trader, and it includes details of all the preparation required before starting. The guide explains the importance of defining your investment objectives and setting out exactly what it is you are trying to achieve. We also offer advice on preparing a trading plan, choosing a suitable online broker, identifying suitable opportunities and recording and managing all your activities.

Other topics covered are how trading levels at brokers work, how to plan individual trades and tips for managing your risk exposure and your investment capital. One of the most important decisions you need to make when setting out is which broker you are going to use. Although you can change your broker at any time, getting the decision right the first time around will greatly enhance your experience, may even increase your profitability, and should certainly make things easier for you. In this section, we provide the details of a number of recommended brokers that we believe are the best around.

As not every trader will necessary be looking for the same things from a broker, we have categorized our recommendations based on different attributes and qualities they have. We have listed the best options brokers for beginners, for example, and the best brokers for trading binary options. Improving Your Trading Skills & Knowledge.

While there is a lot you should learn before you start, most of the relevant information is relatively straightforward and it is simply case of managing to take it all in. You do not need to learn absolutely everything pertaining to options trading at the beginning, but once you have gained some experience you will likely find that you want to further expand your knowledge as you go along. In this section we cover some of the more complex concepts and topics that can really help you improve your skills. A number of more advanced terms and phrases are explained, such as hedging, open interest, legging, rolling and synthetic positions. We also include information on volatility, risk graphs, pricing models, the Greeks and auto trading. Options Trading Strategies.

There is a huge range of different strategies for trading, each of them with their own unique characteristics and each of them designed for different purposes. If you can gain a solid understanding of these different strategies, and develop a skill for using the most appropriate one for any given circumstance, then you will ultimately give yourself the very best chance of being truly successful. Options Trading Platforms.

Experience the power of the Active Trader Pro ®,1 trading platform, the helpful tools on our Fidelity. com pages, and the convenience of mobile trading. To discuss your options strategy with our experienced specialists, call today. Trade with Active Trader Pro ® Active Trader Pro provides an in-depth suite of options tools to monitor market trends, fine-tune strategies, and execute simple and complex options trades.

Direct single - and multi-leg options trades 2 to the exchange of your choice, or let Fidelity's smart order routing help you find the best prices Multi-leg trading ticket allows you to build up to four-legged options strategies Strategy Ideas helps you determine which strike price and expiration have performed best over the previous two years for covered call and cash-secured put strategies Key Statistics and Today's Biggest Trades help you analyze market sentiment Probability and Profit and Loss Calculators let you easily analyze and evaluate your trading ideas or existing positions 3. Trade on our website. Fidelity. com provides in-depth options research, analytics, and idea generation tools integrated with our easy-to-use trading ticket.

Quickly evaluate current market conditions with our Key Statistics and Today’s Biggest Trades Scan the market for unique trading opportunities using prebuilt or custom Market Scanners Validate your strategy with the Probability and Profit and Loss Calculators Trade by simply linking to a prefilled trade ticket to review and submit your single or multi-leg options trade. Trade on your mobile device. Manage your options portfolio from your iPad ® , iPhone ® , Android™, or Windows Phone 8 device with Fidelity Mobile ® apps. Trade options—anytime, anywhere Get real-time quotes for a single option or use the options chain to view them all Track your account positions and preferred securities Get the latest news and views on the market.

Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please read Characteristics and Risks of Standardized Options.

Supporting documentation for any claims, if applicable, will be furnished upon request. Active Trader Pro ® is automatically made available to customers trading 36 times or more in a rolling 12-month period. If you do not meet the eligibility criteria, please contact Active Trader Services at 800-564-0211 to request access.

There are additional costs associated with option strategies that call for multiple purchases and sales of options, such as spreads, straddles, and collars, as compared with a single option trade.