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How to Buy and Sell Options on E*Trade

eTrade options

E*Trade is one of the leading online brokers for trading of 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 article will discuss the importance of E*Trade options, why you should choose E*Trade for options trading, E*Trade options fees and E*Trade binary options.

Understanding Options

The first thing you need to do is understand what is meant by options in the trading world.

Options play a major role in any investor’s profile. Options have a wide range of uses. They can be used by investors to create income, to predicting how the market will change, and for dealing with any sort of risk during trading. You can either choose to ‘put’ options, or you ‘call’ options.

Put simply, ‘Put’ is when you bet that the price will decrease whereas ‘Call’ is when you bet that the price will increase. It is also important to note that an option is not an obligation, rather it is a right for buying or selling a certain quantity of stocks.

Here’s a quick video that explains why trade options:

How to Start Trading Options

Before you start to trade, there are a few things that you need to know. First off, if you want to trade ‘Put’ options with E*Trade you’ll need to have a margin account that has been approved.

Secondly, investors are provided with two options. 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.

E*Trade options trading fees are $9.99 for stock trades and an additional $45 for trades that are broker-assisted. Click here to learn more about the fees E*Trade charges.

E*Trade Options: Step-By-Step Guide for Buying and Selling


buy options on etrade

Our E*Trade Options Buying & Selling Guide is quick and easy. Just follow the steps outlined below: 

  1. The first thing you’d need to do is locate the “Trading Tab” on the screen. Once you find it, click on it for further options to appear. Among the new options you will see the “Trade Option”. Go ahead and simply click on it.
  2. Now, put in the stock symbol of the company for which you want to purchase the options on and click on the “Get Quote” button. This will open up an option chain for you.
  3. Choose the month of expiry you want to trade in the option and click 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. We went through the difference between a ‘Put’ and ‘Call’ option above.
  4. 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, click on “Preview order”.
  5. Thoroughly go through the page of the preview order. If everything is fine then go ahead and click “Submit Trade”.

The order in which you have placed is the order in which it’ll be executed if your trade has no problem. The option will be added to your portfolio.

Why Choose E*Trade

Apart from being really easy to use, E*Trade 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 E*Trade as your online broker.

Options Chains

With risk parameters, multiple chain types, and easy-to-use formats, the options chains do almost all of the work for you.

Options Screener

With the options screener, you can scan the whole market and identify strategic options that match your risk tolerance, goals, and time horizon.

Strategy Optimizer

You can use the strategy optimizer to analyze all of the potential strategies in order to find out one which suits you the most.

Probability Calculator

Based on the volatility and the time frame you choose, you can know the probability regarding the closing of the stock.

Conclusion

E*Trade 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.

The post How to Buy and Sell Options on E*Trade appeared first on Personal Income.

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About Carol St. Amand

Carol St. Amand

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