Do NOT make a post asking for advice, that belongs as a comment in the "Daily advice thread".

Keep discussions civil, informative and polite. Off topic comments, attacks or insults will not be tolerated. Strictly no promotional threads. Do not post your app, tool, blog, event, etc.

A hedge fund analyst explains his stock research process. Full of excellent links to videos, articles, and books.

My application to trade options through my fidelity account was denied. Any other accounts you guys recommend opening that don't have strict requirements for options trading? : TradingForAdults

What are the requirements for level options approval I applied and selected all the requirements Fidelity asked for to get basic options approval and they denied me I don't work for Fidelity, but i am an advisor for a major firm. Typically, in order for us to approve options trading, an options principal will review the request.

They look to make sure that the person requesting has sufficient trading experience and assets to be able to absorb losses. Also, most, but not all, options trade require a margin account. Remember that trading options without experience has a very high level of risk and can enable you to lose your entire principle. Only traders with alot of equity experience should trade them. Many people on reddit talk about options, but realistically they are not as simple as most people believe and require alot of research and knowledge to use them properly.

I would start by learning hedging strategies with buy-stops, sell-stops, stop-loss and limits before moving into options. Margin requirements for options depend on the brokerages option format.

How to get approved for Options Trading? : investing

At the level you are applying for, you will only be able to lose ur initial investment cost. So there is no risk to the brokerage, if they wont take your business go somewhere else. Options are redic complex so be sure to study.

I use them to hedge my long positions in case things become bearish. Im sure it depends on the brokerage.

Top Complaints and Reviews about Scottrade

The more important factor is how much you have in assets so they dont get stuck with any loss. Thats a good question for you broker. A simple phone call would solve get you answers better than here.

I've seen that requirement for a margin account mentioned elsewhere but I don't really get the connection. Is it just that having a margin account speaks towards your level of experience? Yeah I am looking to do covered calls here and there and maybe an occasional call or put after plenty of research and practice.

In reality I would hold off on the options until you are comfortable with using stops and limits and have to time to really research and understand the market. I have seen experienced investors lose a lot if money on options and I would hate to see that happen to you.

Scottrade ActiveTrader | Download

Like it or not, the regulation is there for a reason. Which means that they may run your credit as well to see how honest you are being. We can get a fairly decent estimate of net worth through a credit check. If my levels are correct, 1 being "covered calls" and 5 being "selling naked calls", I can't imagine anyone having a major issue with levels 1 and 2. Trading options can be quite dangerous, of course.

At my firm you either are options approved or not.

That being said, options are one of the most useful tools that I use, but they are not for inexperienced, budget constrained, or unsophisticated investors. As other people have stated options are very risky. If you don't have much experience or a ton of principle you need to definitely specify that you're willing to take on a lot of risk and potentially lose your principal or are speculating.

If that's not what your goals are and you don't have much experience in the way of options then reconsider if you should be trading them with real money at this point.

If you are not opening a margin account, you can get approved for level without much issue typically. While most brokers will pay attention to what type of funds you have in your account, stating your experience and income is generally on the honor system. You are legally allowed to do whatever you like with your money. These options approvals processes are to try to deter some people from harming themselves.

No, you won't get into any trouble lying about your options trading experience. Yes, I've done this many times, at MBTrading, Schwab, and Interactive Brokers. I couldn't get approved for L2 on TDAmeritrade but Scottrade let me. So I moved my entire brokerage to Scottrade. Tda wouldn't even tell me what the reqs are. Use of this site constitutes acceptance of our User Agreement and Privacy Policy.

By signing up, you agree to our Terms and that you have read our Privacy Policy and Content Policy. Log in or sign up in seconds. Submit a new text post. Discuss news items relevant to investors 2.

Share investment ideas and insights 3. WSJ guide on how to pick a financial planner Why we recommend Vanguard Compare brokers. Barron's Online-Broker Review Should I invest a lump-sum, or wait? This has been asked and answered many times in the past. Use the search function or check out this , this , this , this , this or this thread. Useful Online Resources A guide to stock research! You are responsible for your own investment decisions. Please consult with a registered investment advisor before making any investment decision.

Given that index fund returns will likely be higher, I'm thinking of taking the loan and investing the money. Is there a downside I'm not thinking of? All questions about your personal situation should be asked here. FTSE Russell Index Considers Booting Firms With Lots of Non-Voting Shares. This is an archived post. You won't be able to vote or comment. Should I re-apply and lie about my net worth, income, experience, etc?

Will they catch it or do they actually care, or this is just a dance to comply with regulations? Posts are automatically archived after 6 months.