The spread loss amount, if any, that would result if both options were exercised. Please see level 4 for details. For the short option, the value of either 1 or 2, whichever is greater:. For equity options, or equity participation unit options, the margin rate used for the underlying security.
For equity options, or equity participation unit options, the margin rate used for the underlying. For Canadian exchanges, only two-legged option strategies are available. Option strategies with a stock leg or more than two option legs are unavailable. Nobody likes surprises— especially on their monthly statement. Questrade will give you the opportunity to satisfy the deficiency on a best effort basis.
Trading with margin
However, Questrade may liquidate or close your positions if you fail to comply with the terms of the margin call, including, in some cases, without notifying you first. The terms of a margin call are determined at the discretion of Questrade. Typically, you need to initiate all conversion proceedings. To convert funds, log in to Questrade and make an exchange funds request. If the market value of a position in your margin account exceeds your equity, you have a concentrated position.
In some cases, if you are too concentrated on a position, Questrade will increase the minimum margin requirement or request that you reduce the position. There are significant risks when trading on margin. Before trading on margin please review the obligation to maintain margin under section 1. The margin requirement for an FX or CFD position is based on the real time value of your position in the currency of the account.
The margin requirement is dynamic and updates in real time. You can view the margin requirement of a specific FX or CFD instrument on the trade ticket or by clicking Account, and then navigating to Trading Conditions on the menu and searching a specific instrument. The margin utilisation bar at the bottom of the trading platform indicates the percentage of your cash balance reserved for your margin positions. When your margin use increases past a certain threshold, Questrade will automatically liquidate your positions. This will occur automatically regardless whether you have been notified of the margin call or are waiting for your deposit to be completed into your account to satisfy the margin call.
There may also be other market conditions that also require us to immediately close positions to satisfy the margin call. Typically, margin interest rates are lower than credit card rates and unsecured personal loans. Interest is based on an annual rate, calculated daily and charged or credited to your account midway through the following month. Interest accrues on overnight debit or credit balance and is charged or credited to your account midway through the following month.
Except for registered accounts, Questrade will not automatically convert currencies for you when buying securities.
Call options: Learn the basics of buying and selling
With Questrade, you're never alone. If you still have questions, talk to us. We're here. No worries, we'll make things simple. There are two types of option contracts:. There are four basic option positions:. Pays premium money to the writer. Has the right to buy the underlying security at a predetermined price.
Call buyer expects the price of the security to rise in value. Receives premium money from the buyer of the call option. The writer has the obligation to sell the underlying security at the predetermined price, if called upon to do so by the buyer of the call option.
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The call writer expects the price of the underlying security to stay the same or fall in value. Generally, there are two option styles — American and European. An American option may be exercised any time before the expiration date, while a European option may be only be exercised at the expiration date. Almost all stock listed in Canada, and the U. S are American style options, while indices are typically classified as European options. The first step to trading options is to ensure you have permission in your account.
We provide four levels of option permissions, from level 1 for the most basic options trading through to level 4 sophisticated, multi-leg strategies. You can verify your level or change it by logging in to your Questrade account. Now that you've learned the basics, let's learn by using some examples. Example 1 long call options :. The option is in-the-money see glossary. Now Jackie is faced with two choices:. In that case, the seller of the option gets to keep the premium that was paid by the buyer Jackie when he entered the contract.
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Example 2 long put options :. Now Stu is faced with two choices:. In that case, the seller of the put option gets to keep the premium paid by the buyer. Breakdown of the order entry tab: Order details Description Symbol Lookup the symbol or the name of the company of the underlying security you would like to trade and tap the snap quote button to get quotes in real-time data applies to certain exchanges only Expiry Date at which an option owner can exercise their right to buy or sell shares of the underlying stock Strike price Price at which the option owner can buy or sell the shares Quantity Number of option contracts the option owner will purchase Order type Select the type of order you want to use.
To learn more about the different order types, click here Duration Select a duration to specify how long the order should remain active. For more information about durations, click here.
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The information contained in this website is for information purposes only and should not be used or construed as financial or investment advice by any individual. At that point, American investors can start hacking Questrade too.
Check out this Wealthsimple Review for Canadians. You can learn more about him on the About Page , or on his personal site RobertFarrington. He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He is also a regular contributor to Forbes. Other Options. Get Out Of Debt. How To Start. Extra Income. Build Wealth. Credit Tools. At Questrade, many investors will pay high fees without personalized attention. Questrade Review. Robert Farrington.