What do I need to know before placing options orders? How do I place an option order? On the page, complete the following information: Step 1 of 3 Account : Choose the account in which you want the order to be placed. Action : Choose the action you wish to complete: Buy to open - open a new position or add to an existing long position i.

Sell to close - close an existing long position i. Sell to open - open a new short position i. You must own the underlying security eg. Buy to close - close an existing short position i.

Contracts: Decide the number of option contracts you wish to buy or sell. Enter positive numbers only. Do not enter fractions or decimals.

Calculate cost: Select Calculate Cost to use our online calculator to determine the total cost of your option purchase transaction, including commission. Option Types: Select either "Call" or "Put".

If you have accepted all exchange agreements, a real time quote will be displayed, otherwise, it will be 20 minutes delayed. Price: Decide whether you would like the market or limit price: Market Price - an order to buy or sell an option at the best available current price.

If your order is placed outside of regular trading hours, the opening value may not reflect closing prices. Limit Price - an order to buy or sell an option at a specific price. The order can be filled only at the specified price or better. A limit order sets the maximum price the client is willing to pay as a buyer, and the minimum price they are willing to accept as a seller.

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Good through: Choose the date the order will be good until up to 90 days. Special instructions: Select either: "Any part" - you will accept any amount of contracts up to the total amount of options requested.

Frequently asked questions

This selection is not allowed for Canadian options. What are the option markets trading hours? Note: If you modify your order many times within a short period of time, you run the risk of duplicate fills. If you wish to buy or sell an option that you expect might fluctuate greatly in price during the market hours, it may be safer to place a limit order instead of a market order. Day orders automatically expire at the end of the day's trading session. You cannot modify or cancel these orders after-market hours. Note: If you don't already have a Vanguard Brokerage Account, you'll also need to open an account.

In reviewing your application, we'll consider your account type and the information you provide about your finances, trading experience, and investment objective. Level 1.

Write covered calls, purchase protective puts, and write covered puts. Margin approval is required to write covered puts. The Options Industry Council's OIC's website has a wealth of education about options, whether you're just beginning or an experienced options trader. Some topics you may want to explore include:. Call You must complete a Margin Account Application to be considered for these trading levels. Options are a leveraged investment and aren't suitable for every investor.

Options involve risk, including the possibility that you could lose more money than you invest. A copy of this booklet is available at theocc. It may also be obtained from your broker, any exchange on which options are traded, or by contacting OCC at S. The booklet contains information on options issued by OCC. It's intended for educational purposes.

No statement in the booklet should be construed as a recommendation to buy or sell a security or to provide investment advice.

The OIC can provide you with balanced options education and tools to assist you with your options questions and trading. Skip to main content. Understanding options trading Options are a complex investment and are not suitable for every investor. Keep these points in mind when trading options: Consider whether options fit with your investment goals, risk tolerance, and objectives.

You could see significant gains—or lose your entire investment—in a relatively short time. You should consult a professional tax advisor to discuss how options strategies may impact your tax situation. Submit your application Complete and submit a Brokerage Option Application, one for each brokerage account that you intend to use for options trading. Complete an option application. Open a brokerage account.