Schwab is your one-stop destination for tapping into the adrenaline-fueled world of options trading. Since its acquisition of TD Ameritrade, Schwab now serves you with the integration of the Thinkorswim trading platform, a potent tool tailor-made for the intricate dance of options trading. So, if you’re a Schwab hoarder, let’s talk about diving into options trading and understanding what it takes to get yourself approved for a thrilling ride.
What Is Options Trading?
Options trading is a tantalizing world where you dance with financial derivatives, riding the waves of underlying asset values. Picture this – you get the right to buy an underlying asset with a “call” option or sell it with a “put” option at a given price on a specified date. And here’s where the magic happens – your pockets get heavier or lighter based on the rhythmic movements of the asset’s price. But remember, this rollercoaster ride isn’t for the faint-hearted. It’s high-stakes, high-tension and pulsating. So, if you’re not a pro at this, talk to a financial advisor because you’re going to need it.
What to Do With Unprofitable Options
The best thing about options trading is that you hold the power. If your contract is unprofitable on the expiration date, you can merely let it expire with no further action from your end. That’s right, no fuss, no muss. You’re not held captive. You’re in control.
But it’s not all sunshine and rainbows. Buying an options contract comes at a cost – the premium. This upfront payment is a fixed cost, known for brewing adventure and risk. So while it’s exhilarating, let’s not lose sight of the fact that it’s also heart-pounding and high-energy.
How To Add Options To A Schwab Account
Adding options to your Schwab account is rather painless. However, you need to apply and wait to get approved. And when the destination is Schwab, who would want to miss out on this thrill?
Levels of Options Permissions
When it comes to Schwab, they’ve got four tantalizing levels of options trading, each one unlocking new doors to a world filled with escalating risk and complexity. Picture this – you want to be at Level 3, basking in the glow of complicated and high-risk trades. It’s a whole new ball game out there, and Schwab is holding the key.
How to Apply
Applying for options at Schwab can be as easy as enjoying a hot cup of coffee in the morning. You can do it the traditional way, filling out a form and whizzing it through offline. Or, you can take the modern route and do it online, with a few clicks here and there. Once done, it’s just a matter of waiting for the golden “approved” stamp.
With Schwab’s user-friendly approach, options trading is a breeze. Apply and get approved effortlessly, and then dive headfirst into the world of options trading using the Thinkorswim platform. It’s your ticket to board the high-speed chase of options trading with Schwab at the driver’s seat.
Options Trading Tips
Photo credit: ©iStock.com/peterschreiber.media, ©iStock.com/filo, ©iStock.com/shih-wei
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.