Here are few initial steps that can help you in setting up your trading account .
- Before you start trading options you need to setup a trading account with a broker. Turns out obtaining options trading privileges are not so easy to setup. Follow these steps and your chances will improve.
- If you don’t have an online brokerage account you will need to choose one and fund it.
- Once you have an active brokerage account you should be able to sign up for options trading via your online account. It is also possible during account signup that you could apply for option privileges directly. In either case you will need to apply for options trading privileges. They don’t just hand them out like stock trading privileges. Your brokerage will have an online form you can fill out.
- When filling out the options privileges form, don’t ask for all privileges to all levels of options trading. Just go for the basic level that gives you exchange traded long puts and long calls. This should be the second level; the first level is for covered calls and puts (where you own the stock you want to issue options on).
- Next, and a key step, experience level. If you put down in the form you have no experience you probably will only get approved for covered calls and puts. You need to relay your experience level properly. If you have been studying options for some time, performed practice trades on paper and have developed an understanding of the risks, then you have some experience. You should put down in the form some level of experience and explain what you mean by that experience.