I have no options experience and I am trying to understand what the differences in the various levels are. I was hoping I could use cash to back calls and puts with level 1 but this does not seem to be the case. Can anyone provide details?
Also, since e-trade only allows upgrades every 90 days, I'm looking for a broker which will allow me to back calls and puts with cash immediately after opening the account.
Disclaimer: I realize these are high risk investments which could result in a complete loss. That's what I'm looking for and I am investing only risk capital in them, as I do with the Forex.
Thank you.
I understand a 'greater than initial investment loss' possibility when writing options but when buying calls and puts backed with cash is this still possible?
Thinkorswim has no levels. You can short a call or put right from day one. There is no test to pass or wait time.
When you are long a call or put the max risk is the premium you paid but when you sell the option you has unlimited risk if its not hedged. I personally don't like naked trading due to the margin requirements. I do use a combination of long and short options as part of a credit or debit spread.
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