Investor Glossary-option accountInvestor Glossary-option accountInvestor Glossary-option accountInvestor Glossary-option accountInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Option Account

The HTML to link to this page
 

An option account is an account opened with an options or securities firm that permits a customer to trade options. The customer opening an option account must have margin and sign an options agreement prior to trading. The level a customer will be allowed to trade at in an option account is determined by their investing experience. The first level, in an option account allows covered call writing. This is considered the most conservative strategy for option trading. The second level, in an option account allows customers to buy puts and calls. More advanced levels in an option account permit customers to implement sophisticated option strategies like straddles and spreads. The most advanced level an option account can be approved for is uncovered call writing. The requirements necessary to trade in an option account of this level are more stringent. The customer must convey option savvy and have the financial resources necessary to maintain an option account with this degree of risk.



Rate this option account definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: stock market close, 1031 exchange, risk management, ex-dividend date, average price per share, Zero Cost Collar, 1035 exchange, implied volatility, option premium, inflation, debt service coverage, real GDP, phantom income, class C shares, labor relations, current ratio, covered put, irrevocable trust, annual return, ex-dividend, FICO score, APR, Key Rate Duration, margin rate, FTSE, command economy, LIBOR, 144a, stock split, open position, dividends payable, balance sheet, reverse mortgage, VIX, liquidity ratio, EBITDA, 401a, required rate of return, deferred revenue, diluted share, per diem, minority interest, in escrow, retained earnings, wholly-owned subsidiary, deferred tax, cancelled check, limit order, quality assurance


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use