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


Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
Investor Glossary Index >>> # 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 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
Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
©2004-2014 Investor Glossary - All rights reserved - Terms of Use