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Buying & selling options

Options are complex investments that aren't for the faint of heart. There's a significantly high degree of risk involved.


  • Options trading gives you the right to take a specific investment action in the future if it benefits you—or let it expire if it doesn't.
  • Options are investments whose value, like other investments, depends on what's happening in the market.
  • You must have our prior approval before you can trade options.

Learn all you can about options

There are 2 basic kinds of options: calls and puts. With options trading, you gain the right to either buy or sell a specific security at a locked-in price sometime in the future.

How to trade options

You have 4 ways to make options transactions:

  • Buy to open. An order to purchase an option.
  • Sell to close. An order to sell an option you hold.
  • Sell to open. An order to write (sell) an option.
  • Buy to close. An order to close an option you wrote.

How options settle

Buying an option

You must have enough money in your money market settlement fund to cover your purchase when you place an order. You can't place an order and fund it later.

Selling an option

The trade will settle on the following business day.

Exercising an option

You must place your request through an investment professional by calling 800-992-8327.

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Call & put options

The right to either buy (call option) a specific security at an agreed-upon price or sell (put option) a specific security at an agreed-upon price sometime in the future.

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Settlement fund

A money market mutual fund that holds the money you use to buy securities, as well as the proceeds whenever you sell.