TD Ameritrade is a stockbroker that offers an electronic trading platform for the trade of financial assets including common stocks, preferred stocks, futures contracts, exchange-traded funds, forex, options, mutual funds, and fixed income investments, margin lending, and cash management services. TD Ameritrade offers different options levels, you need to request this type of access, and depending on experience it can be granted to you. With TD Ameritrade, the four levels are covered, standard cash, standard margin, and advanced. We will go into depth on the different levels and how to access them in this article.
TD Ameritrade even offers a mobile option for buying options on the thinkorswim platform, allowing you to trade from a smartphone, mobile device, or iPad. The thinkorswim platform is excellent for options traders it has tools and lets you monitor the market. You can plan your strategy, and implement it in one convenient, easy-to-use, combined place free of charge. In addition to there being different levels for trading, there are more than 400 indicators in thinkorswim to assist you with your trading. The trading world can seem large and confusing if you don’t have the right guidance.
The first option approval level one is for covered calls and cash-secured puts. Premium perspective both covered and cash-secured puts are equal. Cash-secured puts require you to put up 100% of the cash required to buy 100 shares at the stake price. If the buyer of the put option decides to exercise their right to sell your shares, then you are obligated to buy them at the agreed-upon strike price. The goal could be to acquire the underlying security at a discount or for the option to expire worthless. You do this by selling a put option and then having enough cash as collateral in your account in case you need to buy the shares during the assignment by the specified period. The most common way of selling a call option is through a strategy called covered calls. The goal could be to sell the underlying security at a premium or for the option to expire worthless. This is where you sell a call option against 100 shares of stock that you already own.
Level two are trades that allow day traders to actually buy options contracts and go long either calls or puts. There is no risk to the broker in these trades, as options cannot be purchased on margin, but investors can experience a total loss of their investment if the contract expires worthless. Brokers limit access to option buying level 2 to make sure traders truly understand the concept involved; such as that the value decays. Traders who are accustomed to trading simple securities may not realize the impact as opposed to traditional securities. Traders with a lot of experience in stocks and options trading are likely to get approved. Having a high-risk tolerance can also influence your eligibility.
Level options three unlocks access to options trading spreads and the margin that is necessary. Being able to margin trade means that traders can generate positions whose value goes over that of their total account, which could leave the broker to cover any difference in the case of any access loss. Spreads require you to have a complete understanding and awareness of options trading. They use different options with several ways of obtaining them. At different points in time depending on how the price of the security develops over the length of the spread.
Level option 4 is naked calls and puts; which involve the sale of short calls and short puts. These are options sold on the margin where the potential settlement cost is unlimited. Since the final settlement cost of any written option can be many times the initial premium earned, only seasoned options traders have access to the 4th option approval level. Selling a naked call and puts gives you contact with the riskiest options trading strategies. Such as strangles, naked calls and puts, and naked straddles.
To get access option approval levels with TD Ameritrade you need to request it. They will ask you a series of questions. To request different level access, you first need to login into your account; tdameritrade.com. Then locate client services which you would then click on my profile. You would then click on general and under elections and routing look for futures and click apply; it typically takes two to three business days for approval. For level one little experience is required and for level two modest options trading experience is needed. Level three can be difficult to obtain and if your request is denied you can always reapply at a later date.
Brokers look at traders’ financial condition and investing history before deciding to accept or reject an options approval request. With the MK VIP training program, I walk you through how to set up your TD Ameritrade account. So in-depth that we go over it step-by-step with your application. It is key not to let anything delay account access from the start. Once your account is set up then I teach you how to have your desktop mirror mine to ensure you have success when you are trading options. As you can see it is important to make informed options trading decisions from the start.
Summary: TD Ameritrade Options Levels
As you can see to unlock other levels it is important to have options trading knowledge. Things are constantly changing and you need to be able to stay on top of it all for your options trading success. Options involve risks not just with trade executions but having professional access differs to different levels as well. I can teach you how to day trade like the top 10% without a complicated strategy or any technical indicators, even if you are a beginner. My goal has always been to teach as many day traders to achieve their personal financial goals, whether they are novice traders or experienced traders. The MK VIP training has plenty of resources to help you get started on reaching your day trading goals.
I teach the working class how to earn $10,000 a month through day trading. I help my students avoid the challenges they face when becoming day traders. A simple thing like filling out an application might have seen minor before this article but now it’s evident how much weight it has. As of now, MK Financial LLC is already the #1-day trading coaching business in the US in just one year. After graduating from the program, I continue to give my students access to knowledge and make sure they are covered every step of the way. You may have concerns or questions and we make ourselves available to assist. We also provide continuous education by releasing articles daily on different aspects of day trading. You are just a click away from learning what you need to become a day trader and take your life and salary to the next level.
Maurice Kenny has helped over 600 people become financially free through one-on-one coaching, mentorship, and options trading strategy. Many of these new traders are now full-time traders, and they all started by watching his 1-hr webinar.
Feel free to check out other FREE educational resources to help guide you as you begin your new journey to financial freedom.
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