Option Agreement

All new option accounts must be approved by the registered option and security futures principal prior to the first option trade. An option investor must sign and return the option agreement within 15 days of the account’s approval to trade options. If the investor fails to return the option agreement within 15 days, no new option positions may be opened and the investor will be limited to closing transactions only until the option agreement is signed and returned. By signing the option agreement, the customer agrees to notify the firm of any significant change in their finances and the customer:

Agrees to abide by all OCC and exchange rules

Acknowledges that they have received and read the OCC risk disclosure document

Understands any long options in the money by 1 cent or more at expiration will result in automatic exercise for the customer

Understands payment, exercise and assignment terms

 

OPTION ACCOUNT SUPERVISION

Related Articles
  1. Trading

    Trading Options on Futures Contracts

    Futures contracts are available for all sorts of financial products, from equity indexes to precious metals. Trading options based on futures means buying call or put options based on the direction ...
  2. Trading

    Exploring European Options

    The ability to exercise only on the expiration date is what sets these options apart.
  3. Trading

    Options Pricing

    Options are valued in a variety of different ways. Learn about how options are priced with this tutorial.
  4. Trading

    A Newbie's Guide to Reading an Options Chain

    Learning to understand the language of options chains will help you become a more effective options trader.
  5. Trading

    Stock Options: What's Price Got To Do With It?

    A thorough understanding of risk is essential in options trading. So is knowing the factors that affect option price.
  6. Trading

    How to Make Money by Trading Index Options

    Index options are less volatile and more liquid than regular options. Understand how to trade index options with this simple introduction.
Frequently Asked Questions
  1. How do you Fund a Forex Account?

    Global currencies are traded on the forex market. Here's how to tap in.
  2. How a bond's face value differs from its price

    Discover how bonds are traded as investment securities and understand the various terms used in bond trading, including par ...
  3. What does CHIPS UID mean?

    Learn what CHIPS UID stands for and how it facilitates the transfer of funds as the back-end of the ACH network for both ...
  4. What does the de Minimis clause for investment advisers mean?

    Learn the answer to what the de Minimis clause for investment advisers means.
Trading Center