Basic Options Trading Help

Get the symbol, quote, and enter your option order from one single screen. Here is what you need to know to enter an order.

 
 
 

1 Action

Buy to Open - Buys an option and adds a long position to your account.

Sell to Close - Offsets an existing long position (ie. long put or call position) that was created by buying to open.

Sell to Open - Sells an option and adds a short position; This is also known as writing an option contract.

Buy to Close - Offsets an existing short position that was created by selling to open.

2 Contracts

Place the number of options contracts you wish to purchase or sell in this box. An option contract ordinarily represents 100 shares of the underlying stock or has a multiplier of 100 for Index options. However, some options may represent more than 100 shares. TradeKing chains identify these odd options by displaying them in red font.

3 Symbol

Enter the symbol of option you are trading. Note the required format: the root, a space, and the last two letters. If you don't know the symbol for the option it can easily be found by entering the underlying securities symbol in the "Find Option Symbol" field and then clicking the find button. Just like this...

 
 
 

4 Price

Market: We will execute the order at the best price currently available. Risks: We are required to execute a market order fully and promptly without regard to price. While a customer may receive a prompt execution of a market order, the execution may be at a price significantly different from the current quoted price of that security.

Limit: An order to buy a specified quantity of a security at or below a specified price, or to sell it at or above a specified price (limit). This ensures that you will not pay more than the limit you specified. Risks: Order will be executed only at a specified price or better. While you receive price protection, the order may not be executed.

Stop: A market order to buy or sell a certain quantity of a certain security if a specified price (the stop price) is reached or passed. Risks: As soon as the stop price is reached the order will be sent to the market to be executed "at market". The execution might be at a price significantly lower than the stop price, or than the current quoted price.

Stop Limit: An order to buy or sell at a specified price or better, but only after a "stop" price has been reached. A stop-limit order is essentially a combination of a stop order and a limit order. Risks: Stop limit orders become limit orders when the stop price is reached or passed in the marketplace. Once the stop price has been reached or passed, the stop limit order may not be executed because limit orders will be executed only at a specified price or better.

5 Duration

Set the amount of time an order will remain open:

Day: automatically expires if it is not executed during that trading session.

GTC (Good 'Til Canceled): remains open until it is either executed or canceled. Please note that a "market" order can on only be a Day order.

Advanced Orders

 
TradeKing now offers two types of advanced orders: One Triggers Other and Trailing Stops. Both types of orders are "contingency orders", that is, they depend on an independent contingency to be triggered and sent to the market for execution. Use these orders with caution and make sure you understand how they work before you start using them. We have created guides that explain how they work:
 
 
Click here to view the guide to One Trigger Other orders
Click here to view the guide to Trailing Stops