Use our charts to examine price history and perform technical analysis to help you decide which strike prices to choose. It's important to have a clear outlook—what you believe the market may do and when—and a firm idea of what you hope to accomplish. Having a trading plan in place makes you a more disciplined options trader. Use the Strategy Optimizer tool to quickly scan the market for potential strategy ideas based on your market outlook, target stock price, time frame, investment amount, and options approval level.

Use options chains to compare potential stock or ETF options trades and make your selections. Use the Options Analyzer tool to see potential max profits and losses, break-even levels, and probabilities for your strategy. Watch our demo to see how it works. The Options Income Backtester tool enables you to view historical returns for income-focused options trades, as compared to owning the stock alone.

Start with nine pre-defined strategies to get an overview, or run a custom backtest for any option you choose. Watch our platform demos to see how it works.

Use the Options Income Finder to screen for options income opportunities on stocks, a portfolio, or a watch list. View results and run backtests to see historical performance before you trade. Select positions and create order tickets for market, limit, stop, or other orders, and more straight from our options chains.

Ready to trade? Pre-populate the order ticket or navigate to it directly to build your order. Need some guidance? Help icons at each step provide assistance if needed. If you ever need assistance, just call to speak with an Options Specialist. Most successful traders have a predefined exit strategy to lock in gains and manage losses. This is an essential step in every options trading plan. Weigh your market outlook and time horizon for how long you want to hold the position, determine your profit target and maximum acceptable loss, and help manage risk by:.

Whether your position looks like a winner or a loser, having the ability to make adjustments from time to time gives you the power to optimize your trades.

How to do it : From the options trade ticket , use the Positions panel to add, close, or roll your positions. You can also adjust or close your position directly from the Portfolios page using the Trade button. Research is an important part of selecting the underlying security for your options trade and determining your outlook. Similar to trading stocks, use fundamental indicators to help you to identify options opportunities.

Use embedded technical indicators and chart pattern recognition to help you decide which strike prices to choose. Run reports on daily options volume or unusual activity and volatility to identify new opportunities. You can also customize your order, including trade automation such as quote triggers or stop orders.

Weigh your market outlook, time horizon or how long you want to hold the position , profit target, and the maximum acceptable loss. Consider the following to help manage risk:. It's a great place to learn the basics and beyond. Have questions or need help placing an options trade? Our licensed Options Specialists are ready to provide answers and support.

Call them anytime at Within options trading, you have several choices for how to set up a contract on Etrade. They include:. That said, you may not have access to all these options trades. Instead, Etrade will designate the types of options trades you can execute according to your tier level.

One of the significant aspects of Etrade is that they offer an Options Income Backtester so that you can see how your tentative options trade would have performed in the past. Etrade also offers an Options Analyzer and Income Finder to understand your breakeven points and options income possibilities. However, trading options is a risky endeavor for even experienced traders.

As a general rule, the longer you hold your options contract, the higher the chance it could decrease in value. On the flip side, higher risks may come with higher rewards. Factors you should consider as part of your exit plan include:. Even if you have your stop-loss or target profits set up, you still might want to adjust your position depending on how the asset performs.

The beautiful thing about options trading is that you can close your position before the contract expiration date. You can also adjust your current position to one that better suits you, depending on how the market moves.

Options can be a lucrative addition to your trading portfolio once you gain some experience and if you partner with a reputable broker. Trading options on Etrade is simple, thanks to its intuitive platform. Before applying for your Etrade margin account, we encourage you to read their disclosure from the Financial Industry Regulatory Authority FINRA. It warns you of the following items that Etrade has the legal right to do:. Getting approved for a margin account on Etrade is exciting.

However, jumping into your first trade without researching is a way to fast-track your account to liquidation. Etrade is a great place to begin your research. They offer a Stock Screener that can help you identify stocks with strong fundamentals and earnings.

Instead, do your due diligence researching the assets you want to trade options with online, getting a feel for a range of technical analysis opinions. Within options trading, you have several choices for how to set up a contract on Etrade. They include:. That said, you may not have access to all these options trades. Instead, Etrade will designate the types of options trades you can execute according to your tier level. One of the significant aspects of Etrade is that they offer an Options Income Backtester so that you can see how your tentative options trade would have performed in the past.

Etrade also offers an Options Analyzer and Income Finder to understand your breakeven points and options income possibilities. However, trading options is a risky endeavor for even experienced traders. As a general rule, the longer you hold your options contract, the higher the chance it could decrease in value.

On the flip side, higher risks may come with higher rewards. Factors you should consider as part of your exit plan include:.

Even if you have your stop-loss or target profits set up, you still might want to adjust your position depending on how the asset performs. The beautiful thing about options trading is that you can close your position before the contract expiration date.

You can also adjust your current position to one that better suits you, depending on how the market moves. Etrade offers a user-friendly platform for trading options. Their in-depth tools make it an excellent place for beginner and experienced traders alike to open options contracts. By starting slowly and building up your experience, you could soon be on your way to becoming a successful options trader on Etrade. How to Trade Options on Etrade by: THOMAS KRALOW.

Table of Contents.

Understand you don't own the underlying asset. One of the significant aspects of Etrade is that they offer an Options Income Backtester so that you can see how your tentative options trade would have performed in the past. The CBOE uses the European style, and options can only be exercised on the last business day prior to the date of expiry. Look at the New York Stock Exchange's advance-decline breadth indicator, the Arm's Index and the Trader's Short-Term Index when examining market movement over time. Factors you should consider as part of your exit plan include:. More resources to help you get started. There are many online trading courses available.

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