Options are contracts that give you the right to buy or sell a stock at a fixed price, called the strike, before an expiration date. You can use options to trade the direction of a stock, hedge a position you already hold, or generate income with shares or cash you already have.

For example, you can open a position expecting a stock's price to rise, paying only a fraction of what it would cost to buy the shares directly. You can also protect a stock you already own by opening a position that limits your loss if the price drops, or commit to selling shares you already own at a price you choose in exchange for a premium today.

To trade options, you need to request access first. Open any stock's detail page and tap "Request access to Options," or find the option from the contract search.

Trading levels

Based on your investment profile, you get one of two trading levels.

• Level 1 lets you sell covered calls and cash-secured puts, strategies backed by your own shares or cash.
• Level 2 includes everything in Level 1, plus buying calls and puts.

Your level comes from a short questionnaire that takes about 2 minutes. It covers your income, net worth, investing experience, risk tolerance, and goals. At the end, you accept the Options Trading Agreement and review the OCC Disclosure Document.

Optional lessons

Before or after your approval, you can review the Options lessons inside the app. Completing them is optional. It doesn't change your access level or speed up your approval, it just helps you understand how options work before you trade.