Placing Option Orders
To find the Option Order Entry page, click the Trade tab at the top of your account and then choose Options from the left navigation menu.
Placing an Order
- Type the symbol of the underlying security in the Symbol field.
- Use the Find Symbol link below the Symbol Field to look up the trading symbol of the company you want to trade.
- Use the Options Chain link to view all available option contracts and associated quotes for that trading symbol. A Trade button on the option chain will allow you to easily send any contract you select to the order entry screen.
2. In the Buy/Sell field, choose whether you want to Buy to Open, Buy to Close, Sell to Open or Sell to Close.
- Buy to open is used to buy a contract to establish a new position.
- Sell to close is used to sell an existing position to exit that contract.
- Sell to open is used to sell a contract to establish a new position. A Covered Call is an example of a time when you would sell to open an option contract.
- Buy to close is used to close an existing short position to exit that contract. This action would be used to close out a covered call position.
3. The Expiration field allows for the selection of available contract expirations dates. Expirations can be selected from a drop-down menu or from a calendar view.
4. The next two fields are Strike and Call/Put. Use these to choose the strike price and type of option contract. Available strike prices will vary depending on expiration series.
*Note to ease order entry, the Buy/Sell, Expiration, Strike Price, and Call/Put fields are populated by default once an underlying symbol is entered. Selections within these fields are not available until an underlying stock symbol is added.
5. In the Quantity field, type the number of contracts you want to purchase. Keep in mind that option contracts have a standard multiplier of 100. This means that if you type "1" in the Contracts field, your contract will be on 100 shares of the underlying security.
6. Next, choose your Order Type. Your choices are Market, Limit, Stop and Stop-Limit. If you select Limit or Stop, a field will appear below the Order Type drop-down menu so you can enter your price. If you choose Stop-Limit, you will be able to enter both a stop price and a limit price. For more information about what these order types mean, visit the Basic Orders section of the Knowledge Center.
7. Choose your order duration. Today orders are good for the current day's trading session and will be canceled at market close if not filled. Good ‘til Date (GTD) orders allow you to select a date and time at which your order will be canceled if it hasn't been filled. Good ‘til Canceled (GTC) orders are automatically canceled on the last day of the month following order entry. For example, all GTC orders placed during January will be automatically canceled at the end of February.
8. An optional All or None Qualifier can be added to the order. All or None means that unless all the shares in your order can be filled in its entirety at the same time, it will not be filled at all.
Reviewing Your Order
When you've completed the Option Order Entry page, click Review Order to check your order. Once you've confirmed that all your order details are correct, click Place Trade.
Options involve risk and are not suitable for all investors. Detailed information on our policies and the risks associated with options can be found in the Scottrade Options Application and Agreement, Brokerage Account Agreement, and by downloading the Characteristics and Risks of Standardized Options and Supplements (PDF) from The Options Clearing Corporation, or by requesting a copy from your local branch office. Market volatility, volume, and system availability may impact account access and trade execution. Supporting documentation for any claims will be supplied upon request. Consult with your tax advisor for information on how taxes may affect the outcome of these strategies. Keep in mind profit will be reduced or loss worsened, as applicable, by the deduction of commissions and fees. The covered call option strategy may help generate income and offer limited downside protection, but does not provide full downside protection and may limit profit potential.
There are special risks associated with uncovered option writing that may expose investors to significant losses. Therefore, this type of strategy may not be suitable for all customers approved for options transactions.