Lesson 15: Options approval and placing a trade
Learn what steps you need to take to add option trading privileges to your Investor's Edge account.
CIBC Investor's Edge
2-minute read
Add options trading privileges by following these steps:
1) Fill out the Margin/Options Application Form Opens in a new window.. You’ll need to answer some questions about your knowledge of options and trading strategies, as well as your general investing experience. We’ll also ask you to acknowledge that you accept the risks of options trading.
2) You can trade options in both regular investment accounts and registered accounts like RRSPs and TFSAs. In regular investment accounts, you’ll need to be approved for trading on margin.
3) Not all investors are allowed to trade every kind of strategy, since some strategies involve substantial risk. Your approval level will generally be based on the information you provide us about your financial situation, options knowledge and experience.
If you need help, contact us.
Here’s the information you’ll need to input to execute an options trade:
- The account you want to trade in
- Which stock, index or other security you want to trade options on
- Whether you want a call option or a put option
- Whether you want to buy or sell the option
- The number of contracts you want to trade
- The strike price of your option
- The expiry date of your option
- How you specify the price you’ll pay if you’re buying or receive if you’re selling. Do you want a:
- Market order: The best price available at the moment you submit the order.
- Limit order: You specify the price you’re willing to pay or receive. Trading tip — limit orders are often encouraged in periods of volatility or if the bid-ask spread is very large. This is done to avoid either overpaying for your option or selling at a price that's less than ideal.
- How long you want your order to stay active
- Which account you’ll use to pay for the trade. If you trade on a U.S. exchange and you pay from a Canadian dollar account, a currency conversion will take place — the same applies for Canadian trades paid for from U.S. dollar accounts. You’ll receive a message letting you know this.
