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Take a Closer Look at Options Trading

A little more knowledge goes a long way.

Why Trade Options

This type of investment has its advantages.

Option trading is a way for investors to leverage assets and control some of the risks associated with playing the market. You can use options to protect gains, control large chunks of stock or cut losses with a relatively small cash outlay.

Opportunity to speculate using leverage. This allows for strong potential returns as you can control an investment with a relatively small amount of money. Just be careful with this power, as it can also result in significant loss if your outlook is incorrect.

Flexibility with unique strategies. There’s a wide variety of option strategies that can be performed on many types of underlying securities, like stocks, Indexes and ETFs. So whether your outlook is bullish, bearish or neutral, there’s a strategy that can work in your favor if your forecast is correct.

Hedging your position. If you have an existing position in an underlying security, you can use options to lock in potential gains or minimize loss should things not go as you expected.

On the other hand, option trading can be complicated and risky, and some strategies may cause you to lose your entire investment or more. To help control some of the risks and manage cost, we don’t charge a commission to close out short options that trade for less than 5 cents. What to Know Before You Decide

Developing an Approach

There’s an options trading strategy for any skill level.

When you invest on your own, you’re in full control of your trading decisions. It’s important to think about the effects that variables like implied volatility, the price of the security or time decay will have on your strategy.

These are a few examples of option strategies provided by our in-house expert, Brian Overby, Senior Options Analyst. See all examples of options strategies

Beginner Options Strategies

Covered call graph

This graph indicates profit and loss on the Y axis, while the X axis reflects stock price at expiration. Example option A sits on the X axis. It shows the potential profit respective to the stock value when you sold the call.

Covered call

The setup

  • You own the stock
  • Sell a call, strike price A
  • Generally, the stock price will be below strike A

View covered call strategy

Protective put graph

This graph indicates profit and loss on the Y axis, while the X axis reflects stock price at expiration. Example option A sits on the X axis. It shows the potential profit respective to the stock value when you bought the put.

Protective put

The setup

  • You own the stock
  • Buy a put, strike price A
  • Generally, the stock price will be above strike A

View protective put strategy

Cash-secured put graph

This graph shows profit and loss of long stock and the short put. The Y axis is profit and loss, while the X axis reflects stock price at expiration. Example option A sits on the X axis. It shows the potential profit when the stock price is just below strike A at expiration. The dotted line along the Y axis represents potential profit and loss if the put is assigned and you buy the stock.

Cash-Secured put

The setup

  • Sell a put, strike price A
  • Keep enough cash on hand to buy the stock if the put is assigned
  • Generally, the stock price will be above strike A

View cash-secured put strategy

Get your head in the options game

Whether you're a beginner, expert trader or somewhere in between, take the time to learn all about options and find the best strategy that fits your experience, risk tolerance and goals.

View the Ally Invest Options Playbook

Intelligent Tools for the Options Investor

We’d make a good team.

Our trading platform is designed to help you make more informed investing decisions from wherever you happen to be. You have everything you need to explore opportunities, gain insight, or take action whenever the mood strikes.

Profit/loss graph

Crunch the numbers with our profit/loss calculator to understand more of a trade’s potential before placing it.

You Know a Good Opportunity When You See One

When you’re all about options, keeping costs low counts.

Standard Pricing

$4.95

+ 65¢ per contract

No account minimums.

Ally Invest Select Pricing

$3.95

+ 50¢ per contract

30+ trades per quarter or daily balance of $100,000 or more.

Options Education

An informed trader is a smarter trader.

Options Trading

Options involve risk and are not suitable for all investors. Options investors may lose the entire amount of their investment in a relatively short period of time.

Prior to buying or selling options, investors must read the Characteristics and Risks of Standardized Options brochure (17.8 MB PDF), also known as the options disclosure document. It explains in more detail the characteristics and risks of exchange traded options.

November 2012 Supplement (PDF)

You can also request a printed version by calling us at 1-855-880-2559.

About Our Commissions

Commissions and fees from published websites are current as of 2/14/2018. Some brokers may offer more competitive fees than the ones published if certain balances or levels of activity are met. You should contact your broker to confirm their commission schedule.

Ally Invest Select Pricing

We offer select pricing of $3.95 per equity trade and 50¢ per options contract for investors who make 30+ trades in the prior calendar quarter or maintain an average daily balance of $100,000 or more in the prior calendar quarter. Select pricing begins on day 1 of the first quarter of eligibility. We charge an additional 35¢ per contract on certain option index products where the exchanges charge a fee.

More details

We require a minimum opening purchase order of $100 per order in OTCBB and Pink Sheet stocks, and add 1¢ per share on the entire order for stocks priced less than $2. Maximum commission per order can’t exceed 5% of the trade value, with minimum commission of $4.95. We don’t accept opening trades for stocks below 1¢ per share.

Note for GTC orders: If we receive partial executions on different trading days you'll be charged separate commissions.

Commissions for Mutual Funds

Load

Purchases: $0 (subject to change from mutual fund)
Sale: (subject to change from mutual fund)

No Load

Purchases: $9.95
Sale: $9.95

Commissions for Bonds and CDs

Bonds

$1.00 per bond ($10.00 minimum, $250.00 maximum) per transaction

Treasuries

$1.00 per bond ($10.00 minimum, $250.00 maximum) per transaction

Certificates of Deposit (CDs)

$24.95 per transaction

Ally Invest may act as principal on any fixed-income transaction. When acting as principal, we will add a markup to any purchase, and subtract a markdown from every sale. This markup or markdown will be included in the price quoted to you and you will not be charged any commission or transaction fee for a principal trade.

Straight Talk Fees Guide

With any investing approach, high expenses can have a big impact on your returns. That's why we have affordable, competitive fees and low commissions that won't get in the way of your financial goals.

SEC
.0218 per $1,000 principal (sells only)
ORF (Options Regulatory Fee)
.0404 per contract (buys and sells)
TAF (Trading Activity Fee)
.000119 per share (equity sells)
TAF (Trading Activity Fee)
.002 per contract (option sells only)

Financial Industry Regulatory Authority (FINRA) transaction fee (TAF) This fee is charged on all stock and ETF sales at a rate of $.000119 per share with a minimum charge of $0.01 and a maximum charge of $5.95. This fee is rounded up to the nearest penny. Bonds are also subject to a TAF fee and can be charged up to $0.75 per bond traded, regardless of the bond's par value.