Options Trading Help Center

Discover how options work, understand the risks involved, and learn how to trade options confidently with Longbridge.

1. Overview of Options Trading

Options are financial contracts that give you the right, but not the obligation, to buy or sell an underlying asset (like a stock or ETF) at a specific price before a certain date. Options can be used to manage risk, generate income, or speculate on price movement.

We support Options Trading up to Level 2:

  • Level 1: Covered Calls, Protective Puts
  • Level 2: Buying Calls and Puts

We do not support complex strategies such as spreads, straddles, or naked short options.

2. Option Basics

  • Call Option: Right to buy the underlying asset at the strike price before expiration.
  • Put Option: Right to sell the underlying asset at the strike price before expiration.
  • Strike Price: The agreed price for the transaction.
  • Expiration Date: The last day the option can be exercised.
  • Premium: The cost to buy the option, paid upfront.

3. Benefits and Risks

Benefits:

  • Leverage: Control more shares with less capital.
  • Flexibility: Profit from both upward and downward movements.
  • Risk Management: Hedge against losses in stock positions.

Risks:

  • Potential for Total Loss: Entire premium can be lost if option expires worthless.
  • Time Decay: Options lose value as expiration approaches.
  • Volatility Risk: Market volatility can affect pricing.

*** Options are not suitable for all investors. Understand the risks before trading.

4. Approval Levels

To trade options, you must apply for approval. Approval is based on your experience, financial profile, and risk tolerance.

Level 1 – Covered Calls & Protective Puts:

  • Covered Call: Sell a call against stock you already own.
  • Protective Put: Buy a put to hedge a stock position.

Level 2 – Buying Calls & Buying Puts:

  • Buy Call: Bullish strategy.
  • Buy Put: Bearish strategy.

We do not offer: naked short options, vertical spreads, straddles, strangles, or multi-leg strategies.

5. Placing an Options Trade

  1. Search for the underlying asset.
  2. Open the options chain.
  3. Select expiration date and strike price.
  4. Choose order type (Market, Limit).
  5. Confirm order details and submit.

6. Trading Hours for Options

  • Regular Market: 9:30 AM – 4:00 PM ET
  • Options cannot be traded in pre-market or after-hours sessions.
  • Crypto options are not available.