Choices trading can be intricate much more so than stock trading. When you buy a stock, you just decide how many shares you desire, and your broker fills the order at the dominating market rate or a limitation price you set. Trading options needs an understanding of advanced techniques, and the process for opening an alternatives trading account includes a few more actions than opening a typical investment account.
( Required to review puts, calls, strike costs and other choices trading lingo? See our post on choices trading 101). Compared to opening a brokerage account for stock trading, opening an alternatives trading account requires bigger amounts of capital. And, given the intricacy of predicting several moving parts, brokers need to know a bit more about a prospective investor before awarding them a consent slip to start trading options.