Margin requirements for options vary according to the option strategy.
Questrade has four approval levels for option trading:
- Level 1: Long calls and long puts
- Level 2: Covered calls and covered puts
- Level 3: Spreads
- Level 4: Short straddles, strangles and combinations, and uncovered naked equity and index options
To change your option level log into
myQuestrade, select
My Accounts and click
Update an Option Level. Registered accounts, including TFSAs, can be approved to buy puts and calls and write covered calls.
To place a spread order please contact the trade desk at 1.888.783.7866 (when prompted press 2) or call 1.866.980.9590. The trade desk is available Monday to Friday, 8:30 a.m. to 4:30 p.m. EST.
|
APPROVAL LEVEL |
STRATEGY |
OPTIONS MARGIN REQUIREMENT* |
|
Level 1 |
Long calls and long puts |
Minimum $1,000 equity required
100% of the option value (net cost of the trade). |
|
Level 2 |
Covered calls and covered puts |
Minimum $1,000 equity required
For covered calls:
The normal margin required on the underlying interest
PLUS
The amount (if any) the market value of the underlying interest exceeds the exercise
value of the call option.
For covered puts:
The greater of:
The normal margin required on the underlying interest.
OR
130% x the exercise value of the put options.
|
|
Level 3 |
Spreads |
Minimum $5,000 equity required
The lesser of:
A) The margin required on the short option
OR
B) The loss amount (if any) that would result if either option were exercised and/or
expired.
|
|
Level 4 |
Short straddles, strangles & combinations |
Minimum $25,000 equity required
Margin required shall be the greater of:
A) The margin required on the short call
OR
B) The margin required on the short put
PLUS
The amount (if any) the side with the lower margin requirements is in-the-money.
|
|
Uncovered (naked) equity options |
100% of the market value of the premium
PLUS
the greater of:
i) 30% x the underlying interest less the amount the option is out-of-the-money
(if any)
OR
For options listed on a recognized Canadian exchange:
ii) 5% of the market value of underlying stock.
AND
For options listed on a recognized US exchange:
i) 10% of the market value of the underlying stock for calls
OR
ii) 10% of the exercise value of the put option.
|
|
Uncovered (naked) index options |
Index options are cash settled and generally, a European style expiry. A European
style option can only be exercised on expiry.
Care must be taken when trading these products given the added risk present.
100% of the market value of the premium
PLUS
The greater of:
For options listed on a recognized Canadian exchange:
i) 5% x the underlying interest less the amount the option is out-of-the-money (if
any)
OR
ii) 2% x the market value of the underlying stock.
|
For options listed on a recognized US exchange:
i) 15% x the underlying interest less the amount the option is out-of-the-money
(if any)
OR
ii) 10% of the market value of the underlying stock for calls or 10% of the exercise
value of the put option.
|
|
*Questrade retains the right to require additional margin above the afore-mentioned
as necessary without further notice.
|