Option Levels at E*TRADE
In this article, we’ll cover:
• E*TRADE customers can choose from four option levels.
• Either a hard-copy form or an online form can be used to upgrade an account’s options level.
• Webull can be an alternative to E*TRADE for options trading.
Overview of Option Levels at E*TRADE
E*TRADE offers 4 option levels. They are simply called Level 1, 2, 3, and 4.
Level 1 includes covered calls and buy-writes. Level 2 includes everything in Level 1 plus additional strategies, such as long calls, long puts, long straddles, long strangles, married puts, cash-secured puts, and collars. Level 3 includes everything in Level 2 plus debit spreads, credit spreads, calendar spreads, diagonal spreads, butterflies, condors, iron butterflies, iron condors, and naked puts. Level 4 includes everything in Level 3 plus naked calls.
Eligibility
Margin is required to add Level 3 or 4 to an account, and margin itself requires at least $2,000 in account equity. E*TRADE also requires at least $5,000 in margin equity to place naked equity call or put trades. E*TRADE does offer limited margin for IRAs, and IRAs are eligible for Level 3 at E*TRADE.
Applying for Options
The easiest way to apply for one of E*TRADE’s option levels is to request it during the initial account application, which can be completed on the broker’s website or mobile app.
Existing account holders can log into the website and submit a digital application for options (or for margin). The place to start is the Forms & Applications page.
On the Forms & Applications page, there are several PDF and online forms for many different account functions. Scroll down to the section for adding features to an account. There, you’ll find both digital and PDF forms to add options trading to an account. An IRA has its own separate forms, so be sure to use one of those (digital or PDF) if you’re trying to add options privileges to a retirement account.
For obvious reasons, the most convenient method is the online form. If you want to use a hard-copy form, here are the two forms for taxable and retirement accounts:
Options application for taxable accounts
Options application for retirement accounts
It is not possible to downgrade an options level on an account with the online form. And remember that any application is subject to approval.
Learning How to Trade Options
After getting options approval, it’s time to learn more about derivatives before actually trading them. E*TRADE has an options education section with information on strategy levels, platform tools, and general options concepts.
Trading Options
Speaking of software tools, E*TRADE has several useful tools for trading options. There are option chains, probability tools, analyzers, scanners, and other resources that can help you evaluate and place trades. These tools can be found in the broker’s options section and on its trading platforms.
E*TRADE has no base commission on options trades, although there is a 65¢ per-contract fee. Clients who place 30 or more stock, ETF, or options trades per quarter qualify for a reduced rate of 50¢ per contract.
Webull as a Fallback
If E*TRADE’s options pricing causes you to hesitate, there is always Webull.
Webull charges $0 commissions on stock and ETF options trades, although certain index options and oversized option orders can still carry per-contract fees, so cost-conscious traders may still want to take a look.
Like E*TRADE, Webull has four option levels that are cumulative, meaning the strategies in a lower level are included in the next one. There are some important differences between E*TRADE’s and Webull’s levels, however. Cash-secured puts, for example, are on Level 1 at Webull but on Level 2 at E*TRADE. Webull’s Level 4 includes naked equity calls, naked equity puts, naked index calls, naked index puts, and front ratio spreads.
Webull customers get some useful options tools. For example, a price ladder can be used to place a trade for an individual contract. On the broker’s mobile app and desktop program, there are integrated spreads. Nevertheless, Webull’s software for derivatives tends to lag behind E*TRADE’s.
Webull traders also get some educational materials for options. These resources can be found in the broker’s Learn section. There, users can find articles on strategies such as diagonal spreads, covered strangles, and short puts.
Webull customers can use the broker’s website, desktop platform, or mobile app to apply for options trading. To do this on the mobile app, tap the Webull logo in the bottom center, then tap Account Management in the upper-right corner, choose the account, and tap Option Trading Level. Follow the on-screen prompts from there.
On the website, go to My Account. Under My Account, select the applicable account and click Manage My Account. In the Trading Privileges section, click View Details next to Options Trading.
Free Webull Account
Open Webull Account
Updated on 4/22/2026.
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