How much money do I need to trade call and put options on the stock market?

Question

Is there a minimum amount to get started trading stocks and options?

Answer 1

Depends on your strategy! If you are looking to invest in equities through individual stocks, etfs, index funds etc. there is no minimum. Many investment brokers offer the ability to buy fractional shares, so if you can't afford to buy 1 whole share brokers like Charles Schwab will allow you to buy fractional shares worth as little as $5. Getting into options is a different ballgame and generally higher risk and for more experienced investors. If you're buying naked calls and puts there is a minimum threshold where you have to be able to buy 1 call or put option which are sold in 100 lot increments. So purchasing 1 call option gives you the right, not the obligation, to buy 100 shares at the strike price.You can also sell the call option prior to expiration. The further out of the money you purchase the calls or puts the less capital you will have to put up initially. But you could dip your toe into options with the money to buy a drink at starbucks :)

Answer 2

Options are executed using 100 share lots. If you do covered calls, you’ll need at least 100 shares. I recommed starting out with $1,000 and adding more as your skils improve.