 Hey everyone, welcome to another video lesson from navigation trading calm in this video I want to talk to you about how to get approved for options trading permission I get a lot of questions from our members who have either a been denied certain levels of options trading permission or B, they're opening up a new account and they want to make sure How to get a specific level of permission to make the kind of trades that they want to make so to start with brokers have an obligation to create a suitability Foundation and there's a requirement to what they call in quotes know your customer And so from that perspective they are regulated to have to set some parameters on How they approve accounts and how they approve options trading permissions However, the SEC and FINRA does not say that there are specific criteria that need to be met For the broker to grant these options trading permission So it's completely on a broker by broker in a person by person situation of how they determine Which option privileges to grant you as a customer and some brokers are a little bit more strict on What they grant as far as permissions go and some are a little bit more lenient So let's jump in and I'll give you an idea of what the brokers are looking for To get you the highest options trading permission that you want to place the trades that you want in your account So to start there are really four different levels of equity options trading permissions Now again these kind of vary from broker to broker some some brokers call them tiers some call them levels But this in general is the basis of what they're looking at and so if we start with level one That's simply covered calls and cash secured puts Level two is the ability for you to buy calls and puts so you can do long calls and puts now to me This is just ridiculous from a standpoint of Buying calls and puts have a very low probability of making you money so the fact that they are basically trying to protect you from yourself is a little bit backwards in the way that they allow for Traders especially newer traders to have permission to just buy long calls and puts because if you go into that not Understanding how they work, but yet you're allowed to do it Well that that's kind of backwards from what they're trying to do which is to protect you from you But the reality is all the brokers trying to do is protect themselves Level three is where you get into having the ability to trade iron condors butterfly spreads vertical spreads basically any Defined risk type of option spread and then level four is where you're now able to trade short strangles short straddles Cell puts cell calls any uncovered or naked option Now I also included futures and futures options because this is another level of permission That you need to be granted from your broker if you want to trade futures or Options on those futures now at navigation trading we trade all of these different strategies So in our opinion It is a benefit to you to try to get proved at the highest possible level That doesn't mean you have to use it that doesn't mean you have to trade naked options That doesn't mean you have to trade futures But being able to get approved at the highest level is going to be beneficial as you scale up your account size as you scale up Your knowledge and you want to start trading these different strategies So we would suggest always applying for the highest level of permission that's available with your broker now the two preferred brokers that we use at navigation trading our TD Ameritrade the thinkorswim trading platform and Tasty works, so let's jump on to their websites And I'll give you a couple ideas of what they're looking for and some things that can help you get that permission level that you're looking for Okay, so the first broker that we'll look at is TD Ameritrade now What I did here is I just logged into my TD Ameritrade account if you go to my profile and then investor profile That's where we're at here And so to trade options and to trade the strategies that we teach at navigation trading You really want to have an investment goal of aggressive growth. And so that's what's selected here Secondary investment objective also aggressive growth now keep in mind I'm not trying to tell you how to fill out the forms and I'm certainly not telling you to be dishonest on the forms But keep in mind if you select that you are a conservative investor and you don't want to take any risk Well, then a options are probably not for you and b. You're probably not going to get approved for Advanced tier 3 or higher level permissions for trading options, especially naked options under risk tolerance We are speculative that means we are trying to make a profit on the trades that we make As far as liquidity needs more than a year, you know They want to see that you have a little bit longer time horizon before you're gonna start taking the money out or before you actually need The money and then the time horizon I have 13 or more because I'm not looking to specifically take income out of these trades right away as a rule of thumb in the Financial industry whether this is correct or not the longer you have the longer time horizon you have Theoretically the more risk you can take because you have more time before you're going to start taking income Next what are your investment? objectives for trading options again Speculation we're trying to make gains and really grow wealth and grow your account and then one of the biggest things that brokers look For is experience so we have you know bonds option stocks Good experience in all those so we want to show that we have experience and that we know what we're doing now Maybe you don't have as much experience, but you've gone through our trading courses You've gone through other courses or education that helps you understand the strategies and gives you an idea of how to trade those So that matters as far as experience and if you click on the little question mark right here It's going to bring up for example TD calls them instead of levels. They call them tears So just like I put in the initial slide covered calls is tier one Tier two standard cash is the ability to direct covered calls tier two standard margin That's the credit spreads to find risk and then tier three is advanced with naked and uncovered options So those are the key components that you need to understand for getting approved for options trading The other piece that they look at is your financial situation What's your income? What's your net worth? What are your liquid assets? The more assets that you have the better chance you have of getting approved So when you open a new account, you're going to be asked to fill out these questions Or you can also go back and update them by logging into your account clicking on my profile investor profile and Updating those as you see fit. Okay, so that's TD Ameritrade Now let's take a look at tasty works So if you log in at tastyworks.com and just go to my profile and then investor profile That's the page. We're looking at here and again a lot of this information is the same We're looking at speculation as our trading objective for trading knowledge We show stocks as extensive covered options extensive uncovered options extensive and futures extensive And then your financial standing you'll be asked to you know talk about your annual income your net worth your liquid net worth now Keep in mind again I'm not telling you to be dishonest, but you also need to realize that they have really no way of verifying this information And so the more annual income net worth liquid net worth that you can show or Answer the better chance you have of getting approved and keep in mind I've never heard of any of our members not getting approved for the works in tasty works Which is the ability to do everything TD Ameritrade and some of the other brokers are a little bit more strict as far as Allowing permission to trade some of these uncovered options and futures and that sort of thing Now it's been a long time since I've traded with any other broker besides TD Ameritrade or tasty works So each broker is a little bit different in their approval process But all the information from financials to your experience to your trading goals are all pretty much the same from broker to broker So just understand where they are coming from and the more you have the more assets the more liquid assets the more income the more experience and The higher risk of trading objective that you have gives you a higher chance of getting approved I hope that was helpful if you have any questions let us know and of course if you want to check out all the other stuff We're doing it navigation trading. Just go to navigation trading calm. See you there