What is the difference between Level 1 and Level 2 option trading?

Based on the information you provided in your options application, ShareBuilder will assign an options trading level to your account.

Level 1
Typically, if you are new to options trading, you will be assigned to Level 1 trading. A Level 1 options trader has the ability to access and place options trades from the Covered Calls tab in the Options Trading section. From this page, you can:

• Write a Covered Call
• Close a Covered Call
• Perform a Buy / Write (Buy a stock position and write a covered call)
• Perform an Unwind (Close a covered call and sell a stock position)

Level 2
Level 2 options traders have the ability to access both the Covered Calls and Buy / Sell Options tab in the Options Trading section. Level 2 trading is geared towards more experienced options traders, and allows you to:

• Buy a call (to open)
• Buy a put (to open)
• Sell a call (to close)
• Sell a put (to close)

Please note: Options involve risk and are not suitable for all investors. Before investing in options, please read the Characteristics and Risks of Standardized Options.