Trading with Options

Exercise leverage and work to manage risk with options

Options trading gives you the opportunity to buy or sell a particular asset at a specific price within a set period of time. You can use options to pursue objectives such as managing risk, generating income and increasing your buying power. Options carry a high level of risk and may not be suitable for all investors.
May be a good move for...
  • Managing risk
  • Generating income
  • Downside protection
  • Leveraged buying
  • Experienced investors only
Tab One

Simplified strategies to help you invest with confidence

At Merrill Edge®, we understand that one of the keys to successful options trading is access to timely information that's both insightful and reliable. That's why we created powerful tools and combined them with access to award-winning research.1
 
Why Merrill Edge for options?
  • Options Strategy Builder to help you pick a stock and generate options trade ideas
  • Powerful screeners to search for options from your portfolio or watchlist
  • Independent research and insights specific to options from BofA Merrill Lynch Global Research
  • Options chains allow you to quickly find calls and puts to trade
  • Standard, mini and jumbo options are available
  • Stock profiles at-a-glance by open, previous close, 52-week high/low and more
  • Advanced charting by time frame, comparison features, technical indicators and more
  • Customizable alerts based on price and volume changes, ratings changes, news and more
  • Options education to help you trade with more confidence
 
6.95 per online equity trade
 
Merrill Edge MarketPro for active investors
Are you an active investor?
Get more insights, more capabilities and more control with Merrill Edge MarketPro®,4
 
Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options. Please read the options disclosure document titled "Characteristics and Risks of Standardized Options" before considering any option transaction. A separate client agreement is needed. Please note that you will also need to be pre-approved prior to implementing this strategy. You should consult a qualified tax advisor as to how trading options may affect your tax situation.
Tab Two

Execute your options orders with ease

A stock option is a contract that gives one party the right to purchase or sell a stated number of shares of a stock at a specified price. The price at which the shares may be purchased or sold is known as the strike or exercise price. The right to exercise lasts for a stated period of time, which may be months or years, until the expiration date. The option expires if it is not exercised on or before the expiration date. Trading options offers potential advantages and risks.
 
Whatever your outlook, from bullish to neutral to bearish, Merrill Edge can help you apply your strategy. Whether you think that the price of a stock will rise or fall, you'll need access to the right tools and research to help you implement your trading ideas.
 
Bullish outlook
  • Long calls
  • Uncovered puts
  • Covered calls
  • Married puts
  • Bull call spreads
  • Bull put spreads
Neutral outlook
  • Straddles
  • Strangles
Bearish outlook
  • Long puts
  • Uncovered calls
  • Bear call spreads
  • Bear put spreads
Standard, mini and jumbo options let you trade contracts that are the right size for you. Mini options let you trade options on higher-priced equities in blocks of 10 shares rather than 100.
Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options. Please read the options disclosure document titled "Characteristics and Risks of Standardized Options" before considering any option transaction. A separate client agreement is needed. Please note that you will also need to be pre-approved prior to implementing this strategy. You should consult a qualified tax advisor as to how trading options may affect your tax situation.
 
Tab Three

Getting started is as easy as 1-2-3

1
Open your account
Apply online and open your account in minutes. Be sure to fill out the separate client agreement to apply for options trading privileges. Here's what you'll need.

If you need help, give us call at 1.888.637.3343—24 hours a day, 7 days a week.
 
2
Fund in one of four ways
Fund your account instantly in real time from your eligible linked Bank of America bank account. Or, transfer funds to your account by check, by wire transfer, or by transferring or rolling over an existing account.6 Learn how to fund your account.
 
3
Start investing
  • Use the Options Strategy Builder to quickly identify option strategies that match your risk tolerance, outlook and goals for eligible securities in your portfolio and watchlists
  • Provided your options trading privileges are approved, start your search for the right contract with our powerful options screener
  • Use our options chains to search available option contracts for a particular optionable security. Clear, interactive listings include all the put and call option contract details such as strike prices, premiums, open interest and volume
 
Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options. Please read the options disclosure document titled "Characteristics and Risks of Standardized Options" before considering any option transaction. A separate client agreement is needed. Please note that you will also need to be pre-approved prior to implementing this strategy. You should consult a qualified tax advisor as to how trading options may affect your tax situation.
Looking for investment advice?
Pursue your financial goals with advice and guidance from a licensed Merrill Edge Financial Solutions Advisor™—and ask about getting your own Merrill Edge Roadmap® to help you make a plan and stay on track.7
Tab Four

Simple flat-rate pricing

Saving more on every trade is easy with Merrill Edge. Compare and you'll see we offer some of the lowest online pricing in the industry—lower than Schwab, Fidelity and E*Trade.5 Learn how to qualify for $0 trades.3
Our everyday price comparison5
E Trade logo
$9.99a
TD Ameritrade logo
$9.95b
Charles Schwab logo
$8.95c
Fidelity logo
$7.95d
Merrill Edge MarketPro for active investors
Are you an active investor?
Get more insights, more capabilities and more control with Merrill Edge MarketPro®,4
Ready to get started?
1.888.637.3343
Call 24 hours a day, 7 days a week
$600 account offer
Get up to $600 when you enroll, open and fund a new Merrill Edge investment account or IRA.
1 Institutional Investor magazine announced BofA Merrill Lynch Global Research as the Top Global Research Firm for 2011, 2012, 2013 and 2014, based on surveys held throughout the year. The magazine creates rankings of the top research analysts in a wide variety of specializations, drawn from the choices of portfolio managers and other investment professionals at more than 1,000 firms. For more information about this award, go to www.institutionalinvestor.com/TopGlobalResearch2014.

2 Other management and transaction fees may apply. In addition to your stock, ETF or option commission sell orders may also be subject to a transaction fee (of between $0.01 to $0.03 per $1,000 of principal). If applicable, this fee appears under "Transaction Fee" on a Trade Confirmation. Your stock or ETF commissions sell orders may also be subject to a fractional share liquidation fee of 10% of proceeds. There are other fees associated with investing in ETFs, Read the "Expenses & Charges" sections of the prospectus to find out what they are. Contact us to obtain a prospectus.

3 $0 trades are only available with an individual or joint Merrill Edge self-directed brokerage account. When placing a trade, Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S) determines whether you meet the balance or relationship requirements to qualify that trade for the $0 waiver. To determine the number of qualifying trades, MLPF&S adds the qualifying trades in your individual accounts and joint accounts. Commission fees apply when qualification requirements are not met, or when you exceed the number of qualifying trades a month. Brokerage fees associated with, but not limited to, margin transactions, option trading, special stock registration/gifting, account transfer and processing, research request and termination apply.
a) Commissions are waived for 30 online equity trades each month including stock and exchange traded funds (ETFs) on behalf of MLPF&S, for customers who meet any one of the following criteria:
i) Combined total of $25,000 or more in your deposit accounts at Bank of America, N.A. MLPF&S adds the average collected balances in your deposit accounts as of the prior month to the balances in your bank CD and IRAs as of the prior business day. Bank deposit accounts with the same Social Security number (SSN) as the SSN(s) on the self-directed brokerage account are systematically included in the balance determination. Standard deposit account fees apply.

ii) Or combined balance of $25,000 or more in cash balances in one or more of the following sweep options in your Merrill Edge self-directed account(s) as of the prior business day:
- Bank Deposit Accounts sweep option with your Cash Management Account® (CMA®)
- Retirement Assets Savings Program II sweep with your IRA

iii) Or Platinum Privileges clients.

iv) Or Preferred Rewards Platinum clients.

b) Commissions are waived for 100 online equity trades each month, including stock and ETFs, on behalf of MLPF&S, for Preferred Rewards Platinum Honors clients.

This offer does not apply to Business/Corporate Accounts, Investment Club Accounts, Partnership Accounts and certain fiduciary accounts held at MLPF&S. Other fees and restrictions may apply. Relationship requirements and pricing are subject to change and/or termination without advance notice. To learn about additional ways to qualify for $0 trades, call 1.888.MER.EDGE (1.888.637.3343) or visit merrilledge.com/pricing.

4 Merrill Edge MarketPro® is available to clients who maintain a Merrill Edge self-directed relationship. To qualify, you must maintain total combined balances of $50,000 or more in your Merrill Edge and Merrill Lynch investment accounts and Bank of America, N.A. deposit accounts, or make at least 15 self-directed trades per quarter. Platinum Privileges, Preferred Rewards Platinum or Preferred Rewards Platinum Honors also qualify. Not available to investment professionals or for trust accounts and business accounts. Relationship requirements and pricing are subject to change. To learn more go to merrilledge.com/marketpro.

5 Comparison table data based on pricing as of 01/15/2015 and excludes special promotional offerings.
a E*TRADE's standard online price for equity, ETF or option trade is $9.99, $7.99 for customers who trade at least 150 times per quarter, $6.99 for customers who trade 1,500+ times per quarter
b For TD Ameritrade ETFs: the ETF must be on list of 100+ commission-free ETFs and must be held for a minimum of 30 days in order to not incur a fee. Also, the user must be enrolled to qualify.
c Price per non-Schwab ETF
d Price per non-iShare ETF

6 You have choices for what to do with your employer sponsored retirement plan. Depending on your financial circumstances, needs and goals, you may choose to roll over to an IRA or convert to a Roth, roll over to an employer sponsored plan from a prior employer to an employer sponsored plan at your new employer, take a distribution or leave the account where it is. Each choice may offer different investment options and services, fees and expenses, withdrawal options, required minimum distributions, tax treatment and provide different protection from creditors and legal judgments. These are complex choices and should be considered with care. Visit http://www.merrilledge.com/retirement/rollover-ira or call a Merrill Edge rollover specialist at 1.888.637.3343 for additional information about your choices.

7 Merrill Edge Roadmap® is available with a Merrill Edge Advisory Center™ account

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