How to Create a Free Options Trading Account

Trading options online can be a lucrative way to earn income, or doing so can be a quick way to lose money. Selecting an online vehicle for options trading should include an established brokerage firm offering a trading platform with real time access to the five main options exchanges. The company should also offer the ability to trade stocks, futures and options within the same account. Creating a free options trading account with a reputable broker is a simple process. That's true once you find the right brokerage firm for you.

Instructions

1. Choose a brokerage firm that offers a free options trading account for its customers. Absolute-Futures and Noble Trading are two reputable choices for your options trading platform. Links for both brokerage firms are in the Resources section.

2. Go to the web address of the firm you select for your trading platform. Click "Open an Account," and you will be directed to complete a series of online forms. You may also need to download a PDF version of the forms. If this is the case, you will need the free Adobe reader (see Resources).

3. Fill in your information in the online forms. Different brokerage firms have different processes, but you will likely be able to submit your completed application from within the Website of the options trading firm. Risk disclosure statements, customer agreements, subordination notices, and online service agreements are some of the particulars you will need to read thoroughly as you create your free options trading account. Your options trading account is similar to a bank account, but you can buy and sell options from within your broker's trading platform.

4. Print the signature page as instructed. Sign it and fax it to the brokerage firm along with a copy of your driver's license, passport or other identification document as outlined in the company's specifications. This is in compliance with the U.S. Patriot Act. US citizens will also need to fax in a W-9 form for tax purposes. Non-U.S. citizens will be required to complete a W-8 form.

5. Fund your account in one of the ways offered by your options brokerage firm. Bank wires, checks and account transfers are the most commonly offered methods of account funding. Once your account is funded, begin trading by logging into your account, opening the trading platform and choosing options trades to buy or sell.

Tips & Warnings

• Visit options trading forums to find out what users are saying about the different brokerage firms.

• Never trade options with money you cannot afford to lose.

Resources

• Noble Trading
• Absolute Futures
• Introduction to Options Trading
• Adobe Reader