How to Fund Stock Options
There are several ways to fund your stock option trading account. The easiest and most efficient way is by setting up an Automated Clearing House deposit from your checking account into your brokerage account. Automated Clearing House is a large electronic network for financial transactions such as debit and credit card processing. Other examples of ACH transactions are payroll direct deposit and vendor payments.
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Instructions
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Provide your brokerage firm information from a blank bank check. You need to have the name of your bank, its routing number and your account number. You can find the routing and account numbers along the bottom of a blank check. In most cases, you can add your bank information online when you log into your account. Alternatively, you can contact the brokerage firm and provide the information to a representative over the telephone.
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Link your checking account to your brokerage account once the banking information appears. Depending on which broker you use, the process can take a day or so for your bank account information to appear. Verify your bank info is updated.
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Schedule ACH transfers from your bank account into your stock options trading account. The money transfer can take up to three business days to show up in your brokerage account. ACH deposits are convenient and faster than writing and mailing out a paper check. A check can take up to seven business days or longer before the money shows up in your brokerage account.
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Tips & Warnings
If you are using the same bank that you used to fund the account, the bank information should already be in brokerage firm's system. An even faster way to fund your stock options account is through a wire transfer which takes a few minutes and no more than 24 hours depending on when you initiate the transfer. Your brokerage account can provide you with bank wiring instructions. You can also obtain this information online. One reason you may opt to do a wire transfer is if you receive a margin call from your broker to replenish funds in the account.
Trading stock options is risky. Consult with a financial services professional regarding the risk and rewards of various options trading strategies.
