A: First off, you need to have an account that’s cleared to trade options. You may already have this in place. If not, you can get this sorted out by answering just a few questions from your broker, but you will need about 48 hours before you can place your first trade.
Most options firms require a minimum deposit of $2,000 to $3,000 for your options account, and to get started it generally takes only the time required to get your money cleared through the broker.
If you don’t want to create a separate options trading account, then you can trade options in an existing retirement account instead. Just talk to your broker.
To take advantage of each and every V3 trade, you will need a Level 4 clearance. Levels do tend to vary broker-to-broker, however, so make sure you specify that you need to be able to place bear call spreads and bull put spreads (what Tom calls “Credit Loophole Trades”). Those are the highest-level strategies that we’ll use at V3 Trader.
Bull call spreads and bear put spreads, the “Loophole trades” that we use at V3 Trader, typically require Level 3 clearance. And our simple long calls and long puts, or “Green trades” and “Red trades,” require Level 2 clearance.
Here’s a quick breakdown of option trading privilege levels at most brokers:
If you want to take full advantage of your V3 Trader subscription, be sure to get the highest level of authorization you can. And even if you don’t receive a high enough clearance level at first, don’t give up. Sometimes all you need is a little practice to gain the level high enough to trade Credit Loopholes.