A step-by-step guide on how to trade Options on Etrade and Power Etrade Platform! Learn how to set put and call options!
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In today’s video we will be going over the Power Etrade platform , and how to Buy and Sell stocks and set call and put options easily.
Finally we are done with the Etrade interface and how to create and fund an account, and how to buy and sell assets so it is time to have a look on their trading platform, Power ETRADE.
I have opened a paper trade account which is a demo account that will allow us to perform trades without using actual funds, as this is a tutorial video.
Once you log in for the first time you land in a page like this, now I see the SSPDR S&P 500 ETF, but I would like to change to a stock that you are all familiar with and this is nothing other than Apple, so lets bring apple, you can se the search box on the top left side to locate the stock you want.
Starting form the right side, we have the equity of our account which is 100K , that is our buying power, no gain or loss today as we preformed no trades, no open positions or anything like that,
On the top bar you have quote which gives you information about the apple stock, open price, high and low of the day, close price of the previous day and a 52 week price. On the left side of that box you can see the Bid and ask price as well as the volume of the day.
Then we have a small chart which can go from 5 days to 1 year, and next to it the fundamentals, such as market cap, sector, industry, Beta and the 10 day average volume.
Bellow that the Earning with the next earnings date to be the 10/27 of 2022, price to earning ration which is 24.03 which is considered good, and info about Dividends.
Then we have news which is the latest news concerning apple and trust me when we are talking about such a massive company the news you can get in a day gets a bit overwhelming. Trend watch and social sentiment, which I don’t really pay attention to but many other do and last the book of trades and depth view.
Were all the action happens is in the quick trade boxes were you can buy or sell market, And this happens because on Power ETrade paper trading account the Margin account is already activated.
So If I want to buy 10 socks of apple at market price I will click buy and then on the pop up window I will see an overview of my order and click send if agree with. Now as you see on the left side those oxes have been populated and I have a total loss of about 30-50 cents.
All the interface is customizable, and I will show how you how to make changes after we finish the navigation of what can be found and were.
Moving on to the chart, and then options. If you recall when we talked about options earlier here you can see a much better outlook on how to trade options, because you have a wider look on prices.
On the top you can pick the expiration date for your puts or calls. For that I will pick January 23, which is 105 days from now. IF I believe that the market will continue its downtrend, which I must say its quite lively to happen I want to buy puts on apple.
So the current price today is at 141, so I would liek to buy put with expiration date of January 23. To buy 1 put on apple with a strike price of 140$ and an expiration on january23, I will need to pay 9.9$ per share or 990$. Lets do it.
My order was placed!
Basically I bet that apple will decline below 140, so if that happened I will be able to buy apple at a price that is below 140 and sell it for 140 between now and January 23. Truth is I have no intention of buying the actual stock but just selling my options at a much better price than I bought them. For that to happen Apple needs to go below 140 in the next 103 days.
Let’s do the same with another stock, lets pick Tesla.
Tesla is trading at 227, I would love to set some puts on that price so again my expiration date will be January 23, and I want to set a put order that Tesla will be below the price of 226.77. Now that put option is quite expensive and it’s currently trading at 29.60 per share or 2960$ . That’s most likely because the market anticipates that the stock will go lower. So to place the order lets follow the same practice.
Our order got filled and now on the positions tab we can see our orders. Apple I have multiple since I bought 10 and I also have set puts and I have set some puts on tesla as well.
As you can see since both stocks are on a decline at the moment the puts are working greatly.
Now you may wonder how we sell on this platform. Well this is quite easy, click on the order , we will do the 10 apple stocks, and you will get a pop up with the changes and your p&L. Click trade then sale 10 stocks and you have sold the stock you just bought.
With Tesla continuing to crash and with 2 options at the moment you can see the today net gain shoot up fast. So how do you close an option and get the profits?
Well once more click on the position and the click close, not trade like we did for the stock trading but close. So you will notice that we have 2 contracts but you also see the symbol minus informant of it . This means that in order to close the two put options we have we need to buy 2 options .
The quantity is set to 2, , the expiration is auto filled and the same happened with the price. Now we see that the bid is at 30.60$ and the Ask price is at 30.75$.
You can click market and quickly exit your position or click limit and set a price. I will pick market so there is no wait on the price execution but when I exit my real position I do choose limit so I can get the best price out of it.
On the preview you will see that the estimated debit for this order is 6.150, basically this is the money you will receive once you click send, and there it is the order on tesla was closed and money has been added to our account.
As mentioned earlier the entire interface is customizable to a point, to customize it just go to the line and drag and drop or extend. This is only available for the sides, not the core format. Overall power Etrade is a good platform to perform trades for both stocks and Options.