In this article:
Overview
You can buy long call and long put options at Wealthsimple:
- Buying a long call option (a "buy to open" order) gives you the right, but not the obligation, to buy an underlying stock at a specific price on or before the expiry date. This strategy is useful if you think a stock's price is going to increase.
- Buying a long put option gives you the right, but not the obligation, to sell a stock at a specific price on or before the expiry date. This strategy is useful if you think a stock's price is going to decrease.
Tip: To buy 100 shares and a put to protect them in a single order, see Understanding combo orders.
Understand order types
When you place an order to buy a long call or put option, you can choose from different order types:
- Limit order: This order type allows you to set the maximum price you're willing to pay for the option's premium. Your order only fills at your limit price or better.
- Stop-limit order: This order type lets you set a stop price that activates your order and a limit price that sets the maximum you're willing to pay.
- Market order: This order type buys the option at the best available price in the market at the time you place your order.
Note: Wealthsimple Investments Inc. (WSII) uses a cash reservation system for market buy orders. This helps ensure you have enough funds to cover your trade, even if the price suddenly changes. However, you're still responsible for making sure there are enough funds in your account to complete the order. We might not fill market buy orders for options with low liquidity or may only partially fill them. We'll cancel any unfilled portions. We might cancel market buy orders queued for market open that could cause a delinquency in your account.
Buy a long option
Follow these steps to buy an options contract:
- Log in to the Wealthsimple app
- Tap the Search tab at the bottom of the screen
- In the search bar at the top, enter the name of the stock you want to trade options on
- Tap Buy, then tap the options toggle to view available contracts
- Tap either a call or put option
- Tap the date to select your desired expiry date
- Tap the contract you'd like to buy from the option chain
- Tap Buy
- Choose your desired buy type from the Order type menu
- Enter the required fields for the buy type
- Choose your desired account and tap Review
- Review your order details and tap Place order
- Log in to your Wealthsimple profile
- In the Search name or symbol field at the top of the page, enter the name of the stock you want to trade options on
- Select the stock from the list
- Select the Options tab to view available contracts
- Select either a call or put option
- Select your desired expiry date
- Select the contract you'd like to buy from the option chain
- Select Buy on the right side of the page
- Choose your desired buy type from the Order type menu
- Enter the required fields for the buy type
- Choose your desired account and select Review
- Review your order details and select Place order
Options trading fees
We have a $0 per-contract fee on most successful buy and sell equity options orders for US options. For Canadian options, there's no Wealthsimple commission, but an exchange fee of $0.04 CAD per contract applies on both buys and sells. You can find our detailed fee schedule on our website.
Related articles
- Enable options trading in your investing account
- Understand options terminology
- Options trading fees and taxes
- Trade Canadian options
- Sell a long option
- Sell a covered call
- Buy to close a covered call
- Manage and close options positions
- Understanding combo orders
- Use auto-sell for options
- Understand exercising options and assignment
- Trade options in a margin account
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