How to Place an Option Trade

Introduction


Options provide investors with the ability to lock in a price to buy or sell an underlying security at a specified time in the future.

The higher level of risk associated with options makes them an investment best suited for sophisticated and very knowledgeable investors. Options should only be purchased by investors who have a good understanding of how they work and how they can enhance a portfolio.

To place an option trade, select Trading from the left-hand menu and then choose Trade Options.

You can also place an options trade directly from Account Holdings, My Quote Lists and from your Watch Lists.


NOTE:
You must have option trading privileges added to your CIBC Investor's Edge account prior to placing any orders. Contact a CIBC Investor's Edge Investment Representative to find out how to add option trading privileges to your account.

How to Place an Option Trade - Introduction

Step 1
 

1. Select an action from the dropdown menu, enter the option symbol and choose the applicable market.

  • If you don't know the option symbol, you can look it up using the Symbol Search link.
     

2. Click on Select Symbol to generate the Option Expiry, Strike Price and Option Type fields.

  • Once you select an Option Expiry or Strike Price, the dropdown menu for the remaining fields will be automatically updated to include only valid selections.
  • You can also get a real-time quote for the option you want to trade by clicking on the Get Real Time Quote button. The quote will populate on the right-hand side of the page.
  • Click on the question mark icons for more information about any of the terms used on the Option Order Entry page.
     

NOTE: If you select the U.S. market, but choose to pay from a Canadian bank or brokerage account, foreign exchange rates will apply.

How to Place an Option Trade - Step 1

Step 2


1. Before submitting your order for processing, you can review all of the trade details, including an estimate of the total cost of the trade.
 

2. Once you have confirmed all the details of your trade, enter your trading password and select Submit Order.

  • You can save your trading password for the current session if you are planning on making multiple trades.
How to Place an Option Trade - Step 2

Step 3


After submitting your order, you will receive confirmation that the order was successfully submitted, along with an order tracking number for your reference. You may wish to print this page for your records.

  • You should also verify the status of your order on the Order Status page.
     

NOTE: The settlement period for options is the transaction date plus one business day (T+1).

How to Place an Option Trade - Step 3

Order Status


You can view your recent orders, including orders submitted today, and any Good Through orders that have not yet been filled. Additional details are also available for any orders that have been filled or rejected.

You can change or cancel any open or partially-filled orders. Orders that are "pending" or "next day" can be cancelled, but cannot be changed.

How to Place an Option Trade - Order Status

Other Resources


CIBC Investors Edge allows for option trading on all North American equity markets. Covered positions can be sold (or "opened") online, but naked/uncovered positions can only be placed with an Investment Representative. You may also contact an Investment Representative for spreads and straddles, and any other of the more complex option strategies.

Our Quotes and Research section allows you to see all the options available for an underlying security and you can even track individual option quotes in your Watch List.

Below are some common terms associated with options:

  • Covered: Selling an option while holding the underlying stock at the same time.
  • Naked: Selling an option when you do not hold the underlying stock.
  • Opening: When taking a new position with options you are considered to be opening the position.
  • Closing: When you are offsetting the position, which is either buying back the sold option or selling the bought option, you are closing the position.


When you invest with CIBC Investor's Edge, you will benefit from low commission rates on online and mobile equity trades.