Can you trade options on Wealthsimple?

Questions & AnswersCategory: WealthSimpleCan you trade options on Wealthsimple?
Amy asked 2 years ago
Can I Trade Options on Wealthsimple?

1 Answers
Francesca Staff answered 2 years ago

Canadian online financial management firm Wealthsimple Inc. targets millennials with its services. Michael Katchen launched the company in September 2014, and it is situated in Toronto. As of November 2021, the company has more than C$15 billion under management.

If you’re trading options, you’re dealing with an asset that depends on the price of a stock. Within a predetermined time frame, options allow you to forecast the direction of a stock’s price movement. Wealthsimple is a Canadian investment service that allows you to trade options.

What Is an Options Contract?

It is a contract that allows you to buy or sell an asset at a specific price, but it does not obligate you. A call option provides the right to acquire stock.

It is possible to sell a stock if you have a “put” option. On the open market, you can purchase and sell puts and calls.

Options are referred to as derivatives because they are based on the price of another security.

They are only valuable if the price of the item they are based on goes up. In the case of a stock option (which is a derivative of the stock), the option’s price will fluctuate in tandem with the stock’s value.

There are many different types of options contracts, and they may be formed on any type or amount of the underlying asset you choose. As with other asset types, you can purchase options through a broker.

How Do You Trade Options on Wealthsimple?

Options refer to a financial instrument that is derived out of stock. An option, like a contract, provides that a person who owns an option can purchase or sell the stock at a price that is agreed upon, on any given day or for a predetermined length of time.

An option allows you to purchase or sell a particular number of shares at a predetermined period. Still, an option is not a stock, which means that the owner of an option is not entitled to dividends or other advantages. Think of it as a bet you’re placing on the stock’s future path.

Predicting Price Changes, Increases, and Decreases

Speculation is a big part of trading options, which is why they are considered dangerous and only suitable for experienced stock traders. A stock’s price can impact what sort of option you select, so you’re betting on that outcome.

Choose between a call and a put option, in which case you’re betting on the stock’s price rising and are therefore buying it at a higher price at a future date, or between a call and a put option, in which case you’re betting the stock’s price will fall and are therefore selling shares at a specific price at a future date.

If you prefer traditional stock trading instead of options trading. The low-cost Wealthsimple Trade platform enables commission-free trades across Canadian and U.S. exchanges.

Additionally, Wealthsimple’s “investing on autopilot” strategy creates a customized portfolio calibrated to your financial objectives and risk tolerance without paying excessive brokerage fees or maintaining constant market monitoring.

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