How Much Money Do You Need to Start Trading Options?
Buying a single call or put requires only the premium and broker approval — no minimum account balance at most brokers. But covered calls, spreads, and naked positions each add a capital layer. This page maps the real regulatory and broker-stated floors from verified official disclosures, with as-of dates for every figure.
The path from $0
Options approval is granted in tiers. Each tier unlocks additional strategy types; capital requirements step up as risk complexity increases.
Simulated trading on a paper account costs nothing. Most brokers — including Schwab and Fidelity — offer paper-trading environments where you can practice strategy execution before committing real capital. No approval tier is needed.
Schwab and Fidelity both have a $0 account minimum. You need enough settled cash to pay the full option premium times 100 shares per contract. In a cash account Fidelity requires 100% cash upfront — buying power is limited to settled funds. Approval required: Schwab Level 1 / Fidelity Tier 1.
As-of: Schwab Apr 2026 (Pricing Guide REG23060); Fidelity Jun 2026 (fidelity.com/trading/commissions-margin-rates).
A covered call requires 100 shares of the underlying per contract. A cash-secured put (CSP) requires enough cash to buy 100 shares at the strike: strike price × 100. The premium collected reduces your cost basis after assignment but does not reduce the capital requirement. Approval required: Schwab Level 0 / Fidelity Tier 1.
Both strategies are permitted in a cash or margin account at either broker.
Spreads (vertical, calendar, diagonal, iron condor, iron butterfly) require a margin account. The Reg T minimum to open a margin account is $2,000 at both brokers (as-of Jun 2026). Fidelity additionally requires $10,000 account value for spread approval (Tier 2). Schwab does not publish a stated dollar floor for spread approval beyond the $2,000 margin minimum. Approval required: Schwab Level 2 / Fidelity Tier 2.1
Fidelity $10,000 figure: MEDIUM confidence (fidelity.com/trading/faqs-margin, Jun 2026). Schwab Level 2 figure: MEDIUM confidence (schwab.com, Apr 2026).
Selling naked (uncovered) options requires margin approval at the highest tier. Fidelity publishes explicit equity minimums: $20,000 account equity for naked equity options (HIGH confidence), and $50,000 for naked index options (MEDIUM confidence). Schwab does not publish a stated dollar floor; Level 3 approval plus the $2,000 margin minimum applies. Approval required: Schwab Level 3 / Fidelity Tier 3.1
Fidelity figures: fidelity.com/trading/faqs-margin (HIGH for $20k equity; MEDIUM for $50k index), Jun 2026. Schwab Level 3: MEDIUM confidence, schwab.com, Apr 2026.
Approval tiers: Schwab vs Fidelity
Schwab uses a Level 0–3 system; Fidelity uses a consumer-facing 3-Tier system. Both brokers grant approval based on experience, investment objectives, and financial profile — capital minimums alone do not guarantee approval.
| Strategy | Schwab Level | Fidelity Tier |
|---|---|---|
| Covered calls, protective puts, cash-secured puts, collars | Level 0 | Tier 1 |
| Buying calls and puts (long options) | Level 1 | Tier 1 |
| Spreads — vertical, calendar, iron condor, iron butterfly | Level 2 | Tier 2 |
| Naked / uncovered calls and puts; short straddles | Level 3 | Tier 3 |
1 Schwab levels (schwab.com, MEDIUM confidence — JS-rendered pages; corroborated across multiple Schwab pages; as-of Apr 2026). Fidelity 3-Tier taxonomy: consumer-facing taxonomy from fidelity.com/options-trading/faqs (HIGH, as-of Jun 2026). Note: Fidelity also publishes a 5-Level application form where Tier 1 ≈ Levels 1–2, Tier 2 ≈ Level 3, Tier 3 ≈ Levels 4–5 — the 3-Tier is the canonical consumer-facing classification.
Commissions and fees
Both Schwab and Fidelity charge the same base options fee with no per-trade base commission online.
| Broker | Per-contract fee | Fee waiver | As-of |
|---|---|---|---|
| Schwab | $0.65 | Buy-to-close ≤$0.05 — waived | Apr 2026 Pricing Guide REG23060 |
| Fidelity | $0.65 | Buy-to-close ≤$0.65 — waived | Jun 2026 fidelity.com |
Options Regulatory Fee (ORF) and OCC per-contract fees apply on top at both brokers — small and variable, not quantified here. Verify current rates with your broker before trading.
The PDT rule: what changed in June 2026
FINRA eliminated the Pattern Day Trader $25,000 equity requirement effective June 4, 2026 (SR-FINRA-2025-017, FINRA Regulatory Notice 26-10, published April 20, 2026). The rule applied to margin accounts with four or more day trades in a five-business-day rolling window.
The replacement standard is exposure-based: a firm must ensure every margin account holds enough equity to cover the largest intraday margin requirement on any open position on any given day. This is distinct from the full notional value of the position. Compliance is achieved through real-time blocking or an end-of-day intraday margin deficit computation followed by a margin call.
Two things that did not change:
- The Reg T $2,000 minimum to open and maintain a margin account remains in force. Day-trading equities on margin still requires at least $2,000.
- Approval tiers for options remain unchanged — the PDT rule was a separate margin requirement, not an options approval requirement.
Frequently asked questions
- Do I need $25,000 to day-trade options?
- No. FINRA eliminated the pattern day trader $25,000 equity requirement effective June 4, 2026 (SR-FINRA-2025-017, FINRA Notice 26-10). The new standard requires enough equity to cover your largest intraday margin requirement. During the phase-in period through October 20, 2027, individual brokers may still apply the old $25,000 floor — verify your broker's current policy before trading. The Reg T $2,000 margin minimum is unchanged.
- How much money do I need to buy a single call or put?
- Just the premium. Both Schwab and Fidelity have a $0 account minimum to open an account. You need enough cash to pay the option premium times 100 shares per contract. Schwab Level 1 or Fidelity Tier 1 approval is required; both allow long options in a cash account.
- Why does Fidelity require $10,000 for spread trading?
- Fidelity publishes a stated $10,000 account value minimum for Tier 2 (spread) approval, in addition to the $2,000 Reg T margin account requirement. Schwab does not publish a stated dollar floor for spread approval — the $2,000 margin minimum is all that is publicly specified. Requirements are set by each broker and subject to change.
- What do Schwab and Fidelity charge per options contract?
- $0.65 per contract at both brokers with no base commission for online trades. Buy-to-close trades priced at $0.05 or less are fee-waived at Schwab; at Fidelity, buy-to-close trades at $0.65 or less are fee-waived. Options Regulatory Fee (ORF) and OCC fees apply on top — small and variable.
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Options profit calculator →Sources
- FINRA Notice 26-10 — amendments to FINRA Rule 4210; effective June 4, 2026; phase-in through October 20, 2027. Source for PDT rule elimination and intraday margin standard.
- Schwab Pricing Guide REG23060 (April 2026) — $0 account minimum, $0.65/contract options fee, Level 0–3 approval structure.
- Fidelity commissions page (June 2026) — $0 account minimum, $0.65/contract options fee, buy-to-close fee waiver.
- Fidelity options trading FAQs (fidelity.com/options-trading/faqs, June 2026) — consumer 3-Tier taxonomy; equity minimums ($10,000 spreads, $20,000 naked equity, $50,000 naked index).
- Options Profit Calculator — compute max profit, max loss, and breakeven for any strategy
- Study deck — drill strategies, greeks, and payoff math with spaced repetition
- Covered call guide — construction, max profit formula, and breakeven worked example
- Cash-secured put guide — how CSPs work and the capital commitment per contract
- Vertical spread guide — all four verticals: debit and credit, calls and puts
- Further reading — recommended books and official OCC and Cboe references