Options Account Approval and Regulations

What this video covers

• The three-step sequence to open an options account: gather financial information, deliver the Options Disclosure Document (ODD), then get written approval from a Registered Options Principal (ROP)
• Why the ODD must be delivered at or before account approval, never after, and how the exam baits you on the order of events
• The 15-day rule for returning the signed options agreement, and why a missed deadline restricts the account to closing transactions only (not frozen, not liquidated)
• The four progressive approval levels: covered calls and protective puts (Level 1), long calls and long puts (Level 2), spreads (Level 3), and naked writing (Level 4)
• Why approval at a higher level automatically grants permission for every level below it, and why Level 4 demands the highest scrutiny under Regulation Best Interest (Reg BI)
• The 10 calendar day FINRA filing requirement for pre-ODD communications, plus the ban on recommendations, performance data, and specific security names
• Why post-ODD communications fall back under the standard FINRA communications-with-the-public rule