Series 14: 8.5.2.3. Options Accounts

8.5.2.3. Options Accounts

Brokerage firms that allow options trading must develop and maintain written procedures that govern the firm’s conduct regarding their options business. These written procedures must describe how a customer’s account will be approved for options trading and who will be responsible in the firm for its compliance with the rules.

Prior to approving a customer for options trading, a firm must exercise due diligence in finding out essential facts about the customer’s objectives and financial situation. Additionally, the firm is required to keep a record of this information readily available in its files. Specifically, the organization must learn the customer’s investment objectives, employment status, estimated annual income, estimated net worth, liquid net worth, age, number of dependents, and investment experience and knowledge.

After assessing the investor’s su