What are the options trading levels?
Last updated: 12 August 2026
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Many brokerages provide a system of tiers to describe the complexity and risk associated with different options trading strategies. Generally, there are six options trading levels:
- Level 1: Covered Calls
- Level 2: Level 1 plus long calls, long straddles, long puts, long strangles, and covered puts Level 3: Levels 1 and 2 plus credit spreads, calendar spreads, and debit spreads
- Level 4: Levels 1 through 3 plus naked equity puts
- Level 5: Levels 1 through 4 plus naked equity calls
- Level 6: Levels 1 through5 plus naked index calls and naked index puts
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