Why you need a margin account for trading options

Options may automatically be exercised or assigned upon expiration. Since the option's price is unknown until market close, your asset situation remains uncertain. After exercise or assignment, your account may incur liabilities, and cash accounts typically cannot cover these debts.

If you wish to trade options without utilizing margin, we recommend opening a margin account and setting your margin limit to zero. This helps prevent the use of margin. However, be aware that even with a zero margin limit, your account could still incur liabilities, as holding options until expiration can lead to debts.