Option Alpha | TradeStation (2024)

TradeStation Securities, Inc. is an SEC-licensed broker dealer and a CFTC-licensed futures commission merchant (FCM), and a member of FINRA, SIPC, CME, NFA and several equities and futures exchanges, which offers to self-directed investors and traders Equities accounts for stocks, exchange-traded products (such as ETFs) and equity and index options, and Futures accounts for commodity and financial futures and futures options (TradeStation Securities does not offer Crypto accounts).

TradeStation Crypto, Inc. is neither a securities broker dealer nor an FCM, and offers to self-directed investors and traders cryptocurrency brokerage services under federal and state money services business/money-transmitter and similar registrations and licenses (TradeStation Crypto is not a member of FINRA, SIPC, CME, NFA or any equities or futures exchange, and does not offer Equities or Futures accounts).

TradeStation Technologies, Inc. is a software development company which offers analytics subscriptions that self-directed investors and traders can use to chart, analyze and design back-tested strategies for Equities, Options, Futures, Forex and Crypto markets (TradeStation Technologies is not a financial services company).

You Can Trade, Inc. is an online educational, news and entertainment media publication service that seeks to provide to the public a marketplace of potentially actionable investment and trading content, ideas, demonstrations and informational tools. You Can Trade is not an investment, trading or financial adviser or pool, broker-dealer, futures commission merchant, investment research company, digital asset or cryptocurrency exchange or broker, or any other kind of financial or money services company, and does not give any investment, trading or financial advice, or research analyses or recommendations, or make any judgments, hold any opinions, or make any other recommendations, about whether you should purchase, sell, own or hold any security, futures contract or other derivative, or digital asset or digital asset derivative, or any class, category or sector of any of the foregoing, or whether you should make any allocation of your invested capital between or among any of the foregoing.

TradeStation Crypto accepts only cryptocurrency deposits, and no cash (fiat currency) deposits, for account funding. In order for you to purchase cryptocurrencies using cash, or sell your cryptocurrencies for cash, in a TradeStation Crypto account, you must also have qualified for, and opened, a TradeStation Equities account with TradeStation Securities so that your cryptocurrency purchases may be paid for with cash withdrawals from, and your cryptocurrency cash sale proceeds may be deposited in, your TradeStation Securities Equities account. Therefore, if you want to open a TradeStation Crypto account, you must also have an Equities account with TradeStation Securities. This cash in your TradeStation Securities Equities account may also, of course, be used for your equities and options trading with TradeStation Securities.

TradeStation and YouCanTrade account services, subscriptions and products are designed for speculative or active investors and traders, or those who are interested in becoming one. No offer or solicitation to buy or sell securities, securities derivative or futures products of any kind, cryptocurrencies or other digital assets, or any type of trading or investment advice, recommendation or strategy, is made, given or in any manner endorsed by any TradeStation Group company, and the information made available on or in any TradeStation Group company website or other publication or communication is not an offer or solicitation of any kind in any jurisdiction where such TradeStation Group company or affiliate is not authorized to do business. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, futures options, or crypto); therefore, you should not invest or risk money that you cannot afford to lose. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system, platform and software errors or attacks, internet traffic, outages and other factors. The trademarks “TradeStation®,” “YouCanTrade” and “SheCanTrade,” as well as other trademarks, domain names and other proprietary intellectual property of TradeStation Group companies, are owned by TradeStation Technologies. The proprietary TradeStation platform is offered by TradeStation Securities for Equities (including equity options) and Futures trading. TradeStation Crypto offers its online platform trading services, and TradeStation Securities offers futures options online platform trading services, through unaffiliated third-party platform applications and systems licensed to TradeStation Crypto and TradeStation Securities, respectively, which are permitted to be offered by those TradeStation companies for use by their customers.

Please also read carefully the agreements, disclosures, disclaimers and assumptions of risk presented to you separately by TradeStation Securities, TradeStation Crypto, TradeStation Technologies, and You Can Trade on the TradeStation Group company site and the separate sites, portals and account or subscription application or sign-up processes of each of these TradeStation Group companies. They contain important information, rights and obligations, as well as important disclaimers and limitations of liability, and assumptions of risk, by you that will apply when you do business with these companies.

Option Alpha | TradeStation (2024)

FAQs

What is the alpha of an option? ›

Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market's movement as a whole. The excess return of an investment relative to the return of a benchmark index is the investment's alpha.

Is options alpha worth it? ›

If your main goal is to make money by trading options and selling option premium, don't waste your time with Option Alpha. If you're looking to be entertained then subscribing to Option Alpha would certainly be worthwhile.

Is options alpha free? ›

Yes, you can try Option Alpha completely free for 30 days. During your trial you'll have a chance to kick the tires on every part of the platform so you can make the best decision. Plus, there's no credit card required to sign up.

What is the alternative to Option Alpha? ›

Option Alpha's competitors and similar companies include Meliuz, EQi, Fi and Marquee Equity.

What's a good alpha? ›

Alpha is also a measure of risk. An alpha of -15 means the investment was far too risky given the return. An alpha of zero suggests that an asset has earned a return commensurate with the risk. Alpha of greater than zero means an investment outperformed, after adjusting for volatility.

Is a higher or lower alpha better? ›

Alpha values are typically used to rank the performance of actively-managed mutual funds and their investment managers. A higher alpha shows that a particular fund often outperforms the market. You can also use alpha values to check the performance of a particular security against the benchmark index.

How do option writers lose money? ›

The Writer will potentially face high loss if the options that they write are uncovered. This means that they do not own shares they write calls on or do not hold short shares in the option they write puts on. Large losses could result from an adverse move in the underlying price.

Is it worth it to pay for Seeking Alpha? ›

Is Seeking Alpha worth it? Overall, a Seeking Alpha Premium Membership is 100% worth it for investors planning to buy and sell stock throughout the year. It's also beneficial for investors that plan to do their own research and want access to a complete platform that's easy to navigate.

Do option sellers really make money? ›

It can be profitable to sell options as the seller collects a premium upfront when they sell and then hopes that the option expires worthless. It's better if the position is hedged, however, because selling options can be risky.

Does option Alpha work with Robinhood? ›

Robinhood currently does not offer a commercial API integration with support for options. We'd love to integrate with Robinhood and if you feel the same way, help us out by adding your vote.

Why is options trading so expensive? ›

Time value is essentially the risk premium the option seller requires to provide the option buyer with the right to buy or sell the stock up to the date the option expires. It's like an insurance premium for the option. The higher the risk, the higher the cost to buy.

Can I trade options without a broker? ›

Regardless of your trading objective, you'll need a brokerage account that's approved to trade options in order to proceed with any strategy involving options. The types of options you can place also depend on your specific options approval level.

How does options alpha work? ›

You can set up your bots to make all the decisions and take all the appropriate actions for scanning and management right inside of Option Alpha. Then, when it comes time to send the order for a new trade, we just submit the order request to your broker who places the order and tries to fill the trade on your behalf.

What are alternatives for alpha? ›

Competitors and Alternatives to Alpha Anywhere
  • Ionic.
  • Neptune DXP.
  • Zoho Creator.
  • WaveMaker.
  • AppSheet.
  • Resco Mobile CRM tool.
  • SAP Build.
  • LightSwitch.

What is the Omega Greek option? ›

Omega is a measure of options pricing, similar to the option Greeks that measure various characteristics of the option itself. Omega measures the percentage change in an option's value with respect to the percentage change in the underlying price. In this way, it measures the leverage of an options position.

What is alpha and beta in options? ›

Alpha is a way to measure excess return, while beta is used to measure the volatility, or risk, of an asset. Beta might also be referred to as the return you can earn by passively owning the market.

What does alpha mean in trading? ›

Alpha is the return on an investment that's incrementally more than a benchmark index such as the S&P 500 or another appropriate benchmark. Alpha is used as a yardstick when an investor chooses an active investment strategy, meaning they're trying to outperform the market.

What is alpha of a strategy? ›

Alpha is a measure of the performance of an investment as compared to a suitable benchmark index, such as the S&P 500. An alpha of one (the baseline value is zero) shows that the return on the investment during a specified time frame outperformed the overall market average by 1%.

How do you calculate the alpha? ›

How do you calculate alpha? The formula that calculates alpha is: Alpha = R - Rf - beta (Rm - Rf). In this formula, R represents the portfolio's return, Rf represents the risk-free rate of return, beta represents the systematic risk of a portfolio, and Rm represents the market return, for each benchmark.

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