How Much Money to Start Trading Options

By Leida Casadiegos · Updated June 2026 · 3 min read · Risk disclaimer

You can start trading options with surprisingly little — but how much you actually need depends on what you plan to do. Buying a single call costs very little; selling certain options can require thousands in collateral. Here is what to expect.

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Buying options needs less

When you buy a call or put, the most you can lose is the premium, so that premium is all you need to put up. A single contract might cost anywhere from a few dollars to a few hundred, which is why buying options is the cheapest way to start.

That low cost is also the trap: small accounts often over-trade because each ticket is cheap. The capital you need is less about the premium and more about having enough to size positions sensibly and survive a losing streak.

Selling options needs more

Selling options usually requires collateral. A cash-secured put on a $50 stock ties up about $5,000 — the cash to buy 100 shares if assigned. A covered call requires owning 100 shares first. Defined-risk spreads need only the width of the spread as margin, which is far less.

Naked selling — uncovered calls or puts — demands large margin and carries open-ended risk, which is why brokers reserve it for approved, experienced accounts. Most beginners should not start here.

A realistic starting amount

There is no legal minimum to buy options, and many brokers have no account minimum. But to trade with proper position sizing — risking only 1–2% of the account per trade — a practical starting point is often a few thousand dollars rather than a few hundred.

Whatever the amount, only trade money you can afford to lose, and consider paper trading first. The goal early on is to learn the mechanics and your own discipline, not to make a fortune from a tiny account.

Worked example. With $500 you can comfortably buy a single call or put and learn the mechanics. To sell a cash-secured put on a $40 stock you would need about $4,000 set aside. To run defined-risk spreads while risking just 1–2% per trade, a few thousand dollars gives you enough room to size positions properly.

Key takeaways

Buying options costs only the premium — you can start with very little.
Selling options needs collateral: cash-secured puts and covered calls tie up thousands.
Defined-risk spreads need only the spread width as margin — far less than naked selling.
For sensible position sizing, a few thousand dollars is a realistic practical start.

Frequently asked questions

How much money do I need to start trading options?

There is usually no legal or broker minimum to buy options — a single contract can cost from a few dollars to a few hundred. But to size positions sensibly and survive losing streaks, a practical starting amount is often a few thousand dollars rather than a few hundred.

Is it cheaper to buy or sell options?

Buying is cheaper upfront — you only pay the premium. Selling usually requires collateral: a cash-secured put ties up the cash to buy 100 shares, and a covered call requires owning the shares. Defined-risk spreads need only the spread width as margin.

Should I paper trade before using real money?

Yes. Paper trading lets you learn the mechanics, test strategies and build discipline without risking capital. It is one of the best ways to start, especially with a small account.

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