Typical approval levels

Level	Typically allows	Why it matters
Level 1	Covered calls; sometimes cash-secured puts	Usually the first level brokers approve. Covered calls require owning the shares.
Level 2	Buying calls and puts	You can lose the whole premium you pay.
Level 3	Spreads (verticals, iron condors)	Defined-risk multi-leg trades; often needs margin.
Level 4	Selling uncovered (naked) puts	Large losses are possible; needs margin and more experience.
Level 5	Selling uncovered (naked) calls	Losses can be unlimited in theory; the highest level.

Some brokers use 3 or 4 levels instead of 5, or put cash-secured puts in a different level.

What the application usually asks

• Investment experience and how long you've traded
• Income, net worth, and liquid net worth
• Investment objectives (for example, income, growth, or speculation)
• Whether the account is cash or margin

Answer honestly. The covered call course only needs the first level, and you can practice on a paper account before applying.