Can you trade options on a funded account? Guide by H2T Funding

This is one of the most common questions from traders exploring proprietary trading firms. According to H2T Funding Prop Firms, a website that reviews and compares top prop firms, the question “Can you trade options on a funded account?” depends entirely on each firm’s rules and trading model. While some firms allow defined-risk option strategies, others restrict trading to futures or forex.

In this guide, you’ll learn when trading options is allowed, when it’s not, and the exact strategies most prop firms accept.

Let’s begin with the quick answer.

1. Can you trade options on a funded account? (Quick answer)

The short answer is: sometimes, but with conditions. Prop firms have different policies depending on their risk management model. Generally, you can get funded for options trading if the strategy involves clearly defined risk. However, naked or unlimited-risk strategies are almost always restricted.

Can you trade options on a funded account?

If you’re wondering how firm-specific rules compare across industries, similar to how retail policies like how does target price match work vary from store to store, the same logic applies in the prop trading world. Each firm has its own framework for what’s allowed and what’s not.

1.1. When it’s typically allowed

Prop firms that support options often limit traders to defined-risk strategies. This means your maximum potential loss is capped from the start. For example:

• Spreads where risk is offset by buying and selling contracts
• Iron condors or butterflies with fixed payoff ranges

In my experience, firms are more comfortable funding traders who can demonstrate consistency with these strategies because they reduce the chance of catastrophic losses.

According to CME Group (2023), structured spreads are among the most common professional approaches because they balance potential reward with capped downside.

1.2. When it’s restricted

On the other hand, many firms prohibit options completely. These are typically futures-only or forex-only funding models. Firms such as Topstep (futures) or FTMO (forex) focus on their primary market and do not allow any option trades.

This restriction is not necessarily a disadvantage. I’ve seen traders apply for futures-only programs, refine their strategies there, and later expand into multi-asset firms that support options once they’ve built a stronger track record.

2. Why do many prop firms restrict options

Not all firms are willing to fund options traders, and the main reason is risk exposure. Unlike futures or forex, options can create complex positions where losses are harder to control. This is why the answer to “Can you trade options on a funded account?” often depends on the firm’s ability to manage advanced risk.

Several factors drive these restrictions:

• Unlimited loss potential: Naked calls or puts can expose firms to theoretically unlimited downside.
• Liquidity concerns: Some options, especially on individual stocks, trade with low volume and wide spreads, making risk management more difficult.
• Monitoring complexity: Options portfolios require margin, Greeks (Delta, Gamma, Theta, Vega) analysis, and real-time hedging. Many smaller prop firms don’t have the infrastructure to monitor this effectively.
• Event risk: Major earnings announcements or geopolitical shocks can cause options to gap drastically, leading to outsized losses.

As Investopedia (2024) explains, firms must manage not only directional exposure but also volatility and time decay, making options oversight more demanding than spot forex or futures.

From my perspective, these restrictions stem more from cost and practicality than from distrust of options traders. Firms that lack advanced risk systems often decide to remove this asset class entirely to avoid unpredictable payouts.

3. Common option strategies allowed

When prop firms do permit options, they usually limit traders to strategies with defined risk. These approaches ensure that both trader and firm know the maximum loss before entering a trade.

3.1. Spreads, iron condors, butterflies

Spread-based strategies are the most commonly allowed because they naturally cap risk:

• Vertical spreads (bull call, bear put) let you define maximum loss while targeting directional moves.
• Iron condors combine two spreads to profit from low volatility conditions.
• Butterflies allow traders to target specific price levels while keeping losses limited.

In my own trading, I’ve found that firms prefer seeing these strategies because they demonstrate discipline. You can’t “blow up” the account on a single trade when your risk is pre-defined.

3.2. Covered calls and cash-secured puts

Some firms also allow covered strategies, provided the trader has the underlying capital within the account structure:

• Covered calls generate income against long stock positions.
• Cash-secured puts require sufficient buying power to purchase shares if assigned.

These approaches are generally accepted because they are conservative. They generate premium income while aligning with risk limits.

3.3. Strategies usually banned (naked options)

What’s almost always prohibited are naked calls and puts. These leave the account vulnerable to unlimited loss. A sudden price move could wipe out not only the trader’s balance but also the firm’s capital.

As Alexander Elder noted in Trading for a Living (2014), “The market will always find a way to punish unprotected exposure.” This principle explains why prop firms simply refuse to underwrite such trades.

4. Rulebook checklist before applying

Before you apply to any prop firm, you need to carefully review its rulebook. Even if options are allowed, the fine print usually defines what’s possible and what’s off-limits.

Rulebook checklist before applying

4.1. Confirm options allowed? and which strategies

Not all “options-permitted” firms are the same. Some only allow spreads, while others also permit covered calls or cash-secured puts. Always check:

• Which option strategies are explicitly listed as allowed
• Whether there are restrictions on expirations (e.g., no weekly options)
• If overnight holding is permitted

I’ve seen traders assume options are broadly allowed, only to lose their funded account because they traded a prohibited setup.

4.2. Margin, drawdown, and event risk rules

Options interact with margin differently than futures or forex. Make sure you understand:

• How margin requirements are calculated for spreads vs. single options
• Maximum daily and overall drawdown thresholds
• Event restrictions (e.g., no trading through earnings)

According to the CFTC (2023), firms must enforce strict margin policies to prevent excessive leverage and systemic risk. Ignoring this can cost you your account in one trade.

4.3. Platform support and data fees

Finally, check whether the firm’s trading platform supports options at all. Some futures or forex-focused systems don’t integrate options chains. Ask about:

• Which platforms are supported (e.g., Interactive Brokers, Thinkorswim)
• Real-time data costs for options markets
• Whether you need add-on subscriptions

In my experience, these “hidden” fees can surprise new traders. A platform might technically allow options, but if data costs are too high, your net profit shrinks quickly.

5. Real examples from prop firms

Policies on trading options vary widely across proprietary firms. Looking at real cases helps illustrate the differences and answers the practical question many traders have: Can you get funded for Options Trading?

5.1. Firms that allow options (e.g., Maverick Trading)

Maverick Trading is one of the best-known firms that supports options strategies. Their entire business model is built around training and funding traders in equity and option markets. They typically allow:

• Spreads (verticals, condors, butterflies)
• Covered calls and cash-secured puts
• Strict risk-defined positions only

I’ve reviewed traders funded by Maverick, and their feedback often highlights the value of structured risk oversight. The firm emphasizes discipline and consistency over high-risk speculation.

5.2. Firms that prohibit options (e.g., Topstep)

By contrast, futures-focused firms like Topstep restrict trading to futures contracts only. They don’t permit options at all, since their evaluation and monitoring systems are designed exclusively for futures markets.

This doesn’t mean the firm is less credible, just that its infrastructure isn’t designed for multi-asset strategies. Traders interested in options must look elsewhere.

5.3. Key takeaway: policies differ across firms

The clear lesson is that each firm has its own policies. Some encourage defined-risk options, others outright prohibit them. The safest approach is:

• Always read the firm’s FAQ and rulebook in full
• Confirm allowed strategies with support before applying
• Choose a firm that aligns with your trading style

As Jack Schwager wrote in The New Market Wizards (2012), “The markets reward traders who align their strategies with their environment, not those who fight it.” The same applies when choosing the right prop firm.

6. About H2T Funding - Helping traders choose firms with confidence

Founded in 2025, H2T Funding was created to give traders a reliable compass in the often confusing world of proprietary trading firms. Instead of vague marketing promises, the platform delivers clarity and well-researched insights to traders across more than 150 countries.

With this focus on transparency, H2T Funding – Helping traders choose firms with confidence has become more than a tagline; it reflects the platform’s commitment to guiding traders toward the right funding opportunities.

Its mission is built around four pillars that directly support traders:

• Prop firm reviews – Honest breakdowns of top firms, based on actual rules and feedback from verified traders
• Prop firm rules – Clear explanations of funding conditions, such as profit splits, drawdown limits, and evaluation models
• Budgeting Strategies – Practical tips and proven methods to manage money effectively, build emergency funds, control expenses, and grow trading capital for long-term success
• Cash Flow & Saving Strategies – Guidance to optimize income, manage expenses, and boost savings, helping traders maintain healthy cash flow and achieve sustainable growth
• Prop Firm & Trading Strategies – In-depth guides to select the right prop firm, master trading approaches, apply evaluation tips, and develop strategies for consistent profits and scaling
• Resources – A constantly updated library of guides, tools, and industry news that helps traders stay ahead

To expand its support beyond articles, H2T Funding also connects with traders on multiple platforms. The official YouTube channel youtube.com/@h2tfunding offers explainers, firm reviews, and tutorials that simplify complex trading concepts. Meanwhile, the facebook.com/h2tfunding provides timely updates, community interaction, and practical insights for traders looking to stay engaged with the latest industry news.

The strength of H2T Funding comes from its people, each bringing unique expertise:

• Mr. Do Duc Hoang, Co-Founder & CEO, with more than 15 years of forex trading experience at international banks.
• Ethan Stroud, Content Director, who spent a decade in financial publishing at Click Media (WPP Group).
• Tea H2T, Head of Content, specializing in market research and strategy.
• Ngan Pham H2T, Content Creator with an economics and marketing background, making complex topics easier to grasp.
• Minh Chau, Content Writer, is committed to producing practical and concise financial research.

H2T Funding Team

Through this blend of experience, transparency, and trader-focused resources, H2T Funding has positioned itself as a trusted partner for both aspiring and professional traders.

7. FAQs

Even if some prop firms allow options, traders often have very specific questions. Below are the most common ones.

7.1. Can you trade options on a funded account with spreads?

Yes. Most firms that allow options specifically permit defined-risk strategies such as vertical spreads, iron condors, or butterflies. These strategies limit maximum loss and fit within firm risk models.

7.2. Do prop firms allow holding options overnight?

It depends. Some firms permit overnight holding only for defined-risk positions, while others prohibit it entirely. Always check the firm’s rulebook for overnight restrictions.

7.3. Are covered calls usually accepted?

Often, yes. Covered calls are considered conservative because they are backed by the underlying asset. However, acceptance varies, so confirm before trading.

7.4. Which prop firms ban options entirely?

Futures-only firms like Topstep or forex-focused firms such as FTMO generally prohibit options. Their programs are designed around a single asset class.

8. Conclusion

So, can you trade options on a funded account? The answer is yes, but only under specific conditions. The key is knowing which firms allow it, which strategies are permitted, and how rules on margin and event risk can affect your account.

Key takeaways for traders:

• Defined-risk strategies (spreads, iron condors, butterflies) are most commonly accepted.
• Covered calls and cash-secured puts may be allowed but must follow firm guidelines.
• Naked options and unlimited-risk positions are almost always banned.
• Each firm’s rulebook is different; always verify before applying.

From my own experience, I once joined a futures-focused prop firm expecting to use options later, only to discover they weren’t supported at all. That lesson taught me the value of checking rulebooks carefully and aligning my strategies with the right funding program.

Ready to take the next step? Visit H2T Funding to explore expert reviews, tools, and resources designed to help you choose the right funding firm and succeed in your challenge.

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