My broker (Scottrade and now TD Ameritrade) called me, asking for a verbal agreement that I knew that options were high risk and yadda-yadda that can lose more value than they are worth after I signed some forms.

These instruments are very high risk and not really meant for average investors. Their primary goal is for hedging and leverage.

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One of the reasons for the "Black Friday" (kicking off the Great Depression) was the proliferation of leverage among people who didn't really understand it. That's why most other companies make you sign forms and ask for verbal agreements before allowing you to have access to things this dangerous.

>"Black Friday" (kicking off the Great Depression)

Black Thursday. Black Friday is the name of the crash in the federal gold market half a century earlier - or more commonly, the yearly American mega-sale event that follows Thanksgiving.

In the EU, before opening a trading account you are forced by law to compile a standard questionnaire to assess your financial knowledge and risk tolerance. Depending on the results, you might not be able to trade certain instruments.

Options are already broken into levels 1-4 (this is an industry thing, not just RH). Levels 1 and 2 don't run the risk of this happening since you can only sell to close. On other platforms that I've used, going from levels 2 to 3 took a while and required some verification steps to try to confirm that I knew what I was doing.

Robinhood already asks for information about your net-worth, income, etc. The problem is that they verify nothing (at least in my experience). I read /r/wallstreetbets all the time, and plenty of 18 year olds say they are making 100k+ and RH just approves them. They need to improve that process.

Just checked and you don't even need to say you're making 100k+.

I marked that my liquid assets are under 25k, net worth is under 25k, and yearly income is under 25k (all the lowest you can select) and they approved me for option trading instantly.

Looking at GOOG the UI shows me put where the max loss is $8.5k. Seems reckless if they really use the information I gave them to determine what level of risk is appropriate.

I just want to point out that at level 1 you can sell to open covered calls.

Trading options already requires extra approval with several levels which determine how advanced, how big, and how risky of a trade you can make.

Better verification of a person's financials and trading knowledge before allowing this access would be helpful.

Going through a mandatory guide

The broker I use has a mandatory quiz you have to pass, not only for options, but for ETFs, etc.