Options Trading

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Once thought to be the sole domain of the highly skilled, professional investors and traders, today more and more private investors and traders are entering the options market. For those who have the right education and mindset, options trading can become their main source of income.

Options trading offers a series of interesting and profitable alternatives to normal share trading. But before jumping in and getting involved in options trading it is very important to be conscious of the basic concepts involved. Options are divergent from stocks in that they are derivatives, which means that options get their value from something other than themselves, that is an underlying security/share. Options also have a time limit while stocks do not. Options will expire after an agreed time, unlike stocks, which of course don’t.

Example of an Option Trading Seminar
Options Trading Course. How Options Trading can make you a living. Jules Dawson explains options trading for beginners.

People trade options for a number of reasons. Firstly they are a leverage able item. They can provide an excellent return from a minimal outlay. Of course leverage is a double edged sword. When you win you can do very well, if you lose your losses are of course also magnified. Secondly, regardless of market direction, you can make money using different options strategies. If you can accurately analyze the direction of a share using technical analysis, charts and indicators, then there is an option trading strategy that you can use to make money.

Another major reason for getting involved in option trading is their flexibility and by this I mean you can trade in a sideways market or one which is going up (Bull market) or one that is going down (Bear market) and still take consistent profits. To maximize your success in options trading there are several key skills and attributes you will need to be proficient with. They are skills found in all successful option traders.

  1. An emotionally objective mindset
  2. A solid knowledge of the various strategies available to you
  3. Discover which strategy works best for you
  4. Good technical analysis skills, that is charting, use of indicators etc
  5. A sound trading plan or investment system
  6. Trading discipline

As with any kind of trading there is risk involved – especially for the beginner – and seeking out the right education is paramount before you get involved. Of course this is true for just about everything in life. Once you have a solid education foundation then you can build upon it, always seeking to improve your knowledge and refine your skills and strategies and in doing so you will be going a long way to minimize risk and maximize reward.

Before you invest a cent in the markets first invest in your options trading education. The most effective way to acquire your options trading education is to find a company that has a range of courses to suit your needs, be it beginner or an advanced trader, a company with expert instructors who all have years of trading experience.