Options Trading: Quick Tips And Tricks

Options Trading is  the less known trading in the wild world of Stock Trading. It is so less known that only few daring individual covertly earn from this kind of stock trading. In fact, this is the only trading where you earn either the market goes up or down, such so that there are only few elite traders that can consistently make money from it. They mus know something that other do not.

Here are few straightforward quick tips and tricks for you about Options Trading. Take note that tips herein might not be foolproof as you can craft your own way to the top of the market besides the institutionalized and structured way of trading.
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Trading is not Genetics

Seeing successful traders from a distance temps us to think that trading is genetic. It seems that what they do cannot be replicated by onlookers like us. But it’s not. It just a matter of getting used to the system. Getting intimidated by the terms, jargons, tools and the trading environment is a natural process. But once you get the hang of it, you’ll see that struggles and the learning curve is no different in some other walks of life – like learning to walk when you were a baby.

Education and Experience

You have to give this a priority. You cannot let others learn for you, unless you are moneyed enough to pay financial managers to trade for you. Options trading is specially complicated than the conventional trading. There is no special superhuman power needed in learning to trade options trading. In fact basic mathematics and education is all you need. You are not even encourage to over analyze things as it may lead to analysis paralysis at they say.

Risk

Risk is real, but calculated risk is another. Stock market is as volatile as a weaponized explosive. It can burst, go up or down at any time for you or against you. But just like any other enterprise in life, risk is as real as reality itself. So education is a one big plus factor before you paddle your canoe to Options trading.

“Now, speaking of risk. Do you know that life in itself is already a risk. Whether you trade or not, life itself in general is already a great risk. So, what more risk are you afraid of if risk is the only thing that prevents you from trading you way to success.”

Trade the Surplus Money

Rule of thumb, do not  trade blood money. I say blood money in a noble way. It is a money that you need so dearly. It is the money you use to pay your utilities, bills, food, education – or any money you need for your upkeep. Use the money that you can risk and afford to lose. Again, losing money is the stock market is part of the risk. In fact there is only a thin line that separate losing and gaining in the stock trading, more in particular Options Trading.

U.S. Stock Market

U.S. Stock Market is by far the reference point of every trade in the world. Or at least it has significant influence in the stock trading flow in the world. Reason for this is that US is a financial hog. It is the biggest creditor in the world. It is also where you find the famed stock and financial institutional grinding avenue in the world – The Wall Street. So, you might want to include in your stock trading learning portfolio U.S. Stock market. You can start learning here ➤

Shares vs Options

Shares and Options are both elements of the stock market. They are just in different shades and colors. Now, take note the sharp difference, in Shares (also known as Stocks) you earn when the market moves up. In Options, you earn both ways – up or down. The only time you won’t be earning in Options is when the market goes sideway – or the market don’t have much movements.

Beware of Expiration

Options trading will give your investment further mileage when it comes to gain. Imagine yourself taking advantage of the market’s movement in both ways – up or down as opposed to the conventional stock trading where you earn only when the market goes up. Though, Options gives you more options literally, it has a definitive shelf life. In other words, it expires!

Options trading thrive in the turbulent waters of the stock market and weathers in calm seas. So, be jolly if the market is behaving erratically and be cautious if the market is calmer than ever. 

Stop Loss

Almost every trading in the market knows this mechanism. Stop loss by namesake is the process of stopping further aggravation to your investments. What you do in stop loss is you set a tolerable loss limit to your investment. In Options, it’s usually 5% loss. Then you either manually withdraw from the market or set it automatically.  

Same ironically can be done if the market is in your favor. You put a generous earning limit, then you can withdraw from the market once the earning point is reached.

There can still be thousands of tips and tricks for starting your way to Options Trading. But if you aren’t too sure yet, as I bet you did. You can start getting wet by Starting Your Baby Steps To Options Trading Here ➤

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