Ultimate Option Strategies

Ultimate Option Strategies

Getting Started With Options

Many beginning option traders never actually trade options.

Instead, they start by "playing on paper." But this can be quite different than actually trading options. Having real money on the table changes the entire game.

The best way to gain experience is to start trading on a very small scale until you gain some skills and confidence. If you buy low-priced options you don't have to put a lot of money at risk to begin trading.

The low-priced options we recommend in Ultimate Option Strategies are an excellent place to start.

In Search of a Broker
In order to trade you must open an options account with a broker. Make sure to use a discount broker.

But with some discounters as well as online trading you will have to do a lot or even all of the order entering without broker assistance. If you need some assistance executing your trades you need a broker that provides some.

You won't survive the options game if you don't get a discount on commissions. If you use a full service broker ask for a big discount on commissions. Most will give you a break.

But don't let your broker talk you into a "managed" options account. When it comes to options trading it is wise to heed the old poker adage of "when you have money in the pot play your own cards."

For more about brokers click here

Don't Plunge
As you start trading remember that the biggest error novice players make is that they overdose and put too much money in the market at one time. Veteran traders don't make this mistake. Draw up a game plan with which you spread your purchases over several months or more. Diversify over several positions and buy both puts and calls.

Far too many traders lose patience and jump on what they think is a "slam dunk" with all their money, only to watch their options waste away and money disappear. Don't be one of them. Be patient and only play with money you can afford to lose.

The options market is open every business day of the year. If you can't place a good trade today, there's always tomorrow.

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