Successful Option Trader reveals his Trading Strategies with Tom Sosnoff on tastytrade

Trading Options Could Be Your Ticket To A Higher Return

6How long have you been trading stocks? If you’ve only been trading and looking seriously into the stock market for a short time, I do not recommend trading options right away. Of course, if you’re excited and considering options trading, then you’re likely already sold on the idea. It can be a lucrative opportunity and open the door to larger returns, but you do have to be careful.

Your Choices When Trading Options

I wouldn’t say it’s as risky as trying out the Forex market, but you need a firm understanding of your choices when Trading Options . Otherwise, you could end up losing money like never before. The way I learned was to sign up for access to stock options using the brokerage account I already had. Once I signed up and could see everything on my control panel, I started toying around with different trade ideas, looking up information on the side.

In other words, I would act like I was going to execute a trade, and as I would see what I’m looking at, I would learn more. This was actually a good way for me to learn, given the fact that I had a huge interest in Option straddle example . However, it would have been nice if I had signed up for a virtual account for trading stock options. That way I could have actually placed virtual trades. Not only would I have seen the difference when actually executing the trades, but I would have been able to see if I made money or lost money, virtually of course.

How an options trade is going to work

I’m not sure if I would have wanted to wait, but it would have been the best and safest option. You kind of need to know how an options trade is going to work before you make one for real. If you’re not going to look into virtual trading, then you need to really familiarize yourself with stock options strategies before you start placing trades.

Stock Options Trading Provides Investors With More Opportunities

5There is no shortage of information about stock options trading online, but none of the information out there is going to help you select a security, select the options play that is going to make you money and rake in the profits. I’m saying this right off the bat because there are so many advertisements out there about making money with stock options, and while people can show you what they know, you’re the one that has to make the plays.

How Options Trading Works

This means you have to understand the market and how trading the greeks options works. One great thing about options has nothing to do with separate stock plays and higher returns. You can place an options trade that helps to protect a risky position that you’ve taken on with a particular stock. In other words, say you buy a stock at 5 dollars a share, which is a little low and out of your comfort range. You feel confident that the stock price is going to go up, but you’re not completely sure of course.

So, you take out an options contract that plays things a little differently and helps protect your investment in case the share price actually starts going down. One thing about options contracts, too, is that you can be holding them for quite some time if you set the time limit that way. In other words, don’t lose track of your trades!

Start Learning Trade Options

When I first started learning options, I remember I tried to create an options contract and realized it was going to cost me much more money than I thought. I also realized that I was trying to do an options contract at one point that required I already have shares of the stock in question. Stock options trading can be a little tricky, but you’ll get the hang of it soon.