Looking to start your options trading career and wondering how much money you need to trade options successfully
This Step-by-step- tutorial will show you that contrary to what so-called experts tell you, you can start day trading options with very little money.
How little? Read further.
Table of Contents
How Much Money Do You Need to Start Trading Options?
There is this misinformation out there from so-called gurus that one can only make money options trading by spending a great deal of money.
I have been trading and teaching beginners options trading since 2014.
The answer to the question how much money you need to start trading options is little as $5.
The cheapest contract options you can trade will cost you $1.
Therefore, you can start trading options with less than $10 without a doubt.
Your broker may have an initial deposit requirement amount of 1,000 (ETRADE) but once that money is in your account, you do not need to it all to start trading options.
I have traded options successfully with $1 and $2.
The amount of money you need to start trading options is not a determining factor of your trading success.
There are plenty of options you can trade with very little money as long as you know which strategies can make you money with such small initial investment.
I will provide you with the knowledge you need to start trading options without needing hundreds or thousands of dollars.
I would like to re-assure you that trading options with $5 or $10 does not mean we are trading some obscure stocks.
On the contrary, you will learn how to trade the most traded options with this type of money on a consistent basis.
Brokers Initial Deposit Requirements
Some brokers may have an initial deposit amount to start trading options.
Such is the case for E*TRADE: the amount is $1,000 to be able to get Live Quotes instead of the delayed quotes.
Several other options trading brokers do not have that initial deposit requirement at all.
Therefore, you can open an account and fund it with whatever money you have, and you are good to start trading option with your own capital.
I am not a big fan of margin account especially for beginning options traders.
|Options Trading Brokers||Initial Deposit Amount ($)|
How Much Money to start Trading Options?
Let’s leave aside the cost of fee your broker will charge you to trade options because nowadays plenty of brokers charge $0.
such famous examples are Webull, eOption and Robinhood.
However, beware what you get for free is not always the best for you and your option trading account in this case.
I would like to strictly focus on the investment money you will need to start trading options.
Because a picture is worth more than a thousand words, let’s me show you the numerous successful options trades I have traded recently with less than $10.
If you are able to replicate a process multiple times with a successful outcome, I believe that is the validation that your methodology is sound and valid.
That is exactly what the options trading strategy below has proven for me and the traders in my Discord Room.
In the above slideshow, I share the huge profit we (myself and traders in my Discord Room who I teach about this option strategy) have been able to enjoy.
So can you.
Here is a summary table to help you further understand why and how this is possible to trade options successfully with $2, $5 or $9.
|Option Traded||Cost per Contract||Option Profit (%)||Underlying Stock|
|QQQ May4 324 Calls||$30||2000%||QQQ|
|QQQ May20 287 Calls||$5||2000%||QQQ|
|QQQ May27306 Calls||$2||3000%||QQQ|
|QQQ June24 294 Calls||$6||900%||QQQ|
|QQQ July18 292 Puts||$16||1700%||QQQ|
|QQQ July20 304 Calls||$9||1000%||QQQ|
Let’s analyze the above data to give you some great insights on how to trade options for less than $10.
Best Options to trade for Less than $10
QQQ is by far the best stock you can trade options with for less than $10 per contract.
I chose to include only the big winners (over 900% in the slideshow).
In reality, Ican share a full database of winning QQQ Options that cost less than $10 or anything budget that you want to allocate to your trading.
If you would like to master the option trading to trade QQQ for less than $10, $20 or $30, here is the full tutorial.
Is QQQ the only stock To Trade Options with for less than $10?
QQQ is certainly not the only stock that provides options contracts you and I can trade for less than $5 or $10.
I can list SPY and IWM as two good ETFs to leverage this successful options technique on as well.
Furthermore, aside from ETFs, the regular stocks also offer the possibility to consistently trade options for a very small capital.
I provided the full strategy we use in our Discord Room on other stocks further below.
How much money do you need to invest in stocks vs options?
The great advantage of options trading over stocks trading is the fact that you do not need a lot of money to trade options.
Most US stocks – especially the high growth technologies stocks-have become too expensive for the average investor.
Recently, several of such stocks such as Apple(Ticker:AAPL) , Tesla (Ticker:TSLA) , Nvidia (Ticker:NVDA), Amazon(Ticker:AMZN) or Google have had to resort to stock split to make their shares more affordable.
That is very telling in this age of time where fractional shares buying is available to the general public.
How many shares of QQQ stocks Can you Buy with $100
A quick look at the above table reveals that the cheapest stocks in the tech ETF QQQ is Paypal (Ticker:PYPL) at $114 after losing almost 45% in 2022.
The second cheapest stock is AAPL with a price of $170 following a recent 4:1 split.
Consequently, it is very difficult to start investing in stocks without big money unless you are willing to try your luck with penny stocks.
On the other hand, you have multiple investment opportunities with options with a very small capital.
Cost of Options
Some traders often get confused with the options chain quotation.
American options by default are set such that one contract control 100 shares of the underlying stock.
Therefore, the option price you read on the option chain needs to be multiplied by 100 to get real money option cost.
Let me illustrate in the table below how to translate Option chain quotation into real money.
|Option Chain Quotation ($)||Real Money option price ($)|
In case you may be wondering if $1 is a realistic amount to invest in options trading, let me answer with an Emphatic yes !
Here is the video of a recent trade I made on Target (Ticker:TGT) to prove it.
How much money do you need to trade Options full time?
In the above video, I showcased how I traded TGT options from $1 to $50.
That was not random at all.
I and other traders in my Discord room are doing this regularly.
So Can you when I teach you these very powerful strategies.
The table below showcases how I traded SPY options from 2 cents (quotation or $2 real money) to 20 cents in less than one hour.
Ultimately, you can easily answer the question: How much to do you need to trade options full time.
A few hundred dollars can go a long way to get you started trading options successfully.
The key is to gather the necessary knowledge so that you can take your trading to the next level in 2022 and beyond.
How Much Money to Trade Options | Summary Video
Here is my YouTube summary video of this Article on How much money you need to start trading Options.
You should save it for future reference anytime you want to refresh yourself on this topic.
How Much Money Do You Need to Trade Options On E*TRADE?
I have been trading Options on E*TRADE platform since 2016 so you would agree with me that I have some expertise in this topic.
According to Investopedia best brokers for Options trading ranking, E*TRADE is the #2 Platform for Options trading. and Best Overall for Beginning Options traders.
Are your Options Trading broker Fees too high?
The Top brokers rankings from Investopedia are mostly about how much the platforms charge traders on each options contract, the level of education resources and tools each broker offers.
As an option trader, the fees you pay per option contract are not going to make or break your trading account.
I am assuming you are not an overtrader with huge volume of contracts that are not profitable.
At 65 cents per option contract, (you can go lower to 50 cents per contract if you have over 30 trades per quarter) E*Trade is the most expensive one.
Here is a quick table of how much money you will spend on options fees based on your trading activity.
I am assuming you are trading after your initial quarter and thus you pay 50 cents to buy and sell contracts.
|Number of trades per day||Fees per Week||Fees per month||Total fees per year|
|3 (3 buys and 3 sells)||$3 x5 = $15||$60||$720|
|5||$5×5 = $25||$100||$1200|
|10||$10 x5 =$50||$200||$2400|
I used extreme numbers in the above table on purpose.
The reality is not that because options traders use strategies such as swing trading meaning you do not trade that high number of contracts each day because you carry positions from the previous day(s).
The other factor is that trade opportunities are not present every single day.
By my experience, we can easily reduce the number in the above table by 50% for the monthly and thus the yearly figures.
But what you pay for is a great platform with plenty of educational content and easy to comprehend tools.
Furthermore, the Order ticket is easy to understand with features such as trailing stop that is second to none.
The above trade on ETRADE that I just traded in my Discord room may not be possible on Roku on Webull because those brokers would restrict trading on a stock such as Roku because it is too volatile.
This defies all logic because Options traders rely on short term volatility to make money!
That stock moves over 10% in less than 90 minutes and the options contracts we were trading gave us a profit of over 900% !!
Imagine investing $7 as the real money cost plus the 50 cents to buy it. 90 minutes later you would have generated over $60 of profit enough to pay
for your whole month of fee.
That is just one option trade on the first day of the month. Yeah, it is August 1, 2022, as I am writing this.
Untold Stories about Brokers’ Restrictions
While other platforms do not charge fees to trade options contracts, nobody is writing about the fcts that there are multiple successful strategies you cannot trade on Webull on Robinhood because of restrictions on Expiration Day.
I know these facts because I coach options traders regularly in my Discord room and those are some of their biggest concerns.
Every time, my suggestion to me is to create an E*TRADE account.
Theat process takes less than 10 minutes, and they are ready to trade after funding your account.
The platform you choose the trade options with should never be a hinderance to your success.
Every so often I hear stories from traders about Robinhood or Webull not allowing them to take advantage of options trading opportunities such as on expiration day when options price get really cheap.
My simple recommendation is to consider an option trading platform such as E*TRADE where such restrictions do not exist.
How to Enable Options Trading on E*TRADE
As a beginner, you can create an options trading account on E*TRADE in just a few minutes.
You will be asked about your years of experience trading options.
Obviously, you may not have that many, but should you have me as your coach, you can leverage my many years of experience so that your account can be approved immediately.
The primary reason I like teaching beginners’ traders options trading from E*TRADE trading platform is the immediate availability of Paper Trading Account.
Another benefit is that you will be able to leverage the many E*TRADE video tutorials I created on my YouTube channel so that your learning can be even faster.
Below is an Example of one neat options Feature from E*TRADE:
Best Stock Options for Investors with Little Money
Over my multiple years trading options, I have acquired an in-depth understanding of option chains.
As such, I will be able to teach you proven strategies that do not require a lot of money to get you started.
Below is a proven for some of them.
Best options Strategies for Beginners with little money
The easiest options strategies for beginners with little money has a name very dear to me.
I call it “Friday No Wahala“.
This option trading strategy is very affordable for beginners and the beauty of it is that it is a simple overnight swing trade.
Can You make a living day trading QQQ?
Hands down, Trading ETFS on Expiration days (Mondays, Wednesdays and Fridays) are the best options for investors with little money.
Why may you ask?
Options are cheaper on expiration days.
I have mastered the art of trading QQQ for big profit on such days.
So will you.
Here is how I do it and will be teaching you ALL the nuances of this successful and powerful options strategy.
Plan of Action to start Trading Options Today
- If you Have at least $1,000 then Go ahead and Sign for an E*TRADE Account at www.etrade.com
- If not, then open an account with Webull and deposit whatever money you have
- Either you are in case 1 or case 2, find my Discord Channel and Sign Up for 10-Baggers Trading System
- Start your Learning on how to trade Options for a Living without needing thousands of dollars
- After you have increased your account to over $1,000 then Go to Step 1!
FINAL Thoughts on How Much You Need to Trade Options
I provided numerous examples of how much money you need to start trading options today.
Furthermore, the very strategies traders like yourself have been leveraging in my Discord Channel will be available to you immediately.
Let’s get your started with Options Trading Today.
Hold a Master Degree in Electrical engineering from Texas A&M University.
African born – French Raised and US matured who speak 5 languages.
Active Stock Options Trader and Coach since 2014.
Most Swing Trade weekly Options and Specialize in 10-Baggers !
YouTube Channel: https://www.youtube.com/c/SuccessfulTradings
Other Website: https://237answersblog.com/