Looking to trade options as a beginner but do not know where to start?
Look no further than this Must-read articles about trading options as a beginner.
I will answer all of the questions you are wondering about plus provide hands-on insights based on my experience coaching several options trading beginners.
Table of Contents
Is Options Trading Good for Beginners
The first step to trading options for Beginners is to learn how to what you need to know without losing money.
Once you have enough knowledge, trading options for beginners can be very lucrative as it provides you a great lifestyle.
You get to make money anywhere in the world while on your own schedule.
No supervisor to boss you around all day or management that does not understand your specific needs.
For those seeking financial freedom, I encourage you to treat options trading as a business where you are the CEO of your destiny.
Can I trade Options with $100?
Ah, the famous questions options traders have: Can you do options with little money?
Yes, yes and you should if you are a beginner because your learning does not need to cost you that much money.
I have personally traded options for $2 and made money so $100 is more than enough.
As I am writing this answer on Wednesday June 22, an option contract I was trading from $5 (this is real money as options traders will call this one a 5 cents contract) went as high as $103!
This trade took less than 75 minutes.
The return is a massive (103 -5) = 98 divided by 5 equals 1960%.
Below is the chart of the option contract.
Other Examples of cheap options contract traded for less than $20
In fact, it is not that difficult for me to share very affordable options contracts.
The reason is because I teach traders in my Discord Room how to do this all the time.
Hence, here are a few examples of options trades that cost less than $20 in real money.
Example #1: July18 2022 | QQQ 292 Puts Day trade went from 16 cents to $3
This means that in real money, you would have invested $16 to make $300 or 1775% return.
Such a successful trade is called a 10-Baggers because the profit is over 900%.
Below is the Option chart of that spectacular successful option day trade.
Oh yeah, we can include Example #2 as seen above as the end of the Day trade on QQQ from 5 cents to 15 cents.
That option trading strategy is another technique I teach as part of the 10-Baggers Trading systm.
The contract cost was $5, and we made $15 in just a few minutes.
Example #3 : July 20 2022 | QQQ 304 Calls form 9 cents to $1.02
On this day, the day trade investment was a mere $9.
It took an hour for those contracts to move all the way to over $1.02 which is another 10-Baggers.
Take a look at the Option chart below as captured in my discord Room.
You can find several videos on my YouTube Channel depicting all the successful options trades we have traded with cost less than $100.
Here is one of them.
What is the best way to learn Options trading?
The best way to learn options trading is to invest time and money in your education.
Just like how doctors or lawyers go to specialized schools to master their craft, such should be your approach for options trading.
Of course, you can start with free material on the internet (this blog is a pretty place to start if you ask me).
However, you will want to complement that knowledge with hands-on training from a mentor.
1vs 1 Coaching can eb expensive but it does not have to be.
Should you really be motivated to lean options trading, I am sure you can spend a day finding the right coach for you without spending too much money. (Hint: The person writing this just said earlier that he teaches Options Traders in his Discord room !)
Is trading options just gambling?
If trading options is just gambling, then it has to be the most intelligent form of gambling.
Also, since options derive their value from the movement of the stocks, therefore the stock market is itself just gambling.
This would mean that even traders who really on fundamental analysis (study of a company financial metrics) are purely gambling when they decide to invest on a given stock.
The reason some beginners may think that trading options is just gambling is simply because they do not yet understand the mechanics behind trading options.
One of the recurrent questions most beginners ask me is how I know when to enter a trade.
Then after they get to learn basic entry techniques, they feel more confident.
Consequently, trading options become a science rather than just gambling.
How much can a beginner make trading options?
By my experience most beginners tend to get lucky at the beginning of their trading careers.
You know, there has to be some truth into beginners’ luck after all.
A beginner can make just as much money as an experienced trader if such beginner is trading a proven strategy.
Options trading is scalable meaning that if a beginner has a small account, he/she can start with low risk and as the trader gains confidence, he/she can increase their risk and thus make more money.
The challenge for options traders in general is consistency.
This means that not just being lucky on one trade but achieving a level where the wins are predictable.
In other words, when the conditions to enter the trade are met, you know that there is a high probability of winning.
In that case, the sky is the limit. you can make $1000, $5000, $10000 or more per month based on the risk level you are willing to take.
Can I make a living trading options?
After you have learned how to trade options properly, you can make a living trading option as long as you treat it as a business.
This means the same attention to details and dedication you will use to become successful at any other profession will be required in order to make a living trading option.
The beauty of making a living trading option is that you get to have a great deal of flexibility in your schedule.
You control when to trade and when not to trade.
Your income when making a living trading option is not a function of how many hours you are trading!
Unlike a regular job where you can only make money a limited amount of money if you show up for 8 or 9 hours each day, options trading gives you the luxury to trade for an 1hour or 2 and make whatever amount of money you would like.
What is the most successful option strategy?
The most successful strategy that I trade is called the Friday “No-Wahala.”
It is an overnight swing trade of very cheap options contracts.
It can provide very high profits like this recent one on FCX of over 700% in less than 24 hours.
Traders in my Discord enjoyed it so much because once you understand the methodology behind this very lucrative options trading strategies, you will not want to trade anything else.
What is the safest option strategy?
The safest option strategy is one for which your Risk is minimal.
For me, it has to be my Friday No-Wahala strategy because the Risk is small while the profits are very high.
What is an option trader salary?
Option traders do not have a salary per say.
In Options trading, your income depends on how successful your options trading strategies are.
I traded a system that is very low risk with high rewards where we see 10-bagegrs on a consistent basis.
I recently published how much money can you make Day trading Options to illustrate that $100,000 per year is feasible.
I am not suggesting it is easy but with sound discipline and the right education, you can achieve that level of income and more in
Here is the full video summary of How much money an option trader can make.
Can you become a millionaire trading options?
Yes, it is possible to become a millionaire trading options.
The first step is to learn a successful options strategy.
The gain confidence by trading it consistently with a small number of contracts at first.
Eventually, as you make more money you will scale by buying more contracts.
There is an advantage when you are trading large sum of money in options trading because you can settle for very quick profit.
In my model of a successful options trader who generate $100,000 yearly at first, scaling out should make you a millionaire in just a few years.
How long does it take to learn options?
Options trading is not an academic discipline.
So, one should not ask how long it takes to learn options like one ask How long does it take to become a paralegal for instance.
I have been teaching traders how to trade options since early 2020.
Even for a beginner trader, I can teach you the basic of options trading in 5-6 hours.
Now how long it takes you to process that information is totally depends on your sole ability.
So realistically, you can devote 2 months to learn the theory of options trading, followed by a month of paper trading and you should be set to start making money trading options.
Is it hard to make money trading options?
It is not hard to make money trading options if you have the proper teaching.
I have seen new options traders in my Discord make money with our strategies in the first week of trading.
Therefore, it is definitely possible to make money options without the typical elongated learning curve that tends to discourage most people who try.
Are options better than stocks?
Why trade options instead of stocks?
Because options do not require as much money to trade as stocks.
Of course, one may argue that you can trade penny stocks but what is the probability of making 100% profit each day by trading those
types of stocks?
Trading stocks is more expensive for beginners who do not have enough capital to trade initially.
Recently, there has been a number of 20:1 stock split on the likes of AMZN, GOOG, TSLA, AAPL or NVDA that have made stock trading more affordable but still you will need at least $25,000 to consider trading anyone of those stocks.
On the other hand, I can teach you a strategy to trade anyone of these options with $20 or even less.
How do you guarantee profits on options?
There is no such thing as a guarantee in life except taxes and death.
Is that a quote?
Really, more seriously, the way to guarantee profits in options is to trade proven strategies that have been tested over different market conditions.
This mean that such strategies can make you money options trading when the market is bearish as well as when the market is bullish and trading at record high.
Once you find such an option strategy, then you can protect your gains by using a trailing stop for instance.
What percentage of options traders make money?
The statistics on this question suggest less than 10% of options traders make money.
However, this is so broad because a great dela of so-called traders give up after the first week or month.
The reason for this phenomenon is that people are seeking instant gratification.
I have seen numerous traders come to my Discord room and realize trading options is a full-time job if you want to earn the type of money to replace your day job!
It is not a get rich scheme where you throw money at the market and it spits out millions of dullards instantaneously.
Therefore, the question on how many traders are successful should not influence your decision to consider options trading at all.
Your unique circumstances and skills are very different from the mass numbers that make up the above statistic.
which is better forex or options?
I have never traded Forex, but I know a bit about it.
There are tons of videos of Forex traders making it big on YouTube.
Albeit, same for options trading.
However, my longtime experience trading options makes me think that options trading is better.
Now, the skills to trade options such as the ability to read a stock chart are just as valuable in forex trading.
What happens if you buy an option in the money?
When you buy an options in the money and the position starts moving in your favor, you will be making at least 60 cents profits per contract for each $1 movement of the underlying stock.
This means that in the money contracts appreciate faster than out of the money options contracts.
Also, the theta decay is much smaller for in the money contract thus you will stand to lose less money should the stock remains stag
How can I make $1000 a week trading options?
If you are already making money trading options, the key to making $1000 per week or more is to scale your strategy by buying more contracts.
The simple plan could be to make $100 per week consistently for a month.
Let’s call it Month 1.
Then on the subsequent month #2, you should aim to make $250-$4300 per week y trading higher number of contracts or closer to itm contracts.
On week #3, your weekly goal should be at least $500 which you now have from the previous months profit.
This is what I call scaling up your options strategies in order to increase your weekly or month gains.
Who is the richest option trader?
Buddy Schwartz was a Wall Street Champion Day trader in the 80’s
You can find his story on his autobiography “Pit Bull”: Lessons from Wall Street Champion Day Trader.
What is the most profitable call option?
I have seen a call option pay as much as 5000% in my Discord.
That is known as a 50-baggers.
Here is a recent screen capture we traded on #Dash options for 30-baggers.
When should you buy options?
You should buy options when your analysis tells you a stock has a high Probability of moving.
If the stock moves up, then you should buy calls instead if it moves down, you should buy puts.
Part of your learning how to trade options will give you knowledge how to recognize when a stock is bound to move up or now.
This is done through technical indicators.
Should you not have a strong conviction about the direction of the stock, it is wiser to wait until you get a clear confirmation.
Or you can set up a trade to cover both sides.
Indeed, you can buy Calls and Puts simultaneously.
This strategy is called a strangle (if the strike prices are different) or straddle if the strike prices are identical.
Do you need a license to trade options?
No, there is no license needed to trade Options with your own money.
But if you consider trading for a proprietary firm, they will give yiu the requirements in order to trade with their money.
Such requirements may involve passing the Series S7 exams.
Do you need a degree to be an options trader?
No, no degree is needed to trade Options with your own funds.
How do options work Example
One of the best illustrations on how options work is through trading an option momentum.
You buy an option based on your chart analysis of the direction of the stock.
You start making money then you can take partial profit to ride the remaining contracts.
Here is a screen capture of such a trade on NVDA Call options.
Can I buy a Call Option today and sell tomorrow?
Yes, you can buy a call option today and sell it anytime you want before its expiration date.
You can decide to be in that trade for 2 minutes, 5 hours or 7 days as long as there is rime left before Expiration.
When you buy a call today and plan to sell it the next day, this is known in options trading as an overnight swing trade.
This strategy can be very successful if you set it up properly.
Here is my step-by-step technique for very reliable Swing trades:
- Identify your stock for the swing trade – I like to use current day momentum from Finviz or Successful Trade Alerts
- Choose the primary position and size up the number of contracts based on your budget -let’s say calls with $100
- 3. Protect your position with a hedge on the opposite direction – allocate 30% of the primary position
Do Day Traders use Options?
Yes, day traders use options trading all the time.
This is the quickest way to make money trading options.
If the underlying stock is moving during the duration of the day trade, then the option will be making a lot of money.
On a day like Friday expiration, if the stock move by 1.5%, the same day option can move 100% or more.
FINAL THOUGHTS On Options Trading for Beginners
I answered most of the questions options trading beginners have regarding the potential and opportunities.
In hope you will find it encouraging to take on this life changing endeavor.
In the meantime, feel free to send me any further questions directly on this page or my direct Email.
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/