Is Option Trading Right For You?
Trading Options is Best Left to the Pros
I've been an investor for over 20 years. I've worked as an investment banker and a stock analyst. I have studied and passed my CFA and learned how options work. I have purchased both stock and call options when I thought I knew of a "sure thing". I have watched friends and colleagues use options to both hedge investments and to try to bolster their portfolio returns. From all of this experience, I can honestly tell you one thing about options and trading in options - it is risky and it is better left to the pros.
Now that's not to say that you can't become a pro. Thousands of people trade stock options, futures, forex and even binary options. In fact, there are thousands of trading platforms and online courses that can teach you how to trade like a pro.
If you are looking into option trading then you are probably not using them to hedge your portfolio or to manage the risk of your assets. You are probably looking for a way to make some money. And from most of the commercials I've heard and seen on the business radio and TV stations, they promise you lots of money. It's not uncommon to hear someone telling you how they make millions of dollars but now want to share their system with you. Does that even make sense? If I made millions per year, I surely wouldn't tell everyone on the radio how to do the same.
If you're looking to get into options trading. I suggest you sign up for a free trial at one or more trading platform sites. Choose some that offer free training or mentoring. Or better yet, check your local connections to see if their is a group that meets locally and shares their strategies. After all, the first thing you need to make money trading options is really a strategy. That is what these sites and programs can offer you.
The second thing you'll need is software. Fast and easy to understand software can help you make the decisions that can generate the money you're hoping for. Choosing the wrong platform can also cost you. If you're looking for even quicker returns, you may want to learn more about binary options trading, which is a relatively new type of trading platform that takes some of the guesswork out of options by only offering two (hence the name binary) outcomes. You either make money or you lose money.
The nice thing about many of these options trading platforms is that it doesn't take very long to see if you're going to make money. I recommend you start with a simulation and then only sparingly invest your money. Make sure that you know the risks and have mastered the platform you are using before you start making big bets - in other words, don't invest like a pro until you've become one.