1) Open a paper trading account FIRST before you put real money in. Don’t listen to those that say you NEED to put in real money to get experience. Paper trading is using “real” money, just that it is not yours.
2) Familiarise yourself with the platform, strategies(covered call, cash secure put, credit spreads, debit spreads, wheel strategy, synthetics), deltas, flow and technical analysis. You need to be able to develop the muscle memory to immediately recognise the figures to make a data driven decision.
3) Understand that options allow you to use leverage (buying or selling contracts that let you control the underlying shares in multiples of 100). You can make more money but lose more too.
4) Consume content online from experienced traders. Here is a list of channels on YouTube I watch: projectfinance, inthemoney, tastytrades, brad finn, Lee Lowell and my life of learning.
5) Don’t buy out of the money options or sell in the money options and paying more or taking less for TIME is always better in terms of risk management.
7) As a beginner start with Covered calls, cash secured puts and the wheel strategy. Once you are extremely comfortable, you can look into more advanced strategies.
8) Options should never be the bulk of your portfolio. Between 10%-20% (can be more or less but this is MY preferred allocation). You should always your have your long term main holdings so that you can have margin to enter into bigger trades.
9) Learn about option margin, it is not the same as stock margin. Margin sounds scary but it is really not once you know how to utilize it. Don’t OVER utilize and ABUSE it.
10) Learn when, how and why you should close option contracts to secure your profits.
11) Learn the importance of rolling options.
12) Lastly, Practice, Practice and Practice. Not other way around it. You can afford to lose money in a paper account in order to gain experience, but not in a live one. Good luck.
1) Open a paper trading account FIRST before you put real money in. Don’t listen to those that say you NEED to put in real money to get experience. Paper trading is using “real” money, just that it is not yours.
2) Familiarise yourself with the platform, strategies(covered call, cash secure put, credit spreads, debit spreads, wheel strategy, synthetics), deltas, flow and technical analysis. You need to be able to develop the muscle memory to immediately recognise the figures to make a data driven decision.
3) Understand that options allow you to use leverage (buying or selling contracts that let you control the underlying shares in multiples of 100). You can make more money but lose more too.
4) Consume content online from experienced traders. Here is a list of channels on YouTube I watch: projectfinance, inthemoney, tastytrades, brad finn, Lee Lowell and my life of learning.
5) Don’t buy out of the money options or sell in the money options and paying more or taking less for TIME is always better in terms of risk management.
7) As a beginner start with Covered calls, cash secured puts and the wheel strategy. Once you are extremely comfortable, you can look into more advanced strategies.
8) Options should never be the bulk of your portfolio. Between 10%-20% (can be more or less but this is MY preferred allocation). You should always your have your long term main holdings so that you can have margin to enter into bigger trades.
9) Learn about option margin, it is not the same as stock margin. Margin sounds scary but it is really not once you know how to utilize it. Don’t OVER utilize and ABUSE it.
10) Learn when, how and why you should close option contracts to secure your profits.
11) Learn the importance of rolling options.
12) Lastly, Practice, Practice and Practice. Not other way around it. You can afford to lose money in a paper account in order to gain experience, but not in a live one. Good luck.