How to trade options
There is a lot of mystery around options trading. You may know vaguely what options are, but maybe you don’t really understand what they do and how they can be used? And yet options are in fact not too difficult to learn how to trade. Trading options can be a great way to make money and enhance returns on your investment portfolio. Like any valuable skill, there are good ways to learn and bad ways. You can either learn the hard way or the easy way! So your options trading education needs to be carefully planned to make it as easy as possible for you to start trading options in a safe and profitable way.
How to trade options
You can trade options via a dedicated options broker. There are plenty to choose from and many of them offer great online services for you to build and analyse your options strategies and portfolio. BUT, before you even start to think about trading for real, you need to prepare yourself properly.
You can find online services that will give you tips on which option strategies to trade; when and what to buy or sell. BUT, unless you understand the actual options that you are trading and how they behave, you are putting all your trust in whoever provides you with the tips. And when things go wrong, you need to understand your portfolio so that you can take the right action.
Learning to trade options, the right way
To avoid these risks, you will have to learn some basic options theory. But don’t worry; you do not need to be a PhD in math to understand or trade options. Options are just like any financial asset; they have a price in the market which reflects their current value and this value can change depending on what is happening in the world. That’s no different to any other asset in your portfolio. To learn how to trade options, you just need to understand what can make an option’s value change and why.
Once you understand some of these basics, you can start to think about the kind of options strategies that could make money for you. This is going to reflect your own preferences and objectives. How much money do you want to make? How much risk do you feel comfortable with? Do you want to trade the direction of say the price of a stock, or do you want to trade the volatility of the price of a stock? When you learn how to trade options, you can build amazing strategies that really reflect your own trading style and match your investment objectives, in a way that is really hard to achieve using just stocks or other assets.
Your options trading education ACTION PLAN
So, if you want to improve your investment returns by adding options to your trading weaponry and you don’t want to lose your shirt, try out this options trading education ACTION PLAN.
- Learn some basic options theory. Ideally, watch some option training videos.
- Learn about the option Greeks. These really tell us how option values can change, so it’s essential to understand the Greeks.
- Learn about options trading strategies. Once you understand how options work, you can begin to understand how different option strategies can be profitable in different circumstances.
- PRACTISE options trading on an options market simulator. The most important step you can take in your options education program. Practise trading options BEFORE you risk your capital.
- Only when you have reached a high level of understanding and practised options trading extensively on a simulator, should you begin your real options trading. And remember, when you do start to trade, trade small to begin with.
Luckily, you can get your options education program started right now, for FREE and all in one place. Volcube is the world’s leading options education technology. Via your web browser, you can learn about options trading, watch dozens of videos about options, learn the options strategies AND above all practise trading on the Volcube option market simulator. You can even earn the Volcube Certification in Options and Volatility Trading when your options trading reaches a certain Level. START YOUR FREE TRIAL TODAY and learn how to trade options the easy way, with the technology trusted by professional option trading firms and individuals all around the world.
Volcube is the world’s leading option education technology. It is used by professional trading firms in Chicago, New York, London and elsewhere to train option traders as quickly and efficiently as possible. Learn more.
Volcube : options education technology
The world's leading options education technology. Learn how to trade options and start your Volcube FREE trial today!