How To Trade Stock OptionsThinking of stock option investing but don't know how to trade stock options? Here's a piece of advice that will save you lots of money. Don't do it! Put it out of your mind. Stock option investing is a bad idea for most people.
Why Online Options Trading Is Not A Good IdeaBecause options are extremely risky investments. There are way too many TV shows and commercials promoting options trading strategies and courses as if this is something beneficial to the investing public.It isn't. There are lots of firms suggesting that if you just take their options trading course or buy their software you will soon be rich. Though huge gains are a possible result of trading options, it is much more likely that an amateur investor will suffer catastrophic losses. There are several reasons for this: The only way to avoid this would be to use a mental stop. But mental stops are usually a horrible idea for amateur investors because of the experience, discipline and steely nerves required to use them consistently. You would have to monitor your open positions constantly or risk a 100% loss of capital. The average person just doesn't have time to do this and surely this is not how you want to spend your days. Nervously, staring at your computer screen trying (in vain) to guess if the trade will go for or against you. Trust me, this gets old fast.
The Best Options Trading Advice You Will Ever GetThe best options trading advice I can give you is to leave it alone.Trade stocks or ETFs online instead. They are much safer and easier to learn to trade successfully than options no matter how you trade them. Go long. Go short. Swing trade them. Day trade them. Trade foreign equities. Trade IPOs. Heck, trade penny stocks if you want to. Your money will be safer than it would be in options!
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