The first thing that you’ve got to do when you’re looking to begin trading in stock options is to read all that you can find on the topic. Stock options aren’t stocks. Trading in stocks doesn’t qualify you to trade in options by default. If you ‘d like to be successful, see what others have to tell about the matter and learn as much as you can from as many diverse sources as you can.
This means doing internet research, talking to those who trade in stock options, reading books on the issue, and possibly even buying software that is designed for stock options traders to see what they’re using and what they require to know. Next you’ll want to build up your experience by ‘trading on paper’ for a while.
One of the most effective reasons why most traders prefer options trading is its single way of trading. If you could possibly overcome your inner thoughts and still have time to trade daytime, you can opt to day trade or momentum trade options. Nevertheless, you might pick swing trade options if you wish to put something on a trade then sell it few days or weeks after for a higher price. Another one to try is position trading for mathematically inclined traders wherein you ‘d like to be placed for predictable income that has been predetermined.
Paper trading options account
They are the four major traditions to trade options: day trading, momentum trading, swing trading and position trading. It is best that you take a decision on the most appropriate method to follow that involves much of your interest and time.
Stock option trading can be a fun and profitable adventure, but you should go into it fully prepared, as well as with the knowledge that you could lose money just as well as you can make it, especially at first. Keep that in mind and study hard, though, and you’ll soon be trading options like a pro on the market.
Where can I open an Options demo account, to play around with, and simulate real trades online?I just want to do some practical training/paper trade, until I'm ready to go live with a real Options account. any ideas?
The Chicago Board Options Exchange (CBOE.com) has a "Virtual Trade Tool" – "designed to let you test your trading knowledge and market savvy without putting any money on the line. " http://www.cboe.com/tradtool/virtualtrade.aspx I also agree with the first answer – some online brokerage firms also have "simulated trading". "YadaYada" mentioned OptionsExpress ( http://www.optionsxpress.com/ ) – there is also ThinkOrSwim ( http://www.thinkorswim.com/ ) with a "paper trading application" ( http://www.thinkorswim.com/tos/displayPage.tos?webpage=paperMoney ). The advantage of using a simulation account with an online brokerage is that the paper-trading software probably looks like the real-trading software for that brokerage, and you can determine whether you like their software or not – and ease-of-use can be just as important as low commissions!
Many brokerages have this ability. I'd start w/ optionsxpress. They're a great firm and have virtual trading as well. Hope that helps!