How to Download Option Trading: A Beginners Crash Course Regarding Strategies, Day Trade For A Living, Swing, And Advance Trading Option RTF
Walking you through the learning curve of options trading will always start with the most basic move you’ll need to make setting yourself up in a position actually to be able to trade. To do that, you’re going to need an options account. One thing to know before you pick your firm: times have changed considerably over the last couple of decades when it comes to options trading. Back before the internet became such a constant part of our lives, your brokerage firm – or, at least, your representative at the firm – would make your options trades on your behalf and you paid a hefty price for their services. Nowadays, however, you’ll be doing most of your trades yourself. Commission for your representative is thus a whole lot lower than it used to be. While you are learning, feel free to make use of your firm’s services to place and confirm your trades, if it helps you feel more comfortable getting to know the process. With this in mind, there are going to be certain things to look for when you select your firm: • Compare commission prices to make sure you’re getting a great deal. • Make sure the firm has up to date software and is capable of setting up trades quickly and reliably to make sure you get those trades you want at the best prices. • Check out the hours of service to ensure they are compatible with your needs. In these days of online firms, you could be dealing with a firm that’s across the ocean from the markets you have an interest in, or you might find that a firm only makes its reps available for the length of the working day, which might not suit your timing. • Speak personally with the reps at the firm, as these are the people who are going to help you during the process of setting up your strategy. You want someone personable and knowledgeable – and, most importantly, who speaks in terms that you personally find easy to comprehend. • Take a look at the additional services the firm supplies. Many will offer learning materials, guides and even classes or webinars to help you hone your strategies. Even if you feel that you know all you need to know already, there’s no harm in a refresher course or a little nugget of inspiration every once in a while. Once you select a firm, you’ll then need to consider signing a “margin agreement” with that firm. This agreement allows you to borrow money from the firm to purchase your stocks, which is known as “buying on margin”. Understandably, your brokerage firm is not going to allow you to do that if you don’t have the financial status to pay them back. They will therefore run a credit check on you and ask you for information about your resources and knowledge. A margin account is not a necessity for options trading – you don’t use margin to purchase an option, because it must be paid for in full. However, it can be useful as you graduate to more advanced strategies – in some cases, it will be obligatory. If you opt to sign a margin agreement, talk it through thoroughly with the firm as there are certain restrictions on the type of money you can use that may apply to you. Next, you’ll need to sign an “options agreement” – and, this time, it’s an obligatory step. This agreement is designed to figure out how much you know about options and how much experience you have of trading them. It also aims to ensure that you are aware of the risks you take by trading and make sure that you are financially able to handle those risks.
