Tonight is an exciting night for me! I make my first profit in trading option! I make an awesome 23.3% return in less than 20 days by holding this ETF EWH. 2 months ago, I met a friend who is a option trading guru, he told me once I understand how the option trading work, I will never go back to trade stock. After briefly listening to his wisdom, I decide to dig in more the subject and learn by just doing it. The result was very rewarding. For those who has never trade option before, let me give you a few ideas to get started.
1) Talk with your friends who has experience on this subject and ask how he/she did it (Remember, your network determine your networth. It's time to build your network and get to know more people with experties in trading option)
2) Go to http://www.888options.com/ for great online option education. Most of the class there are free and very informative. You should gain a solid foundation after taking class over there.
3) Keep it simple. Focus on 1 to 2 strategy to do your first option trading to gain some experience how it works. I'd recommend buying call at a lower price with longer expiration date, and sell it at a later higher price as your first trade. Once you understand the mechanism, you may consider more advanced method like writing call or buying put.
4) With tremendous amount of information online and offline (books) on this option topic, you really don't need to spend huge amount of money to just get started and understand how it works. Learn as much as you can without spending too much money on some ebook or get rich quick program. It's not something you need to have a degree in order to make money out of it.
5) Talk to your broker and apply an account to trade option. I gain tremendous information from my broker when I took the time to visit his office. He give me useful advice and a little booklet that I can read and learn. They're very willing to teach you, because they want you to trade as often and as successful as possible.
6) Just do it. Start small, (keep it less than 500 bucks) just to test water and observe.
Good luck in your learning curve in option trading. It could be a powerful way to leverage your way to wealth!
Tuesday, September 11, 2007
23.3% return in less than 20 days
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2 comments:
Option is a complicated concept for me, how do you personally feel the risk between option and stock?
in fact, i believe the risk in option is LESS than stock. The required captial could be much less than stock, but with the leverage power, return could be skyrocketing that stock cannot acheive.
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