Thursday, June 30th, 2016

Where did you learn to trade Options and how long did it take you to get the hang of it?

When I say “where” I mean any good books or websites or strategies? If you have small amounts of cash is best used in penny stocks or options?

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Comments

3 Responses to “Where did you learn to trade Options and how long did it take you to get the hang of it?”
  1. Kinghitz says:

    You _can_ learn options by buying a book, this can get started learning about options. However in my opinion to get a better all round idea of how to trade options in the market you will need mentoring (formal or informal). This can be expensive but I think you will make back the cost of course just by learning risk management and strategies for using options according to the market conditions.

    One company that comes to mind is Optionetics. Go to their website, there is plenty of free information there to get you started. They are not the only company doing this so suggest you look around and due your due diligence on them.

    IMO I think options are better then the pennies. You trade some the best companies with options, limit the risk or make really good money.

    I started using options with $3.5K and built from there.

  2. zman492 says:

    < <>>

    When I first learned about options there was no internet and there were not a lot of books on the subject, so most of my initial education came from by broker. (In those days that was a person you talked to who gave you advice.)

    Since that time I have expanded my knowledge by reading books.

    < <>>

    Years, but I never made any effort to learn what I needed to know quickly.

    < <>>

    There are two excellent spam-free web resources for learning the basics about options.

    http://www.cboe.com/LearnCenter/default.aspx

    http://www.optionseducation.org/

    Once you have completed the free education available at these sites, I still recommend reading at least one good book about options before trading them. Any of the books in the bibliography at

    http://www.cboe.com/Institutional/Bibliography.aspx

    can be considered “good” depending on your level It is best to review several at a large library, large bookstore, or at amazon.com to pick a book appropriate for you.

    My favorites, which may not be the best for you, are

    McMillan, Lawrence G.: Options as a Strategic Investment, Fourth Edition, New York, New York Institute of Finance, 2002.

    Natenberg, Sheldon: Option Volatility and Pricing, Revised Edition, Burr Ridge, Illinois, Irwin Professional Publishing, 1994.

    < <>>

    IMHO, options. With options you can learn what you need to know about the underlying company. with most penny stocks that is difficult or impossible.

    I should add that in general I would recommend that anyone with “small amounts” start by investing in long term traditional (not penny) stock positions.

  3. gampublic says:

    Good heavens – few if any individuals should be doing this, especially with little money. It’s just gambling. Options are inherently a zero sum game, for every dollar made, somebody else has to lose one, in addition to a commission – which makes it a negative sum game, much like Vegas. In the long run, you invariably lose. Most rookies are going to get reamed. Penny stocks are an equally bad idea. Please don’t do this.

    Stick to conventional Stocks, Bonds and Cash. Over time, they invariably rise, as economies generate more wealth.

    Here’s my stock answer to investing rookies. Two suggestions:

    1. Get professional advice from a fee only financial planner. Someone who sells advice – NOT products on commission like a stockbroker does. Fee Only Planners have no reason to give you anything but their best advice, since they want you to be happy and refer friends. And their compensation isn’t tied to what you invest in, eliminating conflicts of interest as much as possible. I think this makes sense in the same way it makes sense to hire a mechanic to fix your car – you just don’t want to spend the time and effort to figure it out for yourself. This is the most expedient method, but is more expensive out of pocket, than DIY, much like a mechanic. It still should be much cheaper than a stockbroker’s loads, fees and commissions however.

    Full disclosure, I am such an advisor.

    -or-

    2. Do It Yourself – Read Books – for investing, my favorite authors are Larry Swedroe, Rick Ferri, William Bernstein, and John Bogle. Basically, they skip over the “pop finance” garbage (most media) that’s simply a distraction, and get down to real professional quality investing while still being accessible to most reasonably intelligent people. If you don’t mind spending the time to figure it out right, and are interested in the topic, this is a perfectly good choice, and less money out of pocket.

    Your Call. Good Luck.

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