Stock Options Revelation
Stock options have officially blown my mind. Memorial day 2016 will forever be marked as a pivotal point in my trading career. On this day, my eyes were opened to the possibility of stock options trading, or rather… the control, lower risk and potentially massive leverage that is involved. What a wake up call. “I once was blind, but now I see.”
All my career, I’ve been a traditional common equities trader. I dabbled very little with futures, only to come back to what I knew was comfortable and profitable. In the years I’ve been trading, I’ve made money. I consider myself to be part of the 10% that has success trading. After the mishaps of the learning curve near the beginning, I’ve watched my account grow at what I believed was a wonderful pace. Yesterday, I learned it wasn’t as fast as I thought.
For some off-the-wall reason, I never thought to dig further into the stock options world. I remember when I first began trading, watching the stock options call/put quotes wondering what the hell all of it meant. Its true, people fear what they don’t understand. After trying to read monitor it all like some sort of Japanese code, I moved on and never came back. Instead, I gorged myself on chart education. Patterns, indicators, I learned to read the candles. I developed a trading strategy for myself based on my tendencies.
Yesterday I began to research stock options. A lot about stock options. I learned about risk management to a great degree. How risk is much more controllable and manageable. And the profits… possibilities of 500%-1000% gains, at a fraction of the risk. I was like….
I tell traders all the time, stick with what you know. This is very true, I’m not going back on it. However, branching out to discover the unknown is almost always a good thing. Don’t be shy about doing so. Once you find something, incorporate it into your strategy. Don’t change your entire way of thinking, just adapt here and there. I think in my case, stock options should be a fairly smooth transition. Not much changing in what I look for, just how I play the trades.
More than a year later, still trading options strong and making way more than I had ever made when trading commons. Losses are for less, wins are for more, and it generally makes trading that much more effective. The trickiest part of about trading options is picking the strike and expiration date of your contracts. Further articles/write-ups will be created to address some inquiries regarding stock options.