Career in Option Trading
After equity, options are also fascinating. If you are interested in making career in options then you can consider making a career in it. Here, we will talk about how you can become a professional, trader in options.
In option trading, investors' deals in option contract, which means that he/she will buy or sell a certain number of shares at a certain price on certain date in future.
Here we will learn more about what options are and how they work and how you can see your career in options.
Major things to know-
1. Who is an option trader?
A person who buys or sell option contract is an option trader. For making good money, people now understanding options as well, some of them do it for thrill and some for learning about the strategies of the options.It is a step by step process of learning different types of options, its strategies, its valuation and risk and then starts the trading online.
2. How can you become an option trader?
Unlike equity, in options you need some technical understanding of the option contracts to start trading and should have basic knowledge of financial markets and investment analysis.Books and online content can also help you to understand the options well.
Related: learn option trading in ICFM (institute of career in financial market)
As I have discussed about the step of learning, here are some:
a. Learning before earning
Foremost important thing before start trading is to learn how to trade in options. In the market info is too much to handle and which option to pick for trading. Watch videos, read books, sign up for online or offline classes, discuss with experienced traders.
b. Research about the company you are interested in
The more information you will collect and know about a particular stock or option, the better will be the profits. Use different sources of information to analyze the stocks and options you are trading for. Check company news, trends, headlines and web pages about more information related to that stock.
Consistently checking the status of the company will provide you the edge regarding how good or bad you're trading plan maybe.
c. Learn option contract specifications
When you are trading in options, you must know the minute specification of trading to avoid losses. Specification include, type of option (call or put), strike price, expiration date and premiums. We can find these details on the NSE and BSE websites.
d. Learn option trading strategies
When we trade in options, it is highly risky to trade naked positions without hedging. So it's important to understand certain basic strategy to begin and play safe. Some popular option strategies include buying calls and puts, using limit orders and setting stop losses. By practicing the strategies, you will become a better trader soon.
e. Aware yourself about the risk in options
Option trading is risky and you face the risk in buying and selling both options. You will lose invested amount if the option does not expire as expected. Make sure you understand all the risks involved in option trading. If you follow the right strategy and have sound judgment on the prices, so you have a good chance to make a good profitable career in options.
f. Get some training through paper trading
Trading comes with experience; you need a lot more to start making money in real. So try paper trading.Paper trading is so important in learning how to trade in practical life without any risk of money. So don't go for direct live trading in options without any earlier experience.
g. Gain trading experience
After getting experience and knowledge of specifications in options now you can start trading online. You can start the investment with 10,000 to 1,00,000, when your experiences increases you can increase your amount of your choice. Get in touch with professional traders who are into this profession since long.
So before going for direct trading, first follow the above steps. For practical knowledge and trading experience join ICFM (Best institute in Delhi).
ICFM offers you live trading platforms and specialized software, and full time guidance of experienced traders.
