Options trading has, for years, enticed and seduced many people into learning about this relatively unknown form of investing. Stock options are gaining popularity, but the mass population is still not fully aware of their existence. Now that I’ve experienced my own 300% returns on my money, I’ve set out to tell the world about options trading.
The first lesson I will share with you is that when you tell people you’re learning how to trade stock options, their responses will vary. Some will have a vague idea, or think you’re talking about employee stock options. A large majority will tell you that options trading is risky and should be avoided.
Don’t take it personally. They’re just looking out for your best interest.
Many people discouraged me from learning how to trade stock options. I’m glad I didn’t listen because trading stock options has changed my financial future for the better. Learning how to trade stock options was a struggle at first, but over the years I’ve managed to break options trading down into 7 simple steps.
I’m not the original author of the 7 steps, but I have noticed that all successful options traders follow them. Here are the seven steps:
7 Step Process of Trading Stock Options
Finding Hot Stocks: let’s face it, finding hot stocks that are ready to explode is what every trader is looking for. Combine that explosive price movement with the potential gains of stock options and you have a winning combination.
This significant initial step constructs the establishment of a fruitful exchanging business. You can’t discover quality exchanges on a reliable premise unless you have good quality stocks that deliver these exchanges. I use the Investors Business Daily to find my stocks. They’ve created their own proprietary formula for finding the best stocks.
Creating Your Watch List: your watch list is like your pot of gold. It will overflow with endless trading opportunities. This list is your 50-100 best stocks.