Options trading definitely requires the right education and the right guidance for any investor who would like to start trading the options market. So, if you are considering joining an options trading course you should consider who to approach. Options attract many investors because of the flexibility it offers however those that succeed are those that have invested in their education prior. Before taking the course about learning the options market you should also find out what type of trader are you. This will help you finding the right strategy that would suit your personality even though trading options has got a much better risk management option than most instruments.
There are options trading course that start from the very basics, like what are options; who uses them and how they are different from share trading. By finding out what type of trader are you, you can consider your risk management throughout the course and when you’re building your trading plan. Covering the basics will take between 30 mins to an hour – remember that you can go over the video courses as many time as required, with the ability for your to pause and take notes. As you go through the concepts of options trading you will be introduced to call and put options. Soon you will get a better understanding of options terms such as exercise price, expiry, and exercise style. Remember to take your time for your education as the foundation of your trading and understanding needs to be right.
As part of your options trading course you will go through options pricing and what are the factors that determine the price of an option and influence it. This also introduces terms such as intrinsic value and time value, and how variables like volatility and time to expiry can affect the price of the option. You will also understand the importance of time decay in option trading. If you have already gone through your investor profile and know what type of trader are you, you will realise how certain aspects of the strategies could apply to your risk management because of your personality type.. This section is where the core of options trading is explained thoroughly.
The next section within your options trading course can be considered as one of the most critical parts of your education – learning about the variety and different types of options strategy that are available for trading. This section is full of different strategies that you should know, allowing you to setup the basics of your options trading. Buy write and spread trading are discussed, which may be two of the strategies where you may elect to start your trading career, using options strategies. The Buy write is also known as a Covered Call. Here also, you would realise that knowing what type of trader are you is particularly useful to help create your trading plan and pick the right strategy according to your risk level.
An investor quiz should answer the question of “what type of trader are you”. As you don’t know what the market is going to do in the future, you should always have a strategy to protect your cash, irrespective of what the market does. Your options trading course will guide you through all this, and set you on the right path to start options trading. The course also makes you aware of the risks involved with trading and how you, as an investor, should have the odds in your favour. Also if you open an options trading account you’ll get access to a demo platform where you can practice before you enter the actual market to trade options.