If you've spent any length of time reading about online option trading, than you've probably seen some get rich quick ad promoting options trading as the key to all riches and glory.
Now I admit, I have earned more than 100% return on my investment several times, but to state that this is guaranteed would be misleading.
So what is online option trading anyway?
Essentially, it's the same thing as options trading. It's just another way to say you are trading options online, usually through an options broker like Thinkorswim or OptionsXpress.
Option trades were once made over the phone through a full service broker. Now with the influx of discount option brokers you can place the same trade online in a matter of seconds with the click of a button.
One thing to keep in mind is that with discount option brokers you have to do all the research yourself. All they do is provide the trading platform for you to trade with.
Here are a few facts that I have gathered over the years as I've traded options.
Fact 1: Sadly, I've seen more people fail than succeed. This is primarily with people who try to "self educate" and teach themselves. But even with people who enroll in courses not everyone does well.
As I tell my options coaching students; be realistic. It would be nice if everyone could succeed, but sometimes things don't quite work out that way.
Fact 2: You DON'T need a lot of money to get started with online option trading.
Most option brokers allow you to set up a demo account (paper trading account) to practice with. You can practice your skills without risking any money.
When it comes to using real money it would help if you had a lot ($10,000 - $30,000), but it's not needed. I once took $90 and bought a stock option and wound up making a $240 profit or 267% return on my money.
And I was only in the trade for 15 days. I admit, it was part skill, part luck.
Fact 3: You DON'T have to be an expert on finance and stocks in order to participate in online options trading
I've led many people down the road to successful options trading and one thing was in common with all of them. They were ALL average ordinary folks with regular jobs. There were no wall street whiz kids or multi-millionaires in my options trading classes.
Fact 4: If you buy a stock option there will always be someone to sell it to. Most people are scared that if they buy an option they will get stuck with it and won't be able to sell it.
What people don't know is that the Options Clearing Corporation ensures that there is always a buyer and always a seller for each and every options transaction (even if they have to take one of the sides).
Fact 5: Trader Travis (me) will "not" teach you how to get rich quick
Even though most of my students are doing fairly well and one even doubled her retirement account I do not teach a get rich quick strategy. It's actually a very boring (yet profitable) 4 step system to trading the markets.
Online option trading is very profitable, but it's not as easy as some people make it out to be. It can actually be rather tricky at times. So if you're in a hurry to make money, don't be.
Just take your time and realize that the stock market isn't going anywhere.
To see real results from real people be sure to check out Michelle's story as it shows what's possible when you invest in yourself and accelerate your learning curve by enrolling in an option trading course.