10 Busted Myths of Options Trading
-
Myth #1: Options trading is only for professional traders with years of experience.
Although it has long been held that trading options should be left to only the most-experienced traders, in recent years this notion has changed.
According to Tom Sosnoff of thinkorswim, "I think [options trading] has become [widely] accepted now. Five to seven years ago it was on the fringe. Ten years ago it was ... an alternative investment. Now trading options with penny wide markets and the ultimate competition for order flow -- it's like trading stocks.
George Ruhana of OptionsHouse agrees. "I think that there's no question that they [options] get accepted more every year -- and especially in a year like last year, where you had some people who had been making money as options investors."
Options trading just for the pros? Myth busted!
Next: You should only trade options in a tax-deferred account.
MORE BROKER ADVICE
Is Your Money Safe From Broker Risk?
How protected is your money if your broker should fail? Find out what your rights are and how to avoid losing money. more
Learning Options Lingo: Contingent Orders
Control your options trades and make them happen exactly when you want them to happen. more
5 Tips for Moving Your Brokerage Account
If you're unhappy with your broker, don't let the paperwork scare you out of making a switch. Learn how easy it is to move your brokerage account. more
The Truth Behind Broker Commissions
Learn what commission rates you should be paying the most attention to, and get three steps to help you find the lowest broker commissions available. more
Brokerage Levels and Option Risk
Options expert looks at the risk associated with trading different option strategies -- covered calls, long calls/puts, spread trading and naked shorting -- against the four levels of brokers' approval. more
Option Approval Levels Explained
It is important to know what level of option approval your account has and what strategies you are allowed to employ at each option approval level. Here is a breakdown of Levels 1 through 4. more
Opening Your Options Trading Account
Learn how to open an options trading account and why you need a margin account. more
Is Your Brokerage Right for You?
To find out if you and your brokerage firm are a good fit, you need to ask yourself a few questions. Take our quiz to see. more
Paper Trading: Practice Makes Perfect
There's no substitute for experience when learning to trade options, and virtual trading can make the lessons painless. more
Options Broker Review: optionsXpress
Learn the pros and cons of this online options brokerage. more
Options Broker Center
MOST POPULAR
- What's Hot: DELL, DHI November 20, 2009
- Sidewinder: MCD, DKS, JPM November 20, 2009
- Options News: SII November 20, 2009
- Sidewinder: CY, ADSK, KG November 19, 2009
- Options for Dummies November 19, 2009
