New to options trading? There’s no need to worry, we have your easy guide to getting started right here. Whether you are looking to jump in headfirst and start making serious money, or you just want to know what all the fuss is about and maybe make a few extra bucks on the side, we can help you to get started in this exciting field. And whatever financial experience you might have gained in the past, we will get you pointed in the right direction so that you can gain the tools to be profitable. Trading options does entail risk, and there’s always a chance that you can lose money. With some proper guidance and preparedness, you can reduce the risk of this happening.
How to Pick a Broker
There are so many different brokers to choose from, how do you know which one is right for you? We’ve put together a brief checklist here for you. To learn more about the details of this, follow the link provided.
- Is it legal?
- Does the broker have good rates?
- Do they have a wide range of assets?
- Do they have a wide range of trade types?
- Have other clients enjoyed using this broker?
- Do they have learning tools?
- Is the customer service department helpful?
- Do they offer demo trading?
Of course these are just a few of the many things you will be on the lookout for. But satisfactory answers to these questions should help you to get pointed in the right direction and give you the knowledge to know what else to be on the watch for.
Of these questions, the first one is by far the most important. There are, unfortunately, scams out there. These take many different shapes, but one of the most prevalent is a broker that is operating without any sort of regulation. Always make sure that the broker you use is governed by some sort of watchdog body and that they are registered to operate in the area where you live.
Creating an Account
If you’re new to options, creating and funding an account can be an overwhelming task. It doesn’t need to be, though! Most brokers have simplified the process down to just a few simple steps, and you can often be trading in just a few minutes. Key is to remember the risk when you are using real money. This can catch up to a lot of people really quick.
So, what do you need? You need to give your name and email address, plus your country of residence. This is the bare minimum; most brokers require you to give a bit more info than this. You might find that your broker also asks for a phone number and a home address. These questions are not universal, but they are not out of the ordinary, either.
The next step, once your account is created, is to fund the account. Brokers accept a number of different funding methods, but the most widely accepted, and probably the easiest method, is to use a credit card. You can also use a wire transfer, or in many cases, an e-wallet like Skrill.
Making a Withdrawal
It’s important to remember that however you fund your account, that is the method that you will need to use in order to make a withdrawal from your account. Brokers almost universally require you to turn in some paperwork before a withdrawal request can be completed. This includes a copy of a government issued identification card with a photo, a copy of a utility bill that shows your address, and, if you used a credit card, a copy of this.
Many Options brokers have minimum withdrawal amounts, and these will vary depending upon the method that you use. Also, you might be charged a fee for making withdrawals. Usually, brokers allow you one withdrawal per month for free if you have your earnings put back onto your credit card or moved back to an online wallet. Wire transfers almost always have a cost associated with them.
One of the things that many people forget about with options is that it is a type of trading, just set up in a different way. It can be really easy to treat options like a game or like a bet, but that’s not what they are. They are a financial instrument, and need to be treated with the proper respect. If you don’t, there’s a very strong chance that you will lose money. Regardless of what your goals might be, losing money is likely not one of them. Don’t let the fast money make you do anything different. Always keep an eye for ways to improve your skills as a trader. Be ready for anything.
It’s important to set your trading routines up so that you are not losing more than you need to. There are several ways that this can be accomplished, and in this section we will give you some examples of how to manage your risk well so that the inevitable wrong trades do not translate into an overall loss of money.