Is Options Trading Recommended for Beginners?

62.58 billion. That’s the total number of futures and options contracts traded globally in 2021, according to data released by the FIA (Futures Industry Association).

If you intend to embark on your options trading journey, follow all the steps mentioned here:

Compared to a simple brokerage account for stock trading, an options trading account usually requires greater capital involvement.

Open an Options Trading Account

Besides, because of the higher complexity, brokers require more information about the trader (their income, liquid net worth, capital preservation or speculation, knowledge of investing, etc.) Therefore, an options trading account consists of a few more steps than a stock trading account.

After successfully opening the options trading account, you must decide on the type of options contract you want to enter.

Select The Options Contract

An option contract is valuable only if the underlying stock price closes the option’s expiration period “in the money,” i.e., either above or below the strike price.

Predict The Strike Price

All options contracts have an expiry date, ranging from days to months to years. This period, too, cannot be conjured up from thin air.

Predict The Option Time Frame

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