How do I start trading options?

To start trading options you first need a brokerage firm that offers options trading and clearance to trade options. If you've got a retirement account, such as an IRA or a 401 (k), you can actually trade options in it. In fact, all you need to do is contact your broker to get it converted for options trading.

How much does it cost to trade options?

$0 for stock/ETF trades. Options are $0.50-$0.65 per contract, depending on trading volume $0 commissions for stock, ETF, options, and cryptocurrency trading (small markup is priced in) Once you're prepared to explore the world of options trading, you will need to research the brokers with which you can open an account.

What makes options trading so profitable?

Because you're buying the right to buy a stock, options trade for pennies on the dollar relative to the share price of the stock. This leverage - the ability to use a small amount of money to control a much more expensive stock - is what makes options trading so profitable.

What are the different types of options trading strategies?

Some basic strategies using options, however, can help a novice investor protect their downside and hedge market risk. Here we look at four such strategies: long calls, long puts, covered calls, protective puts, and straddles. Options trading can be complex, so be sure to understand the risks and rewards involved before diving in.