In “I want to start [tag]investing[/tag], are stocks best for me” article I mentioned that I wish to learn and start [tag]trading options[/tag] as well. However I have never traded options and I have no idea how it works, how to trade them, and [tag]evaluate options[/tag] to make the [tag]trading[/tag] successful. To learn options I have bought some books and I have opened a [tag]virtual account[/tag].
Since I had some experience with [tag]stocks trading[/tag]; I knew how to evaluate stocks on some level, execute orders and overall how to trade them I could afford to start with a small account to practice the selected strategy. In [tag]stock options trading[/tag] I have no clue how it works, how to do it. This is why I have started by opening a virtual account, so I should be able to try all basics and mechanics in trading first. After I get familiar with basics I will employ some small money and start trading with small money in real trading.
I have opened the account some time ago and just tried something. Here is the result:
Date | Action | Qty | Symbol | Description | Price | Commission | Net Amount |
12/03/08 | Buy To Cover | 100 | BABY | NATUS MEDICAL INC | $12.36 | $14.95 | -$1,250.95 |
10/17/08 | Sell To Close | 1 | .QBUVE | BABY OCT 2008 25 P | $0.00 | ||
10/17/08 | Sell To Close | 1 | .QBUJE | BABY OCT 2008 25 C | $0.00 | ||
10/17/08 | Sell | 100 | BABY | NATUS MEDICAL | $25.00 | $14.95 | $2,485.05 |
09/26/08 | Buy To Open | 1 | .QBUJE | BABY OCT 25 Call | $0.25 | $14.95 | -$39.95 |
09/26/08 | Buy To Open | 1 | .QBUVE | BABY OCT 25 Put | $4.00 | $14.95 | -$414.95 |
I have made $779.20 so far (virtual). However I have no idea how I did it, well I know how it happened by looking at those trades, but I don’t know why I have selected the options as I did and which one was correct, wrong, or so.
My next task is to learn options trading. I will use the virtual account and I will post my results and possible strategies.
I started my virtual trading with $5,000 and here is an overview of the account. I will post this overview the same way I do with stocks.
Options Picks 12/01 – 12/05
No [tag]new picks[/tag].
No new picks.
Existing holdings:
100% CASH
Contribution this week: $0
Starting account value = $5,000.00
Account value = $5,779.20 (without margin)
Buying power = $11,558.40
[tag]Portfolio Gain/loss[/tag] this week = 15.58%
[tag]Portfolio[/tag] Gain/Loss for DECEMBER 2008 = 15.58%
Portfolio Gain/loss since inception = 15.58%
[tag]Annual Return[/tag] (CAGR): 15.58%
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I made a lot of cash trading options in this bumpy market!
I will be linking back I really like your site keep up the good work.
Great information, I will be linking back to you and going to look around at your other posts.