| Any journey starts with a single first step. Everyone | | | | and in a confident manner. Determine what amount |
| agrees that this is true, but what is the first step for | | | | you are going to invest, and set it aside, and stick |
| the beginning option trader? The vast amount of | | | | with it. |
| information can appear to be overwhelming, and is full | | | | Do you Speak the Language |
| of terminology that might as well be ancient Greek | | | | Calls, puts, strike price, margin, leverage, long position, |
| for all the sense it makes. Everyone you meet, and | | | | expiration date, bid, and ask are all Option related |
| every website you visit has some different advice. | | | | terms. If you are unsure of the meaning of any of |
| There are a few things to think about even before | | | | them then you need to go to Option's language |
| you ever make that first trade. | | | | school for awhile. Investing has its own unique |
| What are your Goals | | | | terminology, and you can not afford to be confused. |
| It is important to have some idea of where you | | | | Take the time to learn what everything means. It is |
| want to go before you begin. The field of Options | | | | going to be important to give yourself a bit of |
| trading is large, and there is a lot of variety in it. It is | | | | education in quite a few different areas of trading. |
| better to take a general look at the different types | | | | You are not going to be able to evaluate Broker's |
| of investment opportunities available, and select the | | | | websites, or decide on a personal method of analysis |
| ones that interest you the most. | | | | until the basic framework is in place. And the basic |
| You are going to have to do a lot of research and a | | | | framework is terminology. |
| lot of study in order to be successful, and it is going | | | | Start in First Gear |
| to help if the topic is one that you find to be | | | | You have to crawl before you can walk. Learning to |
| fascinating. Also, you need to have a good idea of | | | | invest your money in any market, and even more so |
| how much time and effort you are willing to invest in | | | | the complex Option Trading market is not the kind of |
| your investment strategy. | | | | thing that is best served by jumping into the deep |
| Options are time critical investments, and if you are | | | | end of the pool right at the start. You are almost |
| only planning to dabble a bit in the market, it would | | | | certainly going to drown. Experience is very important |
| be better to either keep your Option portfolio very | | | | here, and experience is only gained by the actual |
| small, or even to seek a more long term and less | | | | doing. Start slowly and make a few small |
| interactive type of investment. | | | | investments. |
| In For a Dollar or a Dime | | | | It is good to have a sample option trading strategy in |
| One of the most important options trading terms a | | | | place. It should be on a rather small scale involving |
| beginner needs to completely understand is risk | | | | only a small percentage of your available risk capital. |
| capital. Most reputable brokers will advice you to | | | | Once you gain a little confidence, you can increase |
| invest in options with risk capital. Risk capital is that | | | | the amount of your investments. How long this takes |
| portion of your total investment capital that you can | | | | is going to depend completely on you. Remember |
| afford to lose. Long term bonds, savings accounts, | | | | that there is no magic formula here. |
| mutual funds are the places for your retirement | | | | The beginning investor should not be too nervous. |
| income, and your landlord's checking account is the | | | | There may be a lot to learn and it may seem a bit |
| place for the rent money. | | | | confusing, but it is learnable. In the end, it is going to |
| A beginning investor in the option market needs to | | | | be his own intelligence, and his own instincts that are |
| know exactly how much he is willing to invest, and | | | | going to determine his success or failure. Most people |
| once this amount is established, he needs to stick | | | | would ask for nothing else, but to have their financial |
| with it. There are practical reasons for this. One of | | | | fate in their own hands. Remember the words of a |
| them will be investor's personal financial security | | | | wise old investor who once said, "Every Option |
| concerns. If you are overly worried about loss, you | | | | Trader was a beginner at one time, even if for |
| would not be able to make decision with a clear head | | | | some, it was only a few minutes. |