Neither does the word, “quickly.” Stop chasing that fantasy you are unlikely to be successful unless you are willing to change your mindset and put a lot of time and effort in to your trading. What it does mean, however, is that you are not likely to get rich fast or easily with options unless you are very lucky, but luck has no role to play in responsible stock or options trading. They want to make sure you have enough investing or trading experience to hopefully make good decisions when it comes to options.ĭoes all this mean that you cannot get rich with options? Not at all. There is a very good reason that the U.S Securities and Exchange Commission has qualification rules in place for investors who want to trade options as there is a lot of risk involved. In fact, if you are not careful, you are far more likely to go broke trading options than you are to get rich. Unfortunately, just because something is possible doesn’t mean that it’s likely, or more importantly, that it is risk-free. There is one element that each of these so-called strategies have in common: they are more akin to gambling than to trading. Before you know it, you will be moving into that mansion by the lake that you have always had your eyes on. Use one or all of these strategies repeatedly until you are rich. The key here is to use all of your buying power so that you win the maximum amount on each trade. The more volatile the underlying stock, the more the puts will sell for and the larger your gain will be. Or, if you have a lot of buying power in your account, you can use it all to sell large numbers of naked puts on a company whose stock price you expect to be at or above the put’s strike price at expiration. When your expectation is realized and the underlying stock goes to zero (or close to it), sell the puts and pocket your winnings. If you expect a company to declare bankruptcy, but no one else seems to know about it, then you can buy puts. Rinse and repeat and before you know it, you will be buying that mansion you have had your eyes on since forever.
When your chosen stock flies to the moon, sell your options for a massive profit. Since an option contract represents 100 shares of the underlying stock, you can profit from controlling a lot more shares of your favorite growth stock than you would if you were to purchase individual shares with the same amount of cash. Here’s what you could do if you have cash but not a lot of buying power: you could use all of your available cash to buy calls on your favorite growth stock with the expectation that the stock will absolutely skyrocket before your options expire, perhaps after next week’s earnings report. The obvious next question then is, how can I get rich trading options?
If you’re like most people reading this article, this is probably the answer you were hoping for. But, can you get rich trading options? The answer, unequivocally, is yes, you can get rich trading options. Options are a financial instrument that you can use for a number of different purposes: as protection against expected moves in an underlying instrument such as a stock as a way to use leverage to control more of a stock than you want to buy outright as a way to use your existing investments to earn additional cash and many other uses.
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