There are a few different types of option traders. One kind of option trader is very aggressive and known as a “day trader”. Day Traders use a lot of money and are in and out of their trades all day. When you trade this way, you aren’t usually able to hold a position over night since this style requires constant attention. This is an incredibly stressful way to trade. I had a conversation with a day trader who had to work sixty to eighty hours a week in order to trade options successfully. But how successful was he really? If he was having any success and making money, why did he call me looking for new ways to trade options?
The other flavor of option trader is one who trades to make money, but doesn’t spend endless hours every day in front of a computer. There are multiple types of strategies that can be used to trade like this. One of the more popular strategies is called a Credit Spread. Traders do Credit spreads on stocks and on the indices. Whatever way you choose to trade, Credit Spreads are still very risky as they cannot handle the drastic changes that happen in the stock market.
Those were the two more common styles of option traders. However, there is a less common strategy out there where traders trade over earnings reports. This is a very exciting way to trade options and it can actually be very rewarding. The excitement comes from the amount of risk and luck that come into play when you trade this way. Back testing is a good way to help predict what might happen over earnings, but there is still a long on uncertainty involved in this style of trading.
All of the above-mentioned styles involve a lot of risk. There is another type of option trader who is managing his savings account. This type of trader would normally wish to take on less risk than other types. We find two of the lowest risk strategies that she we will ever find with options is the Broken Wing Butterfly and the Unbalanced Condor. These two strategies can allow an options trader to construct trades that begin with very minimal risk. In most cases only 1 to 2% risk is theoretically taken on a given trade.
At San Jose Options, you’ll find a course that specifically focuses on these low risk trading strategies. Option mentoring courses are slowly becoming popular, but San Jose Options has been training students in successful strategies for many years. They take pride and specialize in the Broken Wing Butterfly and the Unbalanced Condors, and their courses are designed to accommodate a trader who may be retired or a trader who wishes to invest with options without the risks other traders have to deal with. To learn safer option strategies, San Jose Options has an amazing options mentoring program and I highly recommend you check it out.
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