Can I Make a Living Trading Options?
There are so many promises out there when it comes to making money in the stock market that many people are wondering, “Can I make a living trading options?”
And the simple answer is, “Absolutely!”
Many of the people who follow our weekly options trade alerts inside “The Empirical Collective” do just that. Some have even used our trade alerts to generate monthly income to replace their job.
Now, some still choose to keep their job. Who knows? Maybe they really like what they do, or just enjoy receiving yet another paycheck. But as my team and I use a swing trading style, it allows them place trades around their schedule. So they don’t have to stare at their computer screen all day as if they were day trading.
So this form of trading really makes for a fantastic way to make money. Especially when our trade alerts have a win rate over 94% and an average return of over 24% per trade.
Can I Make a Living Trading Options?
Now, nobody will ever have a 100% win rate without there ever being the threat of losing money.
It just won’t happen.
Well, at least not unless the artificial intelligence trading programs learn and develop to the point of perfection. You can see more here.
But until that happens, you’re going to have to settle for something less than 100%.
Now, one thing that can decrease your odds of success when trading is just how complex your trading strategy is.
Typically, the more complex your strategy is the less effective it will be. This is because it’s hard to replicate it reliably over and over.
Complexity can be hard to systematize.
Which is why it’s best to try and keep things simple.
And for many people they find trading options to be complex. Namely because the concept is a little more involved than just buying or selling stocks.
Then if you add some more complex options trading strategies to the mix, it can be a recipe for disaster for most traders looking to make money by trading options.
That’s a big reason why we use simple, directional options trades inside “The Empirical Collective.”
While we have used more complex option strategies in the membership area, we don’t leave anyone behind. Especially when it comes to making money or being able to make a living trading options. So we keep things simple in the options alerts that we give out. And right now we do that by only buying calls or puts.
That isn’t to say that we won’t ever expand our alerts to include other ways of making money with options. (Like selling weekly put options for income.) But for now we’re keeping it simple and accessible to the vast majority of traders out there.
Some traders would argue that buying options isn’t as effective a strategy. (But I’d say that our win rate and average return per trade would prove otherwise.) But in order to employ more advanced options strategies it requires a lot more trading capital.
Once you want to trade advanced options strategies, your online broker will require more cash in your trading account. This is so you have more money available to cover any potential losses.
And for more people who are trying to make money trading, this puts using these strategies out of reach. After all, if they had a lot more money to invest, their need to generate income wouldn’t be as great.
But like I said, in the near future we may start adding these sorts of alerts to our membership area for those who wish to follow them.
The thought process is that even if all of our members can’t follow those trades, they can still observe and learn from them so that one day in the future (IE once they’ve made enough money with our simple option trade alerts) they can invest more and start trading using the more advanced option strategies.
Trading For Income – Some Strategies
As I briefly touched on – you can sell weekly options for income (thus giving you a weekly form of income) but in order to do this, you will need a fairly large trading account in order to make a weekly amount large enough in order to make a living. And as I also mentioned, your online broker is going to require a large amount of cash invested if you’re going to be selling (especially what is called “naked” selling) options.
Rather than selling naked puts, you could sell what is called “covered calls.” In this case, you would buy a certain amount of stock and then sell call contracts equal to the number of shares you bought in order to generate income. So if you bought 200 shares of stock, you could sell 2 put contracts.
This, though, requires a lot more trading capital as you’ll have to have enough in your account to cover the purchase of the stock and then enough money in your margin account to be approved to sell the calls.
You could trade what are called “Iron Condors” where through a combination of buying and selling calls and puts you generate income if the stock trades within a certain range. For more information on exactly how to do this, you can get the specifics of trading them through our product “Clockwork Paycheck System” here, or you can consult Samuel Goldman’s book, “How to Make Big Money Fast Trading Iron Condors.”
Trading iron condors are great if the market or a certain stock has been trading within a certain range and as your losses are limited (more than if you were to sell calls or puts on their own) your online broker typically requires less money put into the account before they approve you to trade iron condors.
So there are a lot of different ways that you can generate weekly income using options that you can’t if you try to just trade stocks.
But for our purposes inside “The Empirical Collective”, the core of what we do is focused on simple directional options trades to help people learn and get earning money as quickly as they can.