In the past decade, online trading has become more accessible than ever before. A wide variety of platforms and services have emerged, making it possible for anyone with an internet connection to get involved in the markets. This has led to a surge in the number of people trading options, and many of them have made a killing. (Including many who have followed the trade alerts from The Empirical Collective – the company that I feel is the best option trading service as they offer the most value for the money.) And with that in mind, I’ve come up with a list of some of the best option trading success stories.
You don’t need to have an extensive background in finance or Wall Street experience to be a successful options trader. In fact, many of the most successful options traders are regular people who’ve been able to achieve extraordinary results. In this article, we’ll take a look at some of the best option trading success stories from average traders who have made millions.
The Best Option Trading Success Stories to Inspire You
The Richard Dennis Trading Options Success Story
Richard J. Dennis, a Chicago-based commodities trader who was born in 1949, earned his name in the business world. He apparently gambled his way to a $200 million fortune over ten years. Dennis was a collaborator on the fabled Turtle Trading experiment with William Eckhardt.
After teaching his rules to a group of individuals, Dennis would arrange for them to engage in real-world trading. Dennis actually gave the traders his personal money to trade because he was so confident in his theories. It took two weeks to train the new recruits, and then he would repeat the process. He referred to his students as “turtles” after thinking back to the Singaporean turtle farms he had visited and concluded that he could produce traders just as rapidly and successfully as farm-raised turtles.
The Jesse Livermore Option Trading Story
Jesse Livermore, who was born in 1877, is one of the most successful traders that few people are aware of. In fact, Edwin Lefèvre’s biography of him, Reminiscences of a Stock Operator (1923), is regarded as a must-read for all traders, as it merits more than just a passing nod. Jesse Livermore’s net worth peaked in 1929 at $100 million, or nearly $1.5 billion in today’s money.
Jesse provided a straightforward trading strategy where he would observe critical points before making a trade. When the points are in play, trade them with a cushion while moving in line with the market as a whole.
He would let the price determine his course of action, while trying to hold profitable positions until they began to turn against him. He felt it was important to avoid trading there are no obvious trades and that losses should be kept to a minimum.
The William Delbert Gann Option Trading Story
W.D. Gann is renowned for his use of geometry, astrology, and prehistoric mathematics to forecast financial market occurrences. He created the indicators, master charts, and Gann angles for technical analysis.
Gann’s activities in October 1909 was mentioned by Richard Wyckoff, a reporter for Ticker and Investment Digest in 1909. 264 out of the 286 trades that Gann made in various stocks—on both the long and short sides of the market—resulted in gains.
The Jim Rogers Option Trading Story
The chairman of Rogers Holdings is James Rogers Jr., who was born in 1942. In the early 1970s, he and George Soros co-founded the Quantum Fund, which saw a stunning 4,200% return in just 10 years.
Rogers is well-known for both his books chronicling his daring global journeys and for making the correct bullish prediction on commodities in the 1990s.
What is Option Trading?
Options trading is a type of security trading that involves the buying and selling of options. Options are derivative contracts that give the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a certain date.
Options trading can be a speculative activity, as it allows investors to bet on the direction of an underlying asset’s price without actually owning the asset. However, options trading can also be used for hedging purposes, to protect against loss in other investments.
Successful options traders often have a good understanding of technical analysis and market sentiment. They also know how to manage risk by using strategies such as stop-loss orders and limit orders.
What are the Benefits of Option Trading? – Ways to Increase Option Trader Success Rate
Option trading can be a great way to make money, but it takes time and effort to be successful at it. Here are three benefits of option trading that can help you make money:
1. You Can Control Your Risk
With options, you can decide how much you’re willing to lose on a trade before you enter it. This way, you can limit your losses and protect your capital.
2. You Can Make Money In Any Market Conditions
Whether the market is going up, down, or sideways, there’s always the potential to make money by trading options.
3. You Can Get Started With Relatively Little Capital
Unlike stock trading, where you need to have enough money to buy shares of a company, with options you only need enough money to cover the premium (the price of the option contract). This amount can be anywhere from a few dollars to a few thousand dollars, depending on the price of the underlying security.
4. You Can Use Leverage To Increase Your Profits
Since options are a derivative of the underlying security, you can use leverage to magnify your gains. For example, if you buy an option on stock worth $1,000, and it increases to $5,000 in value, you would have a 500% return on your investment.
5. You Can Also Use Leverage To Cut Your Losses
If the underlying security moves against you, you can sell the option before it expires and limit your losses.
What are the Risks of Options Trading?
When it comes to option trading, there are a number of risks that need to be considered. However, with proper risk management strategies in place, these risks can be successfully mitigated.
One of the biggest risks when trading options is the potential for losses to exceed the initial investment if you sell options. This is why it is important to have a well-defined risk management strategy in place before entering into any option trade. (Or you could just stick with buying options, as they do inside The Empirical Collective.)
Another risk to consider when trading options is the possibility of not correctly predicting the market direction. This can lead to losses if stop-loss orders are not in place.
Finally, another risk that needs to be considered is liquidity risk. This occurs when there are not enough buyers or sellers in the market to fill an order. This can lead to slippage and higher transaction costs.
How to Trade Options Successfully
Option trading can be a great way to make money, but it takes a little bit of know-how to be successful. Here are some tips from people who have made a killing trading options.
1. Do Your Research
Before you even think about putting money into an options trade, you need to do your homework. That means reading up on the company, the stock, and the market conditions.
2. Have a Plan
Once you’ve done your research, you need to have a solid plan for how you’re going to trade. What are your goals? What are your risks? What is your exit strategy?
3. Be Patient
Options trading is a waiting game. You might not see results for days, weeks, or even months. But if you stick to your plan and don’t get impatient, the rewards can be huge.
4. Know When to Sell
If you’re holding options, you need to know when to sell. It’s not always a good idea to hold your position until the expiration date, no matter how well it’s doing. Sometimes it’s better to take a profit while you can.
5. Have an Exit Strategy
Like we said above, you need to have an exit strategy before you enter the trade. As Kenny Rogers says, “You’ve gotta know when to hold ’em and know when to fold ’em”.
Frequently Asked Questions
What is the success rate of option trading?
The success rate of option trading depends on a number of factors, including the investor’s ability to correctly predict market direction, the strategy used, and the amount of risk involved.
While there is no guaranteed way to make money through option trading, some investors are more successful than others. One study found that only about 5% of options traders make consistent profits over the long term. This means that 95% of options traders either lose money or break even.
Factors that can affect the success rate of option trading include the investor’s ability to correctly predict market direction, the strategy used, and the amount of risk involved.
Can you be successful trading options?
In the world of investing, there are many different ways to skin a cat. Some investors prefer stocks, others bonds, and still others options. Options trading can be a successful endeavor, but it requires a special skill set and knowledge base.
To be successful in trading options, you need to have a firm understanding of the underlying asset. This means knowing not only the current price but also historical prices and trends. You also need to be comfortable with using leverage, as options contracts are often leveraged instruments.
Finally, you need to have the discipline to stick to your trading plan. Many novice options traders get caught up in the excitement of the market and make impulsive decisions that end up costing them money. By having a sound plan and sticking to it, you can increase your chances of success in options trading.
Is option trading really profitable?
Option trading can be very profitable if done correctly. However, it is also very risky and should only be done by experienced investors.
Some experts say that options are nothing more than gambling. Others argue that options provide a way to hedge against risk and can be used to generate income. Whether or not option trading is really profitable depends on the individual investor’s ability to make smart decisions.
What are the most successful options trader stories?
In the world of options trading, there are many success stories. Some traders become extremely successful and go on to make millions of dollars. Others find success by trading for a living and making a comfortable income.
One of the most successful options traders is Paul Tudor Jones. He is a legendary trader who made his fortune by correctly predicting the 1987 stock market crash. Jones is considered to be one of the best traders in history.
Another successful options trader is George Soros. Soros is a billionaire who made his money by shorting the British Pound in 1992. He is considered to be one of the most successful currency traders in history.
These are just two examples of the many success stories in options trading. There are many more traders who have found success in this exciting and lucrative field.
Can you get rich selling options?
Yes, you can get rich selling options. In fact, many people have become very successful at it. However, it takes a lot of work and dedication to be successful at selling options. You need to be able to find the right opportunities and then have the discipline to follow your trading plan. If you can do these things, then you stand a good chance of becoming rich from option selling.