Written by A.J. Brown

Option Trading with Zero Risk

Paper TradingEverybody wants the leverage (and potential profit) that comes with option trading, but few people are eager to risk their hard-earned money to see if it will actually work. I know because I felt the same way back when I was getting started.

Fortunately, I overcame my natural fear and decided to take action. The results have been nothing short of amazing.

But I didn’t overcome my fear of losing money by jumping head-first into the market. Neither did I overcome my fear by learning more strategies or filling my head with the daily stock market news.

What I did was far more beneficial. I started using a zero-risk method of option trading. What is this method? I will tell you… It’s called “paper trading.” Here’s how it works…

Instead of trading with real money, you trade on paper only. When you find an attractive stock that is ripe for an option, pretend that you’ve actually executed an order, and simply record the price you paid for the option. Then, over the next few days, track the price of the option to see what happens. Does it go up? Does it go down? Most importantly, are you making money?

If you really want to get the full benefit out of this method, then give yourself an imaginary account balance of, say, $5,000. Use the money in your imaginary account to trade options. Reduce your cash balance when you buy options; add the cash back when you sell.

In this manner, you can see how good your trading skills really are. You can see if you would have actually made money or lost money in real-world situations.

Sound a like a waste of time? A little too childish? It’s not. This is the exact same strategy I used to get comfortable with option trading. I paper traded not for a few weeks, but a few months before I started using any real money. This way, I got to really see how the market works and what influences the price of option contracts. I got to see where I was doing things right… and where I was doing things wrong.

Think of it this way. Have you ever played the board game Monopoly? It’s a simple game that teaches the basic principles of real estate investing. By playing the game, you naturally acquire some of the real skills you would need if you were to buy and rent property as a landlord.

Paper trading is similar. It is a game you play to learn the skills required for being a successful option trader.

This kind of experience is invaluable. And the best part is you can’t possibly lose any money paper trading because you’re not using real money. You’ve literally got nothing to lose!

Best regards always,

A.J. Brown

P.S. If you’re new here, I highly recommend you opt-in for my free option trading course. You can get instant access to it here:

==> Click Here to Access My Free Option Trading Course

Categories: Options / Strategies

19 Responses to “Option Trading with Zero Risk”

Pages: « 1 [2] Show All

  1. bert @ 10:55 pm:

    To trade a virtual account on Options express do you have to fund an account? Do you have to sign up with a credit card?

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  2. Learn Currency Trading Online @ 9:46 am:

    There’s a lot of controversy out there on this issue, but I tend to agree with the author.

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  3. Learn Currency Trading Online @ 9:50 am:

    This is a useful website!

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  4. Financial SpreadBetting @ 11:12 pm:

    Always useful to start by paper trading. It isn’t the same as actual trading as the emotions aren’t intense. Still be careful to start off small when looking to do the real thing.

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  5. The Mayor @ 4:25 pm:

    it’s always good to practice first before using real money as one needs to get a feel for the market before risking real dollars.

    however, since there are certain options scenarios that can yield a no risk situation, the title of your post is extremely misleading and annoyed me to no end.

    perhaps this example will help you to understand why…

    “Get car insurance for FREE!

    Most of us drive on a day to day basis and in many areas insurance can be quite expensive. Fortunately, I have found a way to not pay a dime for auto insurance.

    Instead of driving around in your car and risking damage to your vehicle like everyone else, I suggest you take the same approach to transportation that I did. Sell your car, cancel your policy, and walk or bike to work. As you are taking your morning journey, close your eyes and visualize that the car window is open and the wind is rushing through your hair instead of the slight breeze from the 4 mph walk. Make some humming sounds that mimic the engine in high gear for full effect. You can even use your mp3 player to simulate your car’s sound system.

    Not only will you never get into a car accident again, but you avoid paying for gas and repairs as well. And all without having to pay an insurance company a single penny.

    In fact, the sale of your vehicle is actually money back in your hand.

    Remember when you were a child and you used your imagination to solve all your problems? That invaluable experience is now being put to use in real life to help save you money!”

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  6. pizza frankfort @ 8:03 am:

    I would like to thank you for the information you have posted it is a new insight into how I should approach this website design

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  7. Trinity13@Options Strategy @ 1:31 am:

    Thanks for the share. I hope this is a relevant content that would help beginners understand the risk in trading.

    Does beginners understand the risk of trading? Does it have other strategies that would help investors?

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  8. John AndyEva @ 1:50 pm:

    Rather informative many thanks, I think your trusty audience will probably want far more information similar to this maintain the excellent work.

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  9. Andrew AndyLaura @ 3:33 pm:

    Incredibly revealing appreciate it, There’s no doubt that your trusty visitors may very well want more articles like that maintain the excellent work.

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