Written by A.J. Brown

Who Trades Options?

Who Trades OptionsOne of the questions I received during the recent open question time was about who trades options. Doc writes…

Correct me if I’m wrong but I’m getting the impression that your program is for those traders who wish to make “trading” a full time career? Is it possible to do both: “trading” career and “professional” career??????????

If you’ve gotten the impression that you must trade options full-time (40 hours a week), I apologize. Using my system, it should take no more than 30 minutes a day.

If you are skilled, you can earn a full-time living in only 30 minutes each day. You don’t have to quit your job or sacrifice your career to do this. Almost anybody can carve out 30 minutes a day to develop an extra source of income.

That said, many options traders choose to cut back the number of hours they work once they’ve got a consistent track record of profitable trades. Some quit their jobs altogehter. But this is not usually the case. Your average option trader still has a full-time job and uses option trading to supplement his income. This is what I did for many years. I only quit my job once I was confident in my trading abilities.

So who trades options?

People of all kinds. Men and women, people with jobs and people who are self-employed, young people and retired people, West coasters and East coasters, those who want to get rich and those who just want more financial security. The point is, there is no particular type of person who trades options. It’s really all over the map.

Where do you fit? What are your goals? Can option trading help you get there?

I sometimes say that option trading is the perfect "home based business" because you don’t have to sell anything, you don’t have to buy inventory, and you can still make money in only 30 minutes a day. It’s a beautfiul thing.

Best regards always,

A.J. Brown

P.S. In case you missed it, you may also be interested in this article: Are Options Risky… Really?

Categories: Education / Options

9 Responses to “Who Trades Options?”

  1. Bob Clarke @ 11:42 am:

    I have heard this question often from people who are learning to trade options: “When can I quit my job?”

    There is no standard answer, because it depends on your financial status and money-handling discipline, but one answer struck me as trying to answer the question and still make the questioner aware of what they are asking:

    “You can quit your job when you make in one month what you now make in a year.”

    In other words, by the time you get to that point, you should be well on your way to financial responsibility, and the question becomes moot.

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  2. John Larsen @ 3:00 pm:

    On a recent blog I listened to your #1 strategy of 7. It was well done but if the other six are simply about the different strategies; bull call spread, bull put spread, straddles, etc.etc., I am already quite familiar with them and your service would be redundant.

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  3. JOSEPH ANTHONY @ 3:54 pm:

    A quick question regarding the substitution of equity options instead of stock. In today’s markets the volatility is incredible, like I never experienced before( over 30 years).

    If you developed a short-term profitable strategy (3-5 days) on Volatile stocks how would you handle the premium paid?

    How much is too much? Would you only trade ITM 1-2 months out?

    Would Delta play a part in what option you select?

    I realize a lot of these answers are objective but I am curious to know other peoples take on this, given the high volatility in some stocks. Also all of these theoretical calculators kicking out TV appear to be irrelevant. Do you agree?

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  4. Juandi @ 7:05 pm:

    Hi AJ,
    How many person who has become full option trader in your community? What is the percentage? I like to become your member but I wonder if you can post some real time example your entry position and then exit position in few days later. People can always can show profitable historical record but I have not found any trainer who willing to post his/her position in real time that anyone can watch it to know if that position later will be profitable one or loss one. Do you have the courage to be the first one? Thank you

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  5. A.J. Brown @ 9:51 am:

    Hi Bob,

    Being well on your way to financial responsibility, in my mind, doesn’t need to be physical. It could be mentally and emotionally. Of course, the mental and emotional components are the harder components to attain. I have found that when you are mentally and emotionally on your way, the physical part comes very quickly.

    Thanks for your comment Bob.

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  6. A.J. Brown @ 9:57 am:

    John,

    Listen to the other six. They aren’t what you think.

    Also, the free audio’s I release on my blog are only representative of a small component of the service I offer.

    Let me ask you this, based on one of my favorite books by Cheri Huber, “How You Do Anything Is How You Do Everything,” do you trade the same way you prejudge educational material without ever experiencing it? Just wondering.

    I do appreciate your kind words about the quality of our first audio. I hope, for you, that you check out, at least, the rest of the free stuff I’ve released. And, if you choose not to, that’s okay to. It’s only you that is missing out. ;-)

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  7. A.J. Brown @ 10:05 am:

    Hi Joseph,

    On a previous response I made to a comment, I described either minimizing the time value component of an option premium price or managing it.

    In a highly volatile market, exactly, the trend is to go closer in time (never near term). Although, there are individual stocks that are standing on their own, even now.

    In my world, the option strategy I pick is directly related to the underlying stock setup. There’s really no one answer. For a strategy used to find channeling stocks and stock setting out to breakout, I’d generally invest in going deeper in-the-money and, not go farther out in time. For solid trend continuations, I’d generally invest in going farther out in time and at-the-money.

    And, in the case of trend continuations where volatility is minimal, I do live to compare ratios of delta over ask, to pick the option I can get the most bang for the buck on.

    Great questions Joseph.

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  8. A.J. Brown @ 10:18 am:

    Juandi,

    Right now we have over 400 members of trading trainer from all walks of life and from all over the world. I can’t tell you how many have gone onto becoming full time options traders, because unless they offer up that information, it really is none of my business. There are a lot of personal decisions that go into being a full time options trader that really are, in my mind, private.

    For the last three and half years I have kept a record of my active portfolio for the members of Trading Trainer to check out. As of January 1st, I paused from posting simple because we’re changing web systems and our web programmers needed me to stop updating one page while they transition us to the new one.) But, in other words, I was the first one three and a half years ago. And, in reality, I am not the first one, because there are reputable gurus that I’ve encountered that were doing that when I encountered them nine years ago.

    Thanks for your challenge and your skepticism, Juandi. I, do fear, however, that your challenge was wasted on me since I complied years ago. And, your skepticism is good… to a degree. However, let it get the best of you, and only you suffer. Trading Trainer, me, and the other members of the community will go on. ;-)

    Just remember this. It’s not about me. It’s not about others. It’s about you. I can trade circles around you, I am almost sure of it. There are members of Trading Trainer that consistently trade circles around me. At the end of the day, your success is your responsibility. Associating your success or failures with anyone else is a recipe for disaster. Your destiny is created by you.

    Sorry to get all new age on you… but, thinking this way has worked really well for me.

    Take care Juandi.

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  9. David S.Y. Wong @ 9:49 pm:

    I can appreciate that success numbers are not available and that it would be individual-specific anyway in terms of capital size, how often they trade, etc. However, do you have any information on what the expected gains are for a given strategy/approach in options trading? For example, in stock trading, I can present a trend following system for stocks whereby the per-share gain can be achieved if the trader is able to get the stated entry/exit price points. I understand that options trading is more flexible and thus more complex because there are various combinations that can be employed.

    What I am getting at is that I would like to see such gain projections for a given options trading technique. I would like to see that method works. I would like validation before committing my options trades. And by this, I do not mean that for a given straddle position, the gain is so and so. That kind of information is readily available on the Internet and in printed books. What I’m getting at is, does the system track the trend/movement of the underlying stock? After all, that is basically the only thing that matters in trading, whether it is directly in the stock or indirectly through equity options. Get the trend/direction right and trades will be successful. Hedging with options doesn’t change that fact – you still need to determine the action to buy/sell call/put options based on the anticipated stock price movement.

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