How to make money trading options

Options trading is very popular in many countries around the globe. However, most people still ask the question "can you really make money in options". Find out if you can really make money on options trading. In this article I will try to answer this question and give you a few tips on how you can make money trading options.

The short answer is that yes, you can make money online with options trading if you only trade at legitimate options brokers and learn the fundamentals of trading and employ proper trading strategy.

Options trading is a form of investing by predicting the movement of various assets such as gold, silver, dollar, other. It is very similar to other forms of investing such as forex and stock trading. It's however simpler, has relatively fewer risks (in the sense that you will always know in advance what you might lose) and can offer larger payouts.

The idea is that you can only make money from options if you treat them as a real form of investment. This means learning how it works, how to read charts, and how to make accurate price predictions. All these are not that difficult but it takes some time. If you treat it as gambling and just make random predictions then you will obviously not win.

Trading options online is not as complicated as many people think it is. You don't have to be an economics expert in order to make money by trading options. Below these lines I'll reveal why making money with options is actually pretty simple.

Quick guide: Yes, you can make money in options. The easiest way is to use a options robot, such as Signals that will automatically analyze the markets and make accurate predictions for you. This is fully automatic and comes with a success rate of around 80%.

At this moment the most reputable broker where you can make money if you use proper strategy. Has a payout rate of 92% and is also the broker with the most licenses and government-approvals, which means it's 100% safe and fair.

Is it possible to make money in options trading?

Find out can you really make money on options

A lot of interested traders are asking themselves the question if you can really make money with options? Obviously this is a perfectly legitimate question considering that most people have not traded options in the past and generally believe that investing is a very difficult activity.

The answer is that you can really make money trading options. However, you will have to put an effort into it. You will need to learn how to manage money, analyze charts and use indicators to properly open trades.

Related: Options Academy

Naturally, you will have to put an effort into it if you want to make sure you'll be able to generate money consistently. If you treat it like gambling then obviously the end result will also be like gambling and you will end up losing money instead of winning.

However, if you follow simple online trading strategy, like the ones that I have listed above, then you will have the potential chance to generate profits consistently. Also, the more you trade, the easier it gets later on. After a few months, trading financial assets will come natural to you, allowing you to make money consistently.

How does it work?

In options you will have the possibility to predict the movement of various assets such as stocks, bitcoin, currency pairs forex, commodities and indices. Making a prediction is possible after purchasing an option.

An option has only two outcomes. This is because the value of an asset can only go up or down during a given timeframe. Your task will be to predict if the value of an asset with either go up or down during a certain amount of time.

In order to purchase an option, you will have to invest a certain amount of money. Usually, you can invest as low as $10 and a high as several hundred. If by the time of the option's expiration your prediction will have come true, you will receive your investment back plus a commission that will be the profits you made.

If your prediction will be false, then you will lose the invested money. Options trading is not gambling because if you pay attention to what's happening in the business world you may be able to make accurate predictions. In gambling however, you will not be able to predict on what color the roulette ball will land, no matter what.

The simplest way to make money in options is by trading on news events. Below you will find an example of such cases:

Long-term trades

Usually around September and October each year Apple is known to release a new iPhone and several additional products. Your task will be to check out when this will happen (usually, these events are announced months ahead).

Add the date to your calendar and around 1-2 days before the event buy a option that predicts that the stock value of Apple will go up during the next 2-3 days. You can be fairly sure that your prediction will be correct, as Apple's stocks usually increase after a new product launch. And boom, this is it; you just made money with trading.

As you know, there are hundreds of large companies, such as Google, Samsung, Sony, and Microsoft, and other. Just check out when these companies are about to launch a new product and mark it in your calendar. You will usually find 1-3 such major events during every week of the year.

With this strategy you may expect to win around 70% to 80% of the time but it requires a lot of preparations like following news events. It's can potentially be easy money through, so it should be the first strategy you use to make money in options trading.

One of the best options brokers on the internet right now that have many long-term trades. As explained above, Trade is also the first broker that has received a real government financial trading license, meaning it's fully legal and regulated.

Related article: Using news events and long-term strategies to consistently make money

Hint: You do not have to do all this by yourself. You can use a signal service such as Signals that will automatically look for long-term trades and make accurate (up to 80%) predictions for you.

Short-term trades

After you become a little more experienced you can move on to short-term trading. As you can see, news trading involves long-term trades, for example, for several days or weeks. A more advanced way is using short-term trades that expire within just a few minutes or seconds.

Here, you will not be able to use news events, as things happen too fast for news to have any influence on asset prices. Instead, you are expected to read the charts of various assets and look for trends.

Trends are predefined patterns in the short-term movement of assets. This means that if you catch a pattern in its early development, you can predict what happens next (patterns usually behave the same).

More on patterns: Candlestick options strategy

More on patterns: Bollinger band trading strategy

These are slightly more complex strategies, but they are great because they allow you to make money with options on a daily basis. And since they involve short-term trades, therefore don't have to wait for major news events (product releases).

The best is always to use a combination of both strategies if you want to make money consistently using options. If you are a beginner, you should first start with the long-term strategy I described above (the one with Apple as example) because it's very easy and there you will have realistic winning chances even as a complete newcomer. Then later diversify to short-term.

For short term trades I usually recommend. This is due to the fact that short-term trades are usually more risky, and Trade offers a minimum deposit of $10 and allows you to invest from $1 per trade.

Tip: Short term trades are a bit harder to predict than long-term trades, but they can make you money much faster. It's recommended to use a robot (a tool that will automatically execute accurate trades for you), such as Signals. This way you will be able to make money right away with minimal work on your part.

Is it legitimate?

Reputable financial service providers and investment firms first introduced trading in the United States. After this, multiple countries decided to adopt this practice and make it a legal form of financial trading and investing.

At this moment trading is officially regulated in a large number of countries on the planet including the United States, the United Kingdom, Cyprus, Japan, India, Indonesia, South Africa, Europe, Asia, America and more.

In order for financial service providers to be able to offer trading services, they will have to pass an independent evaluation by various government agencies. Only those online trading companies that offer legitimate services will be awarded with a financial service provider license.

Also, trading financial assets online by private people is at this moment legal in all countries on the planet. This is also valid in countries where options is at this moment not yet regulated. – To our knowledge trading isn't illegal in any countries at this moment.

Do i have to be an expert to make money in options?

A common misconception is that you will have to be a financial and business expert in order to successfully trade options. However, this is not true at all. Perhaps it's true when it comes to traditional stocks trading but definitely not true in the case of options.

You don't have to be an expert to predict the movement of certain assets. Just think of the example I gave you above with Apple and long-term trades about on how to make money in options. Just based on that example you already learned one of the simplest ways to successfully trade options. There were no complicated tools or economic theories involved.

To add on the strategy mentioned above, another example is knowing when the Federal Reserve is printing money.

You can find this info in the news. In such cases, the value of the USD almost always depreciates. So, in cases like this you can place very accurate investments on the outcome that the conversion rate between the USD and other currencies will increase.

And now you already know two very easy methods that you can use every single time you trade. So, as you can see, you can definitely make money by trading options if you do it properly and don't just make random predictions.

You can implement these strategies at options brokers. The idea is to always choose legitimate and reputable brokers to avoid being scammed. You can also use various tools such as signals and indicators (moving averages) to help predict the movement of assets.

Learn more and become a winner!

If you want to make money with options then read our detailed educational articles and strategy guides. These will teach you to efficiently trade financial assets and increase your winning probabilities.