I want to quit my job but still need a solid source of income. Some friends of mine have suggested trading stock options, but is this really possible to make enough to replace my normal income or my job?
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To be successful at trading options in the stock market, you’ll need practice. The best way to get practice is through paper trading, that’s where you follow a stock and pretend you are actually putting trades in and then taking them out, hopefully for a profit.
You can also find books on the subject, like on amazon or barnes and noble. You’ll need a good foundation on the basics. There are also different strategies when it comes to trading options so you’ll need to learn those first as well.
For more advanced ways on how to trade options, there are sites that offer guidance. The advantage with these sites is that they will take you beyond the basics and offer you a better chance at higher returns on your trades.
I’ve listed some sites below that you can check out, they are for information purposes only and not a recommendation. However, you will learn a little more than what you can get from reading books.
I think if you start your learning this way, you will be able to succeed in trading options. Others have done it so there’s no reason why you can’t learn how to do it too.
Hope that helps and good luck!
Don’t do it. I’m reposting what I wrote in another thread:
I can’t speak from my own experience, because I don’t trade options. However, several years ago, I had a bunch of clients start to do option trading because they all listened to one of the guys (also my client) who claimed he made millions of dollars trading options.
There were 17 of them – I did all of their taxes, and they all started following a guy named Tony because Tony had a "surefire" method to make money trading options. Each and every one of them lost big. One of the guys lost $278,000. They didn’t understand why because Tony had told them how he made a fortune and drove a $90,000 Mercedes (it was leased). Turns out that when I did Tony’s taxes, he was lying to all of them. He was losing a ton of money in option trading, but he was telling all of his co-workers how successful he was. Unfortunately, because my client information is confidential, I couldn’t tell anyone the truth about Tony. I urged Tony to come clean about his losses, but all he told me was, "They’re adults – they can figure it out on their own."
Tony left his job and left the state, and the last I heard, he was hiding because he owed tens of thousands of dollars to his bookie.
Option trading is for suckers, especially if you are an unaffiliated individual. Don’t do it.
Here’s what Motley Fools says about trading options: "Basically, options offer the potential for big percentage gains AND 100+% losses on your money (you can lose the total premium plus the commission). They can be seductively appealing because they present the possibility to make "the big score." Unfortunately, the reality is that a whopping 80% of options traders lose their money. And, while technically not considered "gambling," the everyday Fool doesn’t stand a chance. Here’s why. . .
The most daunting reason not to play with these beastly creatures is the simple statistic—80% of all players lose. Period. No arguments. No contests. Now, there is always one enterprising young Fool in every crowd who intends to be part of the special "20%" who actually make any money"
I would find another way to do it. I have turned 1000 into 6000 in one day. I have also turned 2000 into 50 in 2 hours. Options are hard to trade and make money.
Only if you’re lucky or if you have inside information.
1) Nobody is that lucky
2) If you get caught trading on inside information, you go to jail. Ask Martha Stewart.
Have you been making stable income from trading options? If you are already making good decent income from options, then perhaps you can try quitting your job.
But, bear in mind, when you trade when holding a job and trade full time, your psychology will be different and may bring you different results.
I am a full time trader. I trade stocks, options, cfds and forex. So I know it is possible to replace or even surpass your job income as a trader.
Also, note that when you become a full time trader, the percentage of how you use your money will also changed greatly like how much you should save and keep in the account to roll.
90% of traders or investors lost money. This is a fact! That is why many will not encourage you to trade. But if you are making money already, why listen to people who are poorer than you since they did not score high in that area.
In short, ONLY quit your job when you have been at least consistently making more than what you make in your job for the last 6 months.
Hope this help and have a Merry Xmas!
I quit my job to trade stock options nearly two years ago. While I do think it is possible to make a full time income from options, make sure you have the mindset for it as when it is your sole source of income you will trade differently than normal in most cases.
It didn’t pan out for me as I had hoped as I allowed the pressure to make income every week and month to over ride sound trading practices. Had I had a night job or weekend job I know I would have been much more patient and successful as an everyday trader. If/when you quit your job make sure you have a large nest egg so you do not have to be successful as a trader to live. If you do that and are successful trading before you quit your current job I would say you have a great shot at making it as a full time options trader. Make sure you are successful first before you quit your job!!
Do your friends make a full time income from options? If they don’t try to find someone that does and get advice from them on when would be a good time to go into it full time and as your only source of income.