If you are just a beginner in option trading, you can ponder over how much money you should invest in your new business.
This is one of the common queries that a newbie has in his mind and here I am going to discuss this to help you out.
Well, no amount is considered to be as smaller amount until and unless you start your journey as a stock marketer.
It is not necessary to invest a huge amount of money at the beginner’s level just as we need it in Real estate Business.
Yes , you can start your business with only 5000 rs and another thing you keep in mind that you should have set aside an adequate emergency fund that gives you a backup for an unexpected event.
Being a newbie you must not be aware of the basics of risk management so an emergency fund can support you at your initial 3 to 6 months.
The Futures and Commodity markets offer Day Traders better access to day exchange for a considerably little deposit.
Depending upon the brokerage, you can open a future account with as little as $2,500, whereas many require at $5,000 to $10,000.
This isn’t the equivalent as “margin”, which is the base measure of capital you should have in your account with a specific end goal.
The margin required relies upon the market being traded and the current level of unpredictability.
For instance, to trade a single Live Cattle Future contract you may need to have an “Initial Margin” of $1,650 to start the trade, and it must not dip under $1,200 which would be your “Maintenance Margin”.
For a beginner in option market trading all these things seems to be more confusing as it may lead to a loss of investment.
So Option Trading is an definitely risky financial activity that should only be practiced by those people who have acquired effective risk management and asset allocation strategies.
You can learn according to your requirements to develop your skills. Various of modules are available to give you proper knowledge.
From Option trading Basic course to Some Advance level courses are offered by various of institutes like IFMC, Institute of Money Management, Nifty, NCFM Academy and many more.
Whether you are a beginner or a working professional , you can fetch any of the courses like Option Trading, Financial Trading, Stock Trading, Forex, Technical Analysis, Day Trading, Future Trading, Investing, Personal Finance Strategies and many more.
Top 5 tips in Option Trading:
- Options are considered as the best risk reducing tools for investments.
- Manage Risk carefully and tactfully as you can lose your investment at any time. So don’t invest money going out of your comfort zone.
- Never buy any option that is cheap but tempting. The chances of success are too small in these cases.
- Never go for a broke as any unexpected event can happen.
- Always buy one option for every option you sell. This is how selling spreads.
However, if you are willing to pursue the education and perform the hard work necessary to make money at it, options trading can be a very rewarding and profitable.