This is a question alot of beginners to options trading ask and a question which I used to give a simple two words answer: A Lifetime.
However, I think that doesn't really answer all of the implied questions in that single simple question. I think that question can imply at least three different questions. 1, How long does it take for me to go from completely no knowledge about options to being able to make my first options trade? 2, How long does it take for me to go from completely no knowledge about options to being able to profit consistently in options trading? 3, How long does it take for me to go from completely no knowledge about options to completely mastering everything about options? Ignoring individual differences, this article shall attempt to answer these questions in an extremely general sense based upon the decades of observation made by the author.
So, how long does it take for someone with completely no knowledge about options trading to start learning and eventually reach the state where that person can make their first options trade?
Even though options are extremely complex instruments, there is fortunately no need to learn everything about options before one is able to make a first options trade. Learning to trade options is like learning to drive
a car. If your goal is simply to drive a car to work, all you have to learn is how to operate the car. You won't need to learn everything about the car like how the fuel injuection
works or how the motion in the steering wheel is converted to motion in the wheels at all. This is the same in options trading. For most people, making the most basic trade using options
as replacement for stocks in a single bullish or bearish outlook requires no complex knowledge beyond the basics of how call options and put options work. Which, at its very
core, is as simple as buying call options when you think the stock is going to go up and buying put options when you think the stock is going to go down. This means that a couple of
hours of studying about Long Call and Long Put strategy and applying it to your existing way of choosing stock trading candidates is all it needs to trade options.
Going through our Basic Options Trading study guide is one way of getting an idea of what you need to know in order to reach this level of options trading proficiency.
So, making trades but winning some and losing some resulting in a net loss most of the time is no longer enough? This is when things get slightly more complicated.
In order to win more or to win consistently, you can do two things; 1, to dramatically improve your stock picking skills. 2, to use options strategies in order to
increase your chances of winning. Yes, when you can't do much about being able to better predict future stock or market movement, options strategies provide the way
to greatly increase your chances of winning by allowing you to profit in more than one direction through the use of options strategies! Options strategies are creative
ways of combining different options in order to result in "options positions" that can profit in more ways than just up or down. In fact, some options strategies allow you
to profit when the stock moves in any of the three major directions; Up, Down AND Sideways! How's that for an increased chance of winning? However, this is akin to
moving from a casual driver to becoming a sports car racer. You would need to learn a lot more about how the car works so that you can manipulate its advantages to the
max. This is the same for learning about options strategies. At this stage, you would need to learn about how options pricing behaves in terms of options greeks and
how options strategies are built and how to choose the correct options strategy for your particular outlook and situation. In fact, each one options strategy would
require at least a few months of study and experimentation on a virtual trading platform before it can be confidently and profitably applied.
As such, this would typically require months of learning on your own through our free tutorials or weeks of guided learning from an experienced and profitable options trader.
So, simply profiting using options isn't enough for you and you now wonder how exactly this instrument is created, how it works, how the market behind it works,
its concise working mechanics so that you can eventually be an expert or specialist in options trading? That's going from race car driver to learning how to make race
cars, which is a completely different level of proficiency. This level of proficiency, however, is not required for the actual act of trading options nor profiting
consistently from options trading. It is something some profitable options traders go for after years of successful options trading and wish to get onto the
mastery level of understanding of this facinating financial instrument. This level of mastery typically involves going back to college as complete understanding of
options as a financial instrument cannot be achieved without a complete understanding of derivatives systems, financial systems and economic systems. After college,
its a lifetime of research and experimentation in this instrument or industry. As such, I would say that the time needed to attain complete mastery of options trading
takes a lifetime and many experts have dedicated a lifetime of work in the area of options trading.
Are you ready to invest a lifetime of research into this amazing financial instrument?
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