4 Steps To Start Trading Options at Tastyworks - Getting Started

4 Steps To Start Trading Options at Tastyworks | Getting Started

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4 steps to start trading options at tastyworks

Are you ready to take action and start trading options? In fact, the best way to learn trading is by doing. In this article we will give you the 4 steps to start trading options at tastyworks:

1. Open a Tastyworks brokerage account

In order to trade (stocks, options, or futures) you need to open a special account, called a brokerage account. This is like a bank account, except it gives you access to all the relevant financial markets.

There are many different types of accounts to choose from. Here are the most common types of accounts:

Individual margin account – this is a taxable account that enables trading options, futures, and stocks. (Note: You “take a position,” or “put on a position” in an underlying stock by buying or selling its calls or puts.) This type of account also permits the borrowing of money to reduce the cost of an option positions; this is called “leveraging your position.”).

Individual cash account – this type of account is similar to an individual margin account, except that you need to have the full cash amount, in advance, to take a position rather than being able to leverage it via borrowed money (usually from the brokerage-account manager or bank).

Traditional IRA – this type of account is similar to an individual cash account in that it does not allow for borrowing on margin. However, a traditional IRA is not a taxable account. It uses pre-tax dollars, and your gains can grow tax-free until they are withdrawn in your retirement.

Roth IRA – this type of account is like the traditional IRA in that it is not taxable. A Roth IRA uses after-tax dollars to fund the account, but it can grow tax free. Moreover, withdrawals are not taxed!

You can open one of these types of accounts here at Tastyworks!

At some early stage, you’ll have to assess your technical knowledge of trading, how much risk you are willing to take, and a few more questions about your finances— both current and realistically projected. What typically happens is that the brokerage manager/bank will review your application and grant you an account based on their perceived levels of your forthcoming trading and risk appetite. What’s great about Tastyworks is that you will automatically be granted full access to trading all types of options strategies right off the bat. That’s one of the more attractive brokerage features they offer.

2. Fund your account

The minimum amount to fund an individual margin account is $2,000 that you select to handle your trades. This is certainly enough to get started. With such a limited amount of capital, the number of positions you can put on and the size of each position will of course be limited. However, on the positive side, putting on small positions and watching how different factors affect them will provide a great learning experience without risking too much money, at first, when most mistakes are likely to be made.

3. Download and learn the Tastyworks Desktop Platform

Once you create an account, preferably at tastyworks.com, you should download the Tastyworks desktop platform.

This is just a sample of how it looks!

tastyworks

This is the tool that you will use to trade in and out of positions, once you decide to stay with us on this Blog. Tastyworks has video tutorials that you can use to get up to speed on using the platform. What’s great about this platform is that it is designed by and for options traders. It is an intuitive platform that gives you all the important information about option volatilities, one-click strategy functionality and a visual curve mode that displays options trades for those who are visually oriented.

4. Put on your first trade!

Once you get a funded account and a handle on the platform, pick a stock(s) and take a position… put a trade on! You certainly don’t have to risk a whole lot, but starting and doing is the first step to becoming a profitable options trader. After putting on a position, just watch how it reacts to different things that happen in the market. Check up on our blog for the latest educational content on options trading!

If you enjoyed our 4 steps to start trading options at Tastyworks, be sure to leave a comments below. If you would like to open a real Tastyworks Trading Account click here!


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