There is an educational site called Tastytrade ( www.tastytrade.com). It's a daily live show with segments that are recorded so you can watch them anytime. Tons of stuff on options along with a program called Dough that allows for probabilities in a variety of option trades. Best thing it's FREE.
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I've been trading options for about a year, strategic style. Mostly spreads. So, from my limited experience:
I don't trade options on futures, but from what I hear they are not as liquid yet as options on equities. Since liquidity is important in trading options, this is a key fact. You want underlyings with large volume and a very narrow bid/ask spread. SPY, QQQ, TLT, AAPL, FB, NFLX, SBUX, GLD, VXX, IWM.
Some people daytrade single options just like stocks, trading the tape. They claim you can make more money doing this than trading the underlying cash product.
People trading spreads like me will trade longer duration to get the time value premium, for example opening positions in the range of between 20 to 60 days.
As for account size, to get good at options you need a lot of practice, and that means having a number of positions on, for example 10 or 20 or more. With a $10K account, for instance, you can have ten 1-lot positions on in lower-priced underlyings without exceeding about 50% of your buying power, which is a reasonable limit on portfolio size. With a $5K account you can have fewer positions and more risk relative to account size.
So, I would say at least a $10K account for a beginner. Bear in mind the fact that to really be profitable you need to be trading higher profit strategies like strangles and straddles and naked options that require more capital and higher permissions. $30K account allows you to do more of that stuff.
In other words, it's very tough to get profitable on a $10K account in options because you are restricted to doing the safer strategies that have lower probability of profit. So, it's best to look at a smaller account as good for learning the concepts -- but manage your expectations.
As for brokers, I hear a lot of people prefer the fee structure at IB or Optionshouse. I am using TOS with a discount via dough at $1.50 per contract. This is half the normal TOS price of $3, which is considered expensive. But even at $1.50 the commissions really, really rack up fast. Anyway, I think for a beginner maybe it is more important to be with a broker that has a good platform and worry about the commissions later, when you get to a higher level. TOS and dough are obviously good for beginnners, but you may not be able to get them where you are. Look into IB (although I think they require a bigger account to get permissioned for options).
As for why people trade futures rather than options. For one thing, you there's more leverage. For another thing, it's less complicated at the strategy level. Markets are open longer so you can trade more. I think it's best to be good at trading both options and futures, and use them as appropriate. For a directional play on bonds, for instance, /ZB may be more efficient than options on TLT.
As for unlimited downside with selling options. If you stick to trading SPY, QQQ, TLT, AAPL, FB, NFLX, SBUX, GLD, VXX and IWM, none of these things are going to go to zero today. And conversely, they are not going to go to the moon, today, with the exception of VXX.
In the case of VXX (and UVXY) the rule is never sell naked options, only sell defined risk spreads. In general tread lightly in dealing with volatility products because they cause the worst account blowups. VIX calendar spreads being the worst.
Anyway, as a beginner, you will only be permissioned to trade defined risk spreads: credit and debit spreads, iron condors, and covered calls and so forth. So you don't have to worry about unlimited downside as a beginner.
So, a basic formula is trade those ten products and restrict yourself to one lot spreads and covered calls, collect 1/3 of the width of the strikes on the spread in the front month or back month duration. Take the position off at 50% of max profit and reload at a later expiration. Learn to manage your portfolio of these underlyings to within +/- 100 deltas on your $10K account.
As for books, Michael Sincere has a couple of books that are very well written and easy to understand, such as "Understanding Options 2E".
But as another poster mentioned above, there is about 5000 hours of video content on tastytrade.com and if you watch much of this you may not need or want a lot of books to get started. Their "doughjo" interactive e-learning course is very good. Watch the beginner oriented episodes of "Ryan and Beef" and "Mike and his Whiteboard" (watch this one from the beginning).
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I don't intend trading frequently, nor having 10 positions all the time or sell premium for that matter.
I want to make directional bets on commodities, interest rates, FX rates and volatility. Speaking of which, when I buy volatility who is on the other side of the trade? Seems like a no-brainer to buy volatility when it's low.
You're welcome. Take what you like and leave the rest.
I am specializing in volatility trading, please take a look at my journal in the Elite section. I find I cannot manage 10 directional positions at my level of skill and knowledge. If I focus on one thing, maybe.
It's very hard to make money long volatility, whether buying or selling. The counterparties, especially the VX traders, are known as rocket scientists for a reason.