I am not sure what you mean by a site to practice. I dont' know of any free ones that have a portfolio tracker for options but there is a thread here where some people post their trades...
Subject 55050
There is also a covered call thread if that is your strategy...
Subject 51101
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There are tons of books and learning materials out there but beware of any that claim you will make a fortune with their strategy or their product will make you money. ( that goes especially for many of the self proclaimed gurus you will see that sell a system or chat room for trading. Most of these people were ordinary posters here on SI at one time or another that just found a group of suckers to charge a fee to. Remember that if they are on to something good, they wouldn't be sharing it or selling it, they would be using it themselves in secrecy. No system works every time and if they want a group of people following their trades, they are just trying to drum up volume in their direction to sell into the artifical demand.)
Options are straight forward, they are like stocks but with added leverage and the added hardship of confined time. You not only ned to be right but you need to be right at the right time. If you buy an out of the money call and the underlying doesn't go up until the day after expiration, you lose it all.
FWIW, I lost a fortune on my very first option trade. I was nailing stocks perfect and made a lot on very little. I switched to options and was wrong for the first time in months and it hurt.
There are tons of strategies out there. You can just hedge current normal stock plays by selling calls short or buying puts against long positions or by selling puts and buying calls against short positions. You can do bull spreads where you buy one call and sell another, time spreads that are like options on different expirations, straddles or butterflies etc etc. The CBOE site has a lot of good free information that will teach you the basics.
Just remember that stocks are one thing, options are a different animal so paper trade first, then when you do start, start small. The advantage is usually with the option writer since time erodes value. Markets are all about leverage. Buying and holding stocks, trading stocks, using margin, using options, then futures, then options on futures are all just steps in increasing leverage... and risk.
I read onetime that 80% of option traders lose money and end up broke. Try not to be a statistic. There are few of us that survive. Be quick to take losses and then let your winners run but take your profits once things stall. Time is your enemy if long an option and trading fees are cheap so don't be afraid if an option runs up to take your profit, and then let it pullback for a fib retrace and then re-enter or roll out for more time.
Good Luck,
Lee |
