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Strategies & Market Trends : Options -- Ignore unavailable to you. Want to Upgrade?

To: the options strategist who wrote (5336)	3/21/2000 12:21:00 PM
From: the options strategist	Read Replies (1) \| Respond to of 8096

For those with small accounts. I need to place a disclamer here in that options are risky, period, In large or small accounts. They can be even more risky in small accounts, maybe. AND I was not suggesting that YOU use the example I gave. My purpose in the previous message on how you can trade in small accounts is to provide you with information re: your options (pun intended). You make the decision. I started with a small account and lost a small amount of money. Then I had a larger account and lost a large amount of money. Once I learned what I needed to learn (and still learning) I found that it's not necessarily the amount of the account but how well one manages it. So most people that I coach start with small accounts and they have all grown from small to large(er). 1. you can open an account and trade with options including selling puts with certain brokerage firms with a small amount. 2. You can trade in small accounts the same as you would in large accounts but in a smaller way. Some things to know if you decide to do this. a) you must know yourself, your behavior/personality and stress level AND how much money you are willing to risk in your account, knowing that it is a risk-Large or small, don't use your rent and grocery money. When you trade options, use risk money. Money you can afford to lose. b) you must have a specific plan that includes: your entry and exit point and how much money you can lose in that one trade. n the example I gave in the previous post re:EGRP naked put write, the person was willing only to lose $1.00 (5% of her total portfolio of $6000) but was willing to take the stock if necessary. Her plan was to exit if EGRP went south on her soon after entry. It didn't so she is still in as far as I know. Now she says she is willing to let it get put to her if necessary. your plan should also include what you will do if if goes north in a short time, i.e she planned to buy back at .25 giving her a profit of $2.00 or hold till expiration if not and rewriting since she still wants the stock. c) follow your plan without emotions as much as possible. If you have a specific plan, it will help reduce some of the stress and emotions. because this was not a real volatile stock, she was able to calmly watch, learn and hopefully profit (however small). The purpose was not to make a lot of money from this obviously, but to gain info on what she can do with a small account. SHE wanted to learn how to sell naked puts and my suggestion to her was not to start with a large account until she was comfortable with what she was doing. Good trading and may your accts grow and grow and grow :) jj