My Journey Into The World Of Options Trading

Background

I have always like the idea of having multiple streams of income. Hence I do not rely simply on stocks investing as secondary source of income. I also invest in Unit Trusts aka Mutual Funds for exposure to Market outside Singapore. Other than that, I also invest in short term bonds. I am getting monthly dividends from my bond portfolio. I also have Singapore Savings Bond which I view as temporary place for me to park my money as warchest and earn higher interest at the same time. I recently also started buying cryptocurrencies which I blogged about earlier on.

Mercy of Mr Market

What I don't like about the Stock Market is the gain could be too unpredictable. Even if we invest in the right companies, Market could suddenly turn bearish and our gains could be wipe out much faster than the time it took to accumulate. Of course, this could be seen as opportunity to buy even more provided we still have capital to go in and the mental capacity to see the Market dip even further after we buy. Ouch! Some companies even though they may issue dividends, it is insufficient to cover capital loss. e.g *cough* M *cough* 1. This led me to search for other ways to generate income that is non-correlated to the Stock Market.

Forex

I have paid for Forex courses before but 1 thing I discover is you really need to enjoy looking and analysing charts which is the Technical Analysis aspect. I do not enjoy switching between currency pair and timeframes, sit and wait for trade setup to appear. It depends on individuals and some people could enjoy doing that. I think.

Options

First of all, I am referring to the real deal here and not binary options. That 1 is sketchy. Win or loss could be a matter of 60 seconds. Don't try that at home or anywhere. Brokers could still deny you your money even when you win.

What I like about Options Trading is you could go either long or short. This means you could make money even when the market is in a downturn if you trade US stocks. Of course you don't have to trade US stock options. I trade futures options which brings up another benefit which is the non-correlation to Stock Market. Options trading may sound daunting at first. I watched a lot of YouTube videos on Options Trading and guess what, I got even more confuse.

Here's a look at my demo account and my results after I signed up and went for a proper course. The account was started in July.

As can be seen from the screencap, there are different months of contracts. This means I could generate consistent monthly income from Options Trading. Some of the contracts haven't expire. I am experimenting with Stocks Options which I find harder to master than Futures Options. Those that I highlighted are Futures Options Contracts. 

So that's it! Options Trading is also 1 of my income source. I may blog more about it in future.