It's much more educational and fun to learn something
useful about options education or how to use options to
make some money.
However, before doing that you must have a brokerage
account with permission to trade options. It may seem
strange to need permission to invest your own money, but
options are not for everyone and most brokers take the
precautionary step of determining whether you meet
certain minimum requirements.
First choose a stockbroker. Your current broker is
probably the best place to get started. If you discover
that they charge very high fees for trading options,
then it's going to be necessary to shift your account
elsewhere. There is no reason to give half your profits
to a broker. It's next to impossible to succeed when
commissions are high.
Next there is an application to submit. You should be
able to access that application online, but some brokers
may require a signature in person, or at least via snail
mail. They ask some questions concerning your
trading/investing experience etc., and should approve
you for Level I trading. That severely limits
strategies you can use, but it is sufficient or most new
It's worthwhile to ask what you must do to get clearance
for higher levels.
Each broker sets a minimum account balance, but because
you are members of an investment club. that minimum is
not going to be any problem. the number is often in the
You will be asked to read an educational
: Characteristics and Risks of
Standardized Options. It pays to take a look at this
pamphlet. It does have some useful information.
Once your broker grans permission and you place some
cash into the account, you are able to trade options.
But please understand that you are probably not ready -
and require some education. Don't ignore that crucial
Mark D Wolfinger
Expiring Monthly: The Option Traders Journal