#790 - Here's Why You Cannot Start Trading Options With $100

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The "Daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

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Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be talking about why you cannot start trading options with $100. Now, I know that there’s a lot of people out there online who suggest that you can start trading options with a little bit of money. And while that’s true, we actually suggest that you start with somewhere around $3,000 to $5,000. Hopefully on the upper end of that range, around $5,000 is really where you start to get the benefits of diversifying positions and adding more ticker symbols and spreading your risk across more underlying asset classes. The real reason why you can’t start trading options with $100 is although you can buy some option contracts with $100 and you can do a very simple, very narrow $1 wide spread, it really doesn’t leave you open to doing much more than that. And so, theoretically, yes, you could trade options with $100. Is it really going to give you the best opportunity to start developing the skills and the strategies required to be successful on options trading? Probably not. Our suggestion is always to save up a little bit more money before you start. It’s better to start with a nice portfolio size, at the very minimum, around a $5,000 portfolio size, so give yourself the best opportunity to be successful. Hopefully this helps out. As always, if you guys have any questions, let me know and until next time, happy trading.