There's really no use in learning about options unless you take action. I recommend you First go ahead and sign up for a trading account at OptionsHouse. Then you'll actually get to make some money from all the knowledge you get from reading this article. Before diving into the exciting and complex world of options, you might be wondering what exactly options are. They have great versatility but come with strict terms and conditions. And while there are many strategies for buying, selling, and trading options, even those with working knowledge of the market is at risk of losing serious amounts of money.
However, just know that options trading will not make you rich overnight either. The benefit here versus stock trading is that transactions will typically require less capital. And while they may see smaller returns, they will be greater percentage-wise than returns on stocks.
Leverage also means that returns can be potentially significant and the amount of money required is, on average, smaller than with stock transactions. However, options trading may not be for everyone but they are some of the most flexible choices you can make investment-wise. But while many options brokers create these with their very own options trading software, many can be suboptimal and downright inaccurate in terms of emulating genuine market conditions.
With so many choices out there, it can be difficult finding the a well rounded simulator. So without further ado, I present you with the best options trading simulators in Investopedia is a great company that can immediately get you started on options trading. The tool allows you to instantly create your own options simulator game, albeit not the most expedited process, customize your contest, and invite whomever you like to participate.
Their simulator is a great learning aid and has an intuitive user experience with a good trading feature to boot. Another well-known institution in the world of trading is OptionsXpress. Their simulator is called Virtual Trade offers great insights that allow you to learn the basics of options trading in an all-encompassing environment. With Virtual Trader, you can put your strategies to the test under real market conditions.
Wall Street Survivor separates itself from the competition by giving you the choice of utilizing your option spreads within your trade strategy. They also offer a free setup and a mobile app so you can trade on the go. The company puts a lot of emphasis on the educational aspect of options trading, granting its users access to free articles, guides, and real instructors to expand your knowledge.
In addition they provide educational tools on a variety of other topics and provide you with quizzes to put your skills to the test. One example is that one month, the top three investors who earned the most with the practice money given to them will receive prize payouts in real money. The program allows you to trade in real-time with your virtual portfolio, discuss strategies with other users within your game, and provide the option to customize and create either public or private games.
The OIC is a group whose sole purpose is dedicating itself to bettering the education of individuals, including investors, advisors, and managers. In addition to their core program, they provide many learning tools such as a multi-part overview of how options work, detailing the benefits and risks of trading, and courses on options pricing. Additionally, their comprehensive website offers seminars, on-demand videos, and even events you can attend.
Their trading simulator differs in that users do not use virtual currency but rather the OIC uses a Position Simulator that explains what affects the price of options and uses a mathematical formula with specific inputs to calculate the new price.
Because of this, the OIC does not provide a traditional simulator but offers a sophisticated online calculator that can price American stock options given the specified data.
A great, proactive learning environment and extremely user-friendly. Similar to the Options Industry Council, How The Market Works is another educational company that teaches aspiring investors about their namesake. The program allows users to access Forex portfolios, penny stocks, and mutual funds in both the US and Canadian markets.
OptionsHouse is a broker that offers the unique feature of using their platform before starting a paper trading account with them. Their intuitive platform and functionality provide investors of all levels the tools they need to succeed. Their virtual trading feature is a great way for amateur investors to woodshed their skills and compete with the pros.
Back in , OptionsHouse also expanded their chart trading feature which conveniently allows you to adjust trades onto the actual chart. Furthermore, analytical reports are a great way to track your own progress as you make your way through the learning process.
Along with numbers, things such as line and bar graphs and charts, along with growth and loss indicators, are crucial as they should reflect actual reports and explanations explaining why certain options prices rose or fell. While analytics is a key factor in your decision-making process, you must also consider their software and its features.
Additionally, each trading simulator offers different features so always be prepared to consider what truly motivates you when you finally make your choice. The gaming aspect of options trading is a great way of gauging how you fair with the rest of the competition while earning real prizes and money along the way. If furthering your own financial knowledge seems more appealing to you, then be sure to direct your attention to the educational materials a broker offers in addition to their simulators.
Theory is just as important as practice and if you feel you need to expand your knowledge some more before getting your feet wet then be sure to find a broker that offers extensive articles, guides, and even videos that teach you about the subject matter.
For even further assistance, look for a platform that not only gives you tutorials but will interact with you in real-time. Many of these will not only give you the literature to learn more about options trading but they will also offer suggestions for trading based on current market conditions and trends. With all this information under your belt, you are now more fully-equipped to choose a simulator that suits your needs and style of investment.
These simulators are a safe place to make mistakes as well, so the decisions you make in these versus real world conditions may vary. Just make decisions as if you were actually spending money.
With that said, I wish you luck on your newest venture in options trading. Your email address will not be published. Tom is a former accountant turned entrepreneur. He is not a financial adviser but does tend to give a lot of financial advice to his friends and colleagues. He currently runs a small online venture and blogs about his research and experiences. Leave a Reply Cancel reply Your email address will not be published. About Author Tom Smallwood Tom is a former accountant turned entrepreneur.More...