I'm messing with paper money in Thinkorswim software, watching youtube vids, trying to learn stock market processes. I bought 1 contract of 100 shares that expires on Feb 21 and it's up 1800.00 bucks as of today. I literally don't know what to do with it. I have watched so many vids about the time I think I understand something I realize I don't .... so confusing.
Do I have to let it expire and buy the contracted underlying stocks? Whereas you would have to have to have all the money for the purchase or do you just sell the 'right' to buy the contract?
I have looked for classes to start learning and there is just nothing around me available in our rural area.
Any recommendations? .... other than don't or buy low sell high.
First and foremost, understand that paper trading is in no way indicative of actual market play. I can’t tell you how many self directed clients I have seen over the years get decimated because they never took into account the psychology of trading...which paper trading/simulation platforms completely mask. Timing the market isn’t that difficult...self awareness and self discipline is what separates those who succeed from those who get consumed. I’m my experience, most people don’t understand how they will react under those circumstances, and make decisions from emotion as opposed to logic.
Also understand, the system is designed to profit from you, not for you...The movie “The wolf of Wall Street” is seen as more of a documentary, than entertainment to those who work in the industry. The Hanna speech to Belfort early in the movie is an accurate portrayal of the entire industry.
As others have mentioned, be very wary of selling naked premium, particularly in markets of lower liquidity.
If your going to dabble in options, I would recommend reading Sheldon Natenburgs “Options volatility and pricing strategies” ....this will give you a thorough understanding of all the various strategies as well as the Greeks used in the pricing models.
I always asked potential investors how successful they were at blackjack (assuming a fair game with favorable rules) ... if they couldn’t consistently win over the long term... then they weren’t ready to trade, as both require the same three elements for success: analysis, money management, and self discipline.
I’m not saying it can’t be done, just be fully aware of what your up against... not the least of which is yourself.