Do I need deep pockets?

How much is the minimum investment required for buying options?

The business of buying Currency Futures options for speculation is suitable for one

(a) who can invest US$10,000 in a broker's account and

(b) knows how to trade spot currency or equity options trading.

The probability of earning $10,000 of income in a year is very much there. If a trader is not in the need of regular immediate income and can retain profits earned in the account and utilise to use furthering capital can make US$50,000 in a year.

Essentially, the trader needs to acquire skills to predict the direction of the market, the intensity of price volatility, the time it is expected to achieve target profit and have a realistic quick exit plan. Prolonging the trades in the hope of making an unrealistic profit will result in a loss.

Potential Loss (Stop Loss level), a break-even point and the Probable Profit (Take Profit target) - all should be known in advance.

Options would be bought outright, so no margin account is required. Margin call will not happen. By attaching pending Stop Loss and Take Profit orders while placing the order itself, the investor knows in advance what will be the maximum loss and profit.

When investing, the trader has to determine whether he can afford to lose US$750 (an example, the value of stop loss) in case the trade goes in an adverse direction.

Since managing psychology is not involved, you are free to invest your time in understanding when to buy options which can deliver at least 50% of profit in 15 days. It will take a couple of years to get to a point where your predictions start working. There is no shortcut. But if you don't try it now, it will not happen.

Just focus on the techniques to predict Breakout and Breakdown by using seasonal pattern recognition and fundamental analysis methods. Identifying breakouts is challenging. There are different ways to find them. Some use fundamental factors while some study momentum patterns. If you are keen on making money, you have to devote time to mastering the price breakout and breakdown techniques.

Breakout/breakdown opportunities will be limited to 10% -15% of the trading time. It would need some patience. But it is worth trying this particular strategy as trade management does not require any on-going management .

As against this, 80-85% of the time, the market will not be trending. The market will be flat or stalled and consolidation will be happening. Selling options will be the technique to profit from consolidation. It needs constant monitoring and somewhat deep pockets.

Who can be a trader of bought options?

Fx trader has to know how to execute a trade on a broker's platform offering CME futures options. Interactive Brokers provides a user-friendly Mobile Phone/Pad platform.

An equity or commodity future options trader, who knows how generic options work, and can execute option trades on a platform, also needs to be familiar with how spot currency market works.

A week is enough for a self-starter. Maximum a month to become an intermediate trader of bought currency options.

Acquiring further skills to make profitable trades by buying and selling options and using combination of these (known as spreads) will be a life-long learning exercise.

If you can find a mentor who holds your hand during the transition period and helps you with specific trade ideas will be a good solution for a couple of years until you become proficient in spotting probability of profitable trades.

Beginners will have to put in three to six months to become an intermediate fx options trader

Newbies have to divide the learning process in two phases:

Firstly, they will study how a currency market works and execute paper trades on demo accounts. A lot of excellent genuinely-free resources are available on most of retail fx brokers' sites and Youtube. They do have a purpose of selling something to you but you can pick useful information without any obligation.

You will also come across non-trader coaches/educators who possess the gift of the gab or who hire highly-paid copywriters to make you poorer by up to US$50,000. So please take care and don't get trapped by them because no options course is really worth that value.

All the information that can help you to make exponential returns is already provided here on this web-site. It's a matter of you practising it regularly with dedication and discipline and be prepared to devote a couple of years to achieve proficiency.

The second step would be to understand how currency futures and options work and the trades are executed on broker's platform. CME site provides excellent free learning material as well.

A beginner should expect to spend six months to become a full-fledged intermediate Fx options trader.