3 Rules to Follow If You are an Options Trader with Small Capital You need a lot of money to successfully trade options, right? Wrong. You can find great success trading options with a small account and small capital if you implement the right strategies. David Jaffee has been successfully trading options for 10 years and has taught more than 1,500 students. However, he also teaches his students how to make the most of their capital and start trading with a smaller account. If you are searching for options trading advice, here are three rules to follow for options traders with small capital. 1. Use Spreads
David Jaffee is one of the best options traders to follow because he offers simple and effective strategies and tools for his students. David Jaffee recommends using vertical credit spreads to gain greater capital efficiency while also protecting against black swan events. The capital efficiency and tail-risk protection from trading and selling spreads outweighs the increased premium and ease of rolling / managing naked option positions. Even though there is a small decrease in premium that you receive when trading spreads, it’s a far more efficient usage of your capital. 2. Concentrate your buying power into the best trade opportunities
If you follow options trading tips and tricks, you will hear a lot about diversifying. While some options traders will encourage you to diversify, David Jaffee recommends concentrating your buying power into the best opportunities. In fact, he often says that the more experience he gets, the more concentrated and simple his watch list and portfolio become. By making smart, focused trades, you can allocate capital only to the absolute best opportunities and make money with a small trading account. 3. Trade the largest companies
Simply put, the largest companies are the most liquid.David Jaffee recommends that his students create a watchlist of stocks and focus only on those companies.Instead of getting bogged down with too many option trade ideas or options trading tips, traders can direct their focus and capital on trades with the highest probability of profit. Want to learn more about options trading with small capital? Visit BestStockStrategy.com today and receive over $400 of valuable free training.