This is actually the shortest of the strategies in this book. Why? It is because being a successful options trader requires very little overhead. In other words, there are only a few mandatory tools you need to profit big through options trading. Here’s the story. Thanks to the Internet, now more than ever before, the options trading floor is accessible by commoners. What was once the playing field for only the most elite of investors can now be approached by individual traders like you and me. Actually, that freedom has its pluses and minuses. The plus is that anyone, no matter what their race, creed, nationality, sex, level of education or location, can trade options in real time as if they were standing right on the trading floor. What is the minus? Masses of people with very little experience and discipline are trading based solely on rumors, guesses, intuition, gut feels, and who knows what else. That is disrupting the balance on the trading floor more and more, causing highly reactionary price fluctuations and volatility. Now, let’s get back on track here and talk about the tools you need to be a successful options trader. First, you’ll need to have access to the Investor’s Business Daily newspaper. The Investor’s Business Daily newspaper is a wonderful source of fundamentals data. Plus, the articles and commentary aren’t half bad. A subscription would be great. They even have an electronic version that gets delivered right to your computer. You can view the Investor’s Business Daily at your local library if you want to bypass the subscription, at this point. Being a successful options trader requires very little overhead Next, you’ll need a computer that is hooked up to the Internet. Again, the higher quality computer you can get, especially with respect to displays and video cards, the better off you’ll be. You’ll be using your computer to look at stock charts. The more detail you can see, the better. Also, the faster the Internet connection you can get, the better off you’ll be. Successful options trading can be pulled off with a simple dial-up modem connection to the Internet, but the convenience offered by a broadband connection like DSL, cable modem or better — especially when downloading charts — is priceless. Rarely, but every once in a while, being able to place your trade down to the second, will mean just enough extra profit that the cost of a broadband connection is justified. So, you have your daily news feed in the Investor’s Business Daily, and your computer is linked to the Internet. Now, you need a brokerage account that is accessible online. There are plenty to choose from. Examples are Fidelity, Schwab, eTrade, Ameritrade, and ShareBuilder, just to name a few. I generally tend towards the higher-end names like Fidelity and Schwab simply because of their customer service and the research tools they offer their clients. When you are searching for the right brokerage firm for you, some things you’ll want to consider are:

What is the cost to open an account?

What is the minimum balance I must keep for my account to remain active?

What is the commission fee to trade options? High-speed Internet is a very valuable tool to have in trading

How user friendly is their online trading system?