What will I learn about: the fundamental difference between stocks and options, discovering how a single options contract controls 100 shares for a fraction of the traditional cost?

Understand the fundamental difference between stocks and options, discovering how a single options contract controls 100 shares for a fraction of the traditional cost.

What will I learn about: profit from unpredictable market shifts by using call options for rising prices and put options to make money even when a stock is losing value?

Learn how to profit from unpredictable market shifts by using call options for rising prices and put options to make money even when a stock is losing value.

What will I learn about: Protect your savings by mastering risk management and avoiding common novice traps, such as confusing the number of individual shares with the number of option contracts?

Protect your savings by mastering risk management and avoiding common novice traps, such as confusing the number of individual shares with the number of option contracts.

What will I learn about: why timing is critical in options trading, since all contracts expire and their premiums rapidly lose value as the expiration date approaches?

Discover why timing is critical in options trading, since all contracts expire and their premiums rapidly lose value as the expiration date approaches.

What will I learn about: the Test Trading Strategy to successfully identify the most profitable stocks and confidently navigate the risks and complications of the market?

Master the Test Trading Strategy to successfully identify the most profitable stocks and confidently navigate the risks and complications of the market.

Make Money Trading Options

Short-Term Strategies for Beginners

Michael Sincere

★ 3.8 / 5(299 ratings)

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Money & Investments

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💡What if you could master the high-stakes world of options trading without risking a single penny of your own capital first?
💡Have you ever wondered how professional traders can generate profit even when the stock market is moving downward?
💡What’s the secret to identifying the most profitable stocks each day while avoiding the common traps that drain most beginners' accounts?

Listen to Make Money Trading Options — Free Audiobook

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Key Takeaways from Make Money Trading Options

✓Understand the fundamental difference between stocks and options, discovering how a single options contract controls 100 shares for a fraction of the traditional cost.
✓Learn how to profit from unpredictable market shifts by using call options for rising prices and put options to make money even when a stock is losing value.
✓Protect your savings by mastering risk management and avoiding common novice traps, such as confusing the number of individual shares with the number of option contracts.
✓Discover why timing is critical in options trading, since all contracts expire and their premiums rapidly lose value as the expiration date approaches.
✓Master the Test Trading Strategy to successfully identify the most profitable stocks and confidently navigate the risks and complications of the market.

Learning Tools

Reinforce what you learned from Make Money Trading Options

Mind Map

Make Money Trading Options

Options Basics+

The Expiration Factor+

Test Trading Strategy+

Execution & Rules+

Risk Management & Psychology+

Quiz — Test Your Understanding

Question 1 of 9

How many shares does a single standard stock option contract control?

A. 10 shares
B. 50 shares
C. 100 shares
D. 5,000 shares

Question 2 of 9

What is the primary function of a put option?

A. It allows you to buy shares at a lower price before a major product announcement.
B. It gives you the right to sell stocks at a certain price, allowing you to profit when the market price decreases.
C. It secures the right to hold a stock indefinitely without an expiration date.
D. It automatically triggers the sale of an option if it reaches a specific loss limit.

Question 3 of 9

What is a vital difference between owning stocks and owning options that influences profitability over time?

A. Options guarantee a fixed dividend, whereas stocks do not.
B. Options require you to buy the underlying stock eventually, while stocks can be sold anytime.
C. All options have an expiration date, after which they become worthless.
D. Options can only be purchased during the first hour of the trading day.

Question 4 of 9

What is the primary purpose of the 'Test Trading Strategy'?

A. To use virtual money to practice trades and test theories without risking real money.
B. To buy a small amount of real stock to test the market's volatility before buying options.
C. To test the bid-ask spread of a stock by placing rapid market orders.
D. To evaluate a broker's trading platform performance during peak hours.

Question 5 of 9

Which of the following is a recommended criterion for adding individual stocks to your Watch List?

A. They should be low-priced penny stocks to maximize potential percentage gains.
B. They should be American Depositary Receipts (ADRs) for international exposure.
C. They should be priced at least $50 per share and be actively traded.
D. They should be highly volatile stocks that jump significantly in the pre-market.

Question 6 of 9

How does the 'five-call probe' strategy work in the test trading account?

A. You call five different brokers to compare their bid-ask spreads before the market opens.
B. You buy five in-the-money calls of a winning stock, and if successful, follow up with five at-the-money calls.
C. You hold a call option for exactly five minutes to test its price momentum.
D. You purchase five put options to hedge against your real-world stock portfolio.

Question 7 of 9

When applying the Five-Minute Rule to a real brokerage account, what type of order does the author recommend placing?

A. A market order, to ensure you get the stock immediately.
B. A stop-loss order, to buy the stock only if it starts dropping.
C. A limit order, allowing you to name your price between the bid and ask prices.
D. A time-stop order, to automatically purchase the option at exactly 9:30 a.m.

Question 8 of 9

How does a 'time stop' differ from a 'stop-loss' in risk management?

A. A time stop limits the hours you can trade, while a stop-loss limits the number of trades you can make.
B. A time stop triggers a sale at a specific time, while a stop-loss triggers a sale once the option reaches a specific price limit.
C. A time stop prevents options from expiring, while a stop-loss prevents the underlying stock from crashing.
D. A time stop evaluates trades at the end of the day, while a stop-loss evaluates them mid-morning.

Question 9 of 9

What is 'revenge trading' as described in the book's actionable advice?

A. Short-selling a stock to punish a company you dislike.
B. Buying call options on a competitor's stock after your initial stock choice drops in value.
C. Emotionally fixating on making back lost profits by repeatedly trading the same underlying stock.
D. Reporting a broker to regulatory authorities after suffering a major financial loss.

Make Money Trading Options — Full Chapter Overview

1Recommendation
21 — Trading stock options can be highly lucrative.
32 — Understanding how options work is essential for minimizing risk.
43 — Unlike stocks, every option has an expiration date.
54 — Find the most profitable stocks using the Test Trading Strategy.
65 — Add individual stocks to your Watch List, then begin test trading.
76 — Choose the winning stocks once the stock market opens.
87 — Apply the Five-Minute Rule to manage risk when trading real options.
98 — Keep managing risk after trading an option.
109 — Final summary

Make Money Trading Options Summary & Overview

Make Money Trading Options: Short-Term Strategies for Beginners (2021) guides readers through the common pitfalls of trading stock options and arms beginner day traders with some easy-to-use tools to start trading call and put options on the stock market today. At its heart is the Test Trading Strategy, which uses virtual trading tools to single out profitable stocks each day.

Who Should Listen to Make Money Trading Options?

Aspiring stock traders looking to increase their wealth
Investment newcomers curious about options
Economics enthusiasts

About the Author: Michael Sincere

Michael Sincere is a best-selling author and columnist for MarketWatch and the Wall Street Journal. Sincere has written several books on investing, in particular this book’s precursor, Understanding Options (2014), which is now in its second edition. He has also contributed hundreds of articles for other brokerage firms.

Make Money Trading Options

If You're Curious About These Questions...

Listen to Make Money Trading Options — Free Audiobook

Key Takeaways from Make Money Trading Options

Learning Tools

Mind Map

Quiz — Test Your Understanding

Make Money Trading Options — Full Chapter Overview

Make Money Trading Options Summary & Overview

Who Should Listen to Make Money Trading Options?

About the Author: Michael Sincere

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