Monday, September 23, 2019

Trading options in a cash account

I trade long options in a cash account.
  1. Since I don't have a margin account, I can do multiple trades each day/week without worrying about the pattern daytrader rule. 
  2. Options give good leverage for big gains, so I can still make serious progress in a small account.
  3. Cash trading puts a hard ceiling on how much I can trade each day. Once I'm out of cash, I'm done for the day.
  4. Options settle in 1 day. The next morning, I'm back in business with a fresh head.
Even when my account is >$25K I still plan to keep it a cash account. I will probably even keep my trading account small-ish, removing my gains into a separate account. I am comforted by this enforced discipline especially because I trade so "dangerously". It puts boundaries on me each day. It doesn't allow me to stab myself to death.


Popular Posts

  • hit and run
    Market is extended down. Not my best climate bc usually my setups are pretty played out and I'm not good at reversals. Plus, Friday and ...
  • Clockwork and a little luck for +19%
     After a multi- multi -week losing streak, it's nice to have another sizable winning day (albeit on small account). A+ lesson is to pres...
  • Trading the Corona era
    I've been treading water. This market has been frustrating for me. I have tried various techniques for trading all this volatility and...
  • Why so harsh?
     Sometimes I get feedback that this trading journal is very harsh. I guess it is.  Especially when I get out of the habit of journalling eve...