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

  • the ugly
    Thursday is usually my favorite trading day. But today was tough. I wonder if I should be more wary of Thursday before monthly options expir...
  • Trade with a spoon, not a shovel
    Since ath April 7, I've had a string of losses. I reverted to old bad habits to try to dig out of the hole, of course making it worse.  ...
  • Finally! the milestone
    Finally! I crossed the milestone account number. Maybe now I can stop trading like an ass. Premkt notes: Literal flat open. Wait for entries...
  • New account high.
    I am so grateful to have a new account high today. I was somewhat discouraged after Monday and Tuesday, both red.  I shifted mentality and t...