What is an expected gain?

Hello traders!

For those with small accounts...10k or smaller, the game is to slowly grow your account, preserve capital, manage risk, do not have FOMO, and finish each day in the green as much as possible. So, we all have gone thru the training, whether it be online classes or YouTube videos. While they all teach you technical analysis, most don't give you the reality of this game of trading we all love/ hate.

So, what is an acceptable gain? There are a few standards; first you have the Buffet school of investment, put your money in a no load S&P 500 Fund and grow your money at 10% a year for 40 years and become wealthy or maybe pick the 5 to 10 most undervalued companies you can find and buy and hold till you realize the upside of these investments, maybe... just do both? What if you don't have the time? What if you are 10 years away from retirement or don't have much cash to invest. Options can be your savior. However, with a 10k or smaller account, you can only make so much on your money. So, how much can you make? What gains can you reasonably expect trading options?

The average percentage gain that options traders can achieve in a month or a year can vary widely based on several factors, including the trader's skill level, risk tolerance, market conditions, and the strategies employed. Here are some general insights:

1. **Professional Traders**: Professional options traders, such as those working for hedge funds or proprietary trading firms, often aim for annual returns in the range of 20% to 50%. Monthly returns can vary significantly, but a target of 2% to 4% per month is common.

2. **Retail Traders**: Retail traders, who trade options on their own, may have more varied results. Some experienced retail traders can achieve annual returns of 20% to 30%, while others may struggle to break even. Monthly returns for retail traders can range from 1% to 5%, but this is highly dependent on individual skill and market conditions.

3. **High-Risk Strategies**: Traders employing high-risk strategies, such as naked options or aggressive directional bets, may achieve higher returns in the short term but also face the risk of significant losses. These traders might see monthly returns of 5% to 10% or more, but the risk of large drawdowns is also higher.

4. **Conservative Strategies**: Traders using more conservative strategies, such as covered calls or iron condors, may aim for lower but more consistent returns. Monthly returns for these strategies might be in the range of 1% to 3%.

5. **Market Conditions**: Market volatility and trends play a significant role in options trading returns. Bullish markets may provide more opportunities for gains, while bearish or sideways markets may require more defensive strategies.

It's important to note that options trading involves significant risk, and past performance is not indicative of future results. Traders should have a well-defined risk management plan and be prepared for the possibility of losses.

So as an amature trader with moderate risk and skill, 2 to 5% a month would be just great! So, 2% to 5% a month, if you were to put all 10 k into trades all the time, 200.00 to 500.00/ month is what you can reasonably expect.

So if you have a small account... Don't quit your day job... Grow slowly, use compounding gains to grow faster and by all means... Manage your positions!

Good luck Traders!