Options Paper Trading Journey: From Novice to Expert
Chapter One: Entering the Options Market
Wang Lei is a financial Analyst who has been in the job for two years. He has always been curious about Options Trading, but fearful of the risks. One day, he saw a post about "Options Paper Trading" on an investment forum, which mentioned the opportunity to learn Options Trading without financial risk. So, he downloaded a Papertrade Software and decided to start his Options investment journey.
Since this is a paper trade, and winning or losing doesn't affect reality, let's take a bold try! Wang Lei muttered to himself.
After studying the basic options concept, he chose a familiar company—Tesla (TSLA), and decided to try a **Call Options** trade. He noticed that Tesla's stock price had been rising recently, so he bought a Call Option contract with a strike price of $200 for a premium of $5, which expires in a month.
Chapter Two: The Baptism of Market Volatility
At first, Tesla's stock price rose as expected, and the price of his Options increased from $5 to $8, which means his investment had a 60% floating profit. Wang Lei excitedly thought: "If it were live trading, I would have made $300!"
However, the market is never smooth sailing. A week later, due to Tesla's new model sales being below expectations, the stock price suddenly dropped to $180. The price of his Options also quickly fell to $2.
"It's over! If this were live trading, I would have lost 60%!" Wang Lei opened...