This is our training roadmap for helping stock investors learn how to use options to protect profit, manage risk and generate consistent income from their stock portfolios in all market conditions.
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Training roadmap
1. Training Roadmap
We believe in the 10:20:70 rule in learning new practical skills
such as trading options.
• Only 10% of learning is from Education e.g. attending
training workshops, reading books or doing online
courses
• Another 20% of learning comes from Exposure e.g.
watching training videos or a live mentor doing it OR
from doing simulations e.g. paper trading
• The real learning, 70% or more, comes from Experience
i.e. doing it yourself. Ideally, you would like to have an
experienced mentor hold your hand when you are a
beginner, to give you confidence and to help you if
something unexpected happens.
Our focus is on helping learners gain Exposure and Experience after they have received the basic
education. There are many cheap or free education resources available on options today and we
help our students get access to these. We then provide them with “how to” training videos on the
practical options trading skills as well as an experienced mentor to help students place and manage
their initial trades with confidence. We believe mentoring is essential when learning to trade
complex and powerful instruments such as options, especially when Australian brokers do not
provide “paper trading” facilities. A simple mistake can easily cost you more than what you pay for
mentoring!
Education
1. Read the ASX Understanding Options Trading booklet (mandatory)
2. Complete the ASX Online Options Course (recommended)
3. Read the book “Options Trading for the Conservative Investor” by Michael C. Thomsett
(optional)
Exposure
Step 1: Learn how to maximise your learning through our step-by-step training videos. Watch
• GA1: How to Use Our Training Videos Effectively
Step 2: Learn the general concepts for selecting stocks and options for implementing these
strategies successfully. Watch
• GA2: How to Select Stocks for Selling Options – The Basics
• GA3: How to Select Options – General Considerations
Step 3: Learn how to open an online trading account for trading options. Our preferred broker is
E*TRADE because they currently have the best options trading platform for trading Australian
2. options. As it takes a few weeks to get an options trading account opened, we suggest you do this as
soon as you finish watching these videos. Watch
• ET1: How to Open a New Online Trading Account on E*TRADE (skip this if you already have a
share trading account with E*TRADE)
• ET2: How to Activate Your Account for Trading Options
• ET3: How to Upgrade Your Options Trading Level (skip this if you have already been given
Options Trading Level of 4)
Step 4: Learn in more detail how to implement each of our option strategies. Watch
• GA4: How to Protect Stocks That Have Options
• GA5: How to Protect Stocks That Do Not Have Options
• GA6: How to Sell Covered Calls
• GA7: How to Sell Cash Secured Puts
Step 5: Learn how to place and manage options trades on the E*TRADE platform. Watch
• ET4: How to Buy Shares (skip this if you already trade shares on E*TRADE)
• ET5: How to Place Options Trades
• ET6: How to Manage Open Options Positions
Step 6: Learn how to put everything together. Watch
• GA8: Some Real Life Examples on Using Our Strategies
• GA9: Risk and Money Management
• GA10: How to Document Option Trades for Tax
Optional videos on Vector Vest Trading Tools
• VV1: How to Select Stocks for Selling Options Using Vector Vest
• VV2: How to Use Vector Vest for Determining When to Hedge
Experience
1. Plan out your own trades and start trading! If you have not opened your E*TRADE account,
do so immediately as it takes a few weeks for the paperwork to be processed.
2. If you have signed up for mentoring, ask your mentor to go through your planned trades
before you do them.
3. Do not hesitate to contact your mentor if you run into problems.