One could stand to make a sizable living trading options. However, depending on one’s knowledge of the stock markets, trading for a living can be extremely risky. Options investors need to be well aware of their personal tolerance to risk, the amount of capital that they are willing to invest, and the strategies they plan on implementing. Options are the right, but not the obligation, to buy, for a call option, or sell, for a put option, a specific amount of a given stock, commodity, currency, index, or debt, at a specified price, the strike price, during a specified period of time. In the case of stock options, the total amount of shares within one contract is usually 100 shares. Each option has a buyer, called the holder, and a seller, known as the writer. If the option contract is exercised, the writer is responsible for executing the terms of the contract by conveying the shares to the suitable investors. The most important aspect of trading for a living is exactly how much one has to invest. Many have suggested that the optimal amount to start with is $100,000. Others proclaim that $10,000 is enough. A happy median of the two should be in the neighborhood between $25,000 and $50,000. If an investor has additional income, then the median start up capital could be reduced. Once the basics are covered, the next step is to generate a plan. It is paramount that traders follow a strategy and stick by it. Choosing a play requires that the investor do their homework in order to determine which direction the stock will be trading in the near future. Remember, the cost of trading options, including both commissions and the bid/ask spread, is higher on a percentage basis than trading the underlying stock. Options are derivatives, which gain their value from the underlying financial instrument. These could be stocks, commodities, bonds, indexes, etc. With a strategy in place, investors need to pay close attention to the movements of the options. Even a small directional move can prove to garner huge profits for the options contract. If the investor correctly predicts the movement of the underlying stock, then the options value will increase with every additional move from the stock. If one predicts the wrong direction, then the options value will decrease for every move, in the opposite direction, that the stock moves. To be successful at trading for a living, one must remember that there are no guarantees and no absolutes. When one thinks that the worst has happened, there is always something else that could happen. Trading options and playing the markets is a highly speculative profession. While options give the investor the opportunity to make outstanding profits, keep in mind, there is no such thing as a free lunch