My Checklist To Start Trading Options Full Time
Have you ever asked yourself “Why do I trade?”. The obvious answer is to make more money, but have you ever asked why we need to make the amount of money we think we need to make?
For me personally, at the current stage of my life, the main reason is to support my family. I need to produce a certain amount of money so I can put food on the table and keep my family happy.
I don’t think they really care what I do for a living. In fact, I have already changed my career dramatically once and it made me realize that nobody really cares about what I do more than myself. My identity doesn’t need to be what my job is. A job should be something that I enjoy doing to make money, that’s it.
Being a trader in my opinion is one of the most efficient ways to make money.
- Work from anywhere, including from the comfort of your home – don’t need to waste time commuting
- It’s easily scalable – just need to click and add a few more zeros to the orders
- Work alone – no need to deal with annoying customers or chatty colleagues
It also matches my personality. I enjoy analyzing trades, learning and reading up on companies and new technologies, coming up with trade ideas and experimenting with them, etc.
Having said that, I still feel what I do should be useful to our society to some extend so let’s address that first.
Are Stocks/Options Traders Useful?
Even though my wife and kids don’t seem to care much about what my job is, my parents did want me to become a doctor, but I was not interested in it. I am so glad that I did not become one because I don’t think seeing sick people day in and day out would make me happy in anyways. I know being a doctor is a noble job. Help people feeling better is one of the best ways to contribute to our society, which leads me to think is being an options trader contributing to our society at all?
I looked into this pretty hard and the best answer that I could come up with is as a trader, we are contributing to the market liquidity and helping it to run more smoothly. Yes, we are just a tiny fish in the pond and the capital we contribute is minuscule, but so is what we do in our normal full-time job. It’s the fact that we are contributing that counts, the effects of contributions is a whole other conversation.
Disregard to what I do that might directly influence this world, supporting my family and teaching /guiding my kids to become better people by itself is “useful”. If becoming a full-time options trader would allow me to spend less time working, and spending more time with my kids, what is wrong with that?
Financial Checklist
Now that I convinced myself of why it’s ok to become an options trader full-time, let’s talk about the financial items. Below is a list of checklist I should fulfill in order for me to feel comfortable quitting my full-time job.
- 12 months continuous positive PNL
First and foremost, I need to prove to myself that I can perform consistently.
- Positive PNL should be large enough for a constant withdrawal
I understand that unlike a salaried job, my income will experience a wild ride. In order to minimize the volatility and provide some stability, my trade PNL needs to be large enough for me to withdraw “monthly paychecks” to at least cover basic monthly expenses.
- 3 months continuous paycheck replacement by trading profit
This overlaps somewhat with the above two points. Consistency and large enough PNL for a paycheck. If I could do it for 3 months continuously, there is a potential I could do it longer.
- 6 months saving in the bank
This is an additional layer of safety. I have calculated the basic monthly expenses so 6 months’ worth of cash to cover the basic living costs would allow me to concentrate on trading.
What’s Next?
Life is too short. Why do I need to live in a way that doesn’t make me feel happy? Why should I try to please people who don’t care about my happiness but just wants me for their agenda?
It’s time to do something that I really want. So far, I have only managed to tick off one item on the financial checklist. My aim is to check the remaining items within the next 6 to 8 months.
Do you trade full time or planning to do so in the near future? If you were me, what would you do?
My primary option trading strategies incorporate volatility and I am constantly experimenting with various trading strategies to improve my PNL.
I hold two Master’s degrees (MSc and MBA) with career experience as a cancer research scientist and a digital marketer.
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